Insight & Commentaries
Ask most investors what “risk” means and they’ll point to volatility — specifically, standard deviation, the familiar statistical measure of how much a portfolio’s returns fluctuate around their average. For decades, standard deviation has been the default language of investment risk. It appears in fund fact sheets, academic papers, and advisor presentations. It is the backbone of modern portfolio theory. And it is, in important ways, an incomplete picture. Standard deviation treats upside and downside fluctuations as equally “risky.” A month in which your portfolio gains 8% is counted the same as a month in which it loses 8% in the…
Global markets are adjusting to a changing environment shaped by geopolitical conflict, higher energy costs, and tightening credit conditions. Credit spreads widened during the first quarter as well. Both factors helped contribute to some downward pressure on our WCA Barometer and a modest reduction in equity exposure in tactical portfolios. These developments are occurring against a broader backdrop of transition away from the zero-interest-rate world toward a higher cost-of-capital environment. Our tactical positioning is updated as market leadership shifts, risks change, and as tactical discipline becomes more important. We continue to emphasize diversification, flexibility, and disciplined portfolio positioning as conditions…
The investment industry often frames success as beating the S&P 500 or one of its style indices such as Value or Growth. However, most financial advisors and their clients are not trying to beat an index; they are trying to grow their wealth, generate income, and avoid large losses. Those are very different objectives, and they require a different way of thinking about benchmarks and portfolio construction. It has been our experience that most advisors and investors we work with ask for a seemingly simple thing which is to “make money and try not to lose it.” Somehow, this simple…
It is now all about earnings. Surging capital spending has been the main driver of profit expectations and the stock market. Despite all the worry about oil, Iran, stagflation, and AI Disruption, the forward view of earnings is still strong and the S&P 500 trades at a higher than average multiple of expected earnings. Since earnings growth has driven about two-thirds of the gain in the S&P 500 post 2019 and almost all of the gain since the end of 2024, what happens over the upcoming earnings season should be of utmost importance (see Chart A). Expectations are high as…
The past year was marked by sharp swings in market confidence. After a brief period of heightened volatility and tariff-related anxiety, optimism returned quickly, driven by enthusiasm around artificial intelligence, expectations for policy support, and easing financial conditions. Equity markets ultimately reached new highs, reinforcing the role confidence and liquidity now play in shaping market outcomes. These developments have occurred against a backdrop of extraordinary aggregate wealth. Over the past decade, U.S. household net worth has nearly doubled, supporting consumption, investment, and risk-taking. In many respects, last year’s optimism was justified by subsequent economic and market performance. At the same…
If you own a diversified, quality-oriented portfolio, the last year has likely been frustrating. Conservative strategies—including many dividend-focused portfolios—have lagged the S&P 500, even as markets have risen sharply. That gap naturally raises questions. Why has your carefully constructed strategy trailed the S&P 500? And should you reconsider your approach? Before answering, consider what happened the last time investors faced this choice. In March 2000, a newly retired couple sat down with $1 million, a 4% withdrawal plan, and a portfolio full of the market’s biggest winners. Over the previous decade, technology stocks had made them millionaires. The future had…
As risk appetite stretches and quality is overlooked, this short video revisits the original purpose of the Rising Dividend strategy: dependable income, durability, and long-term risk-adjusted returns. When markets reward the hare, it’s worth remembering why the tortoise wins—and why quality and rising dividends still matter.
We sought to look back at twenty years data for the S&P 500 to study the source of return by company risk category. As the graph and tables that follow show, the results were eye opening.
When most of us think about growth, the focus is usually on how quickly a company might expand in the future and, sometimes, on recent growth. But the more important question for your portfolio may actually be not how much growth a company might deliver — it is how confident we can be in that growth. We will argue here that during risk-loving bull markets (like today), focus tends to shift to the “how much” question, and during more normal, risk-aware markets, reverts to the “how confident” question. To prove our point, we will offer three charts. The first chart…
Quarterly Report
Principles
Dividend Investing
