Rare Air

For the past eight days the DJIA has set new all-time highs. But what does that mean to investors? There is a big difference from the 2007 highs to what we are seeing today. In 2007 the price to earnings was at 30, today it is just below 15. Price to earnings is the valuation ration of the S&P’s current share price compared to its per-share earnings. Interest rates, such as the 10 year, were just below 5% compared with 2% today.

I am always asked is it time to get back in the market and my standard answer is, “If you have money it’s always time to get in the market prudently”.  Your tolerance for risk and your time horizon just define how in the market you should be. This has been the most unheralded bull market that I have ever seen. Retail investors are still on the sidelines either dismissing the fact that equities are a viable place to make money or waiting for a pullback to get back in because they have missed the 100% gain since 2009.

This reminds me of the DIY investor that told me when the market goes back up then I will get back in. I called him the other day and now he is waiting for it to go back down.

In March of 2009, risk was at its lowest level. Now we must be more cautious but not having some allocation to equities has more risk than cash; if you don’t want to outlive your assets. Don’t let the doomsday prophets destroy your future, they are rarely correct in their predictions. The fact is unless you have a lot of money 1% interest is hard to make ends meet.

We have a new workshop “Conscious Investing for Peace of Mind” which delves into the minds of investors and why they are their worst enemy when it comes to investment decisions. We will be sending out invitations and also check on our website www.rileywealth.com for more information. We always welcome clients, prospects and guests for our workshops, so it’s a great way to make sure everyone you care about is investing as wisely as you are!

 

Bill

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About billriley

Chief Executive Officer, Chief Compliance Officer A co-founder and shareholder, William Riley is a 33 year industry veteran, who observed, many years ago, that over time institutional investors typically outperform individual investors while accepting less risk. In his role as Chief Executive Officer, Bill works tirelessly to make the wealth management strategies used by the world’s wealthiest families and largest institutions available to our firm’s individual clients. Bill combines fundamental and technical analysis to minimize investment portfolio risk and maximize potential returns. He uses a variety of non-correlated asset classes, including alternative investments, to minimize portfolio volatility and seek absolute returns in down or flat markets. Finally, Bill believes in a comprehensive approach to wealth management that fully coordinates and seamlessly integrates portfolio management, risk management and asset protection, trust, estate, tax and charitable planning. Prior to co-founding Riley Wealth Management ,LLC, Bill held management positions at Merrill Lynch, UBS, Raymond James, Paine Webber and J.C. Bradford. Bill founded Fort Worth branches for Raymond James and J.C. Bradford. Prior to entering the financial services industry, Bill ran his families closely held businesses. Bill’s experience operating family businesses combined with his wealth management experience makes him uniquely qualified to advise entrepreneurs and business owners on a variety of matters including complex and sensitive issues relating to business succession. Bill’s degrees and designations included a Masters Degree in Business Administration (MBA), the Chartered Financial Consultant designation (ChFC), the Chartered Life Underwriter designation (CLU) and the Wealth Management Specialist designation (WMS). A Fort Worth native, Bill is a TCU alum and active in many civic and charitable organizations. Bill and his wife, Marsha, now reside in Colleyville, and they have four grown children and four grandchildren. When he is not working on portfolios or studying financial markets, Bill can be found on the golf courses of Ridglea Country Club.
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