News & Views

Used Car Prices Hit an All-Time High, Can You Still Get a Good Deal? – MarketWatch

Over the last year we have seen many articles and heard many stories about the real estate market and how hot some areas of the country are.  We are now seeing a similar story, but dealing with a different asset, used cars.  Some of the factors leading to these higher prices are a global shortage in microchips, low inventory, and increased demand for certain inputs that go into maintaining and fixing up cars.  This article goes into a bit more detail around those reasons and also gives some good tips on what you should do if you or someone you know is currently looking for a used car and wants to get the best deal possible.

https://www.marketwatch.com/story/used-car-prices-just-hit-an-all-time-high-and-surpassed-25-000-for-the-first-time-heres-how-to-still-snag-a-good-deal-11620754705

Steps To Take If You Experience Credit Fraud or Identity Theft – Wise Bread

Unfortunately credit fraud and identity theft has been on the rise in the US and globally for a number of years.  We have seen clients deal with some bad situations by no fault of their own or anyone else (other than the bad actors perpetuating the crime).  If you or someone you know ever finds themselves in a situation where a loan was taken out in their name there are some easy steps you can immediately take to minimize the damage and get things back on the right track.  This article lays out those steps.

https://www.wisebread.com/someone-took-out-a-loan-in-your-name-now-what

Rising Rates Don’t Negate the Benefits of Bonds – Vanguard

We have heard from some clients that they do not think bonds will be beneficial to their portfolio going forward or that they do not expect bonds to perform well in the future.  Interest rates have risen, which has negatively impacted bond performance so far this year.  However, the role of bonds has not changed.  Bond are still there to provide protection in the event of a big equity downturn, this article mentions that “from January 1988 through November 2020, whenever monthly equity returns were down, monthly bond returns remained positive about 71% of the time.”  The article also dispels a few bond myths and touches on what we can expect from bonds going forward.

https://investornews.vanguard/rising-rates-dont-negate-benefits-of-bonds/

Video – Can Investors Successfully Chase Performance of the Biggest Stocks?

We often see a tendency for investors to think that the current trends or top performing companies will continue on the same path indefinitely.  The data shows that trends change, sometimes very abruptly, and the top performance companies do not stay at the top indefinitely.  This short video shows the performance of the top stocks in the 10, 5, and 3 year periods prior to joining the top 10 largest stock list and the subsequent 3, 5 and 10 year performance of the same stocks.  What we see is that in the periods directly following a company cracking the list of the top 10 largest US companies the average performance does not coincide with those prior periods.  The main takeaway from this video should be that while it is very tempting to believe that certain companies that are doing very well will continue that performance in perpetuity, that is not what we see in the data and it still makes sense not to chase performance and to instead maintain an appropriate asset allocation and stay diversified.

https://www.dimensional.com/us-en/insights/why-investors-might-think-twice-about-chasing-the-biggest-stocks-data-vid