The Rise of ESG

Zach Schlaht / Sep 12, 2018 / Investments

Increasingly, investors want to put their money where their values are.

Environmental, Social and Governance, or ESG, has slowly morphed into a catchall for what has historically been known as socially-responsible investing (SRI). While SRI focuses on mostly negative screens such as screening out companies involved in tobacco or gambling, ESG takes it a step further by applying an analytical framework to a business’s underlying fundamentals aimed at positive things companies are doing that may help their business perform better.

Examples of ESG factors span many different issues ranging from climate change, to workers compensation and social equality, among others.

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Dealing with Market Risk

Norm Boone / Aug 29, 2018 / Investments

It’s fun when the investment markets go up. Your nest egg is growing and so is your net worth.

Unfortunately, markets go in cycles. They don’t always go up. In fact, the US stock market (as represented by the Standard & Poor’s 500 Index, which approximates the 500 largest US companies) falls roughly once every four years. Sometimes that decline lasts for almost three years, as it did between 2000-2003. Or, it may be more intense, but only last for a year or two (2007-2009). Sometimes it’s just a week or two, if just to remind you that markets go down.

As an example, look at annual returns of the S&P 500 Index by year since 1980. Over those 37 years, eight have had negative full-year results, but every year has experienced a drop from peak to trough, many of which were pretty scary.

Even the good years have periods when negativity reigns supreme.

What is an investor to do? It seems to me there are three choices.

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Should You Let The Government Help Pay Your Advisory Fees?

Mosaic / Aug 23, 2018 / Retirement Planning / Investments

One of the many changes enacted by the Tax Cuts and Jobs Act of 2017 (TCJA) was the elimination of miscellaneous itemized deductions starting in 2018. This category included deductions for investment expenses which allowed you to deduct investment and custodial fees, costs-related trust administration, and other expenses, to the extent that they and other costs exceeded 2% of your adjusted gross income (AGI).

One strategy to deal with the elimination of this tax break is to deduct the investment fee for the management of your IRA directly from the IRA.

Let’s look into how this strategy plays out.

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Liquid Alternatives Outlook Panel [VIDEO]

Mosaic / May 23, 2018 / Mosaic News / Investments

Our own Principal and Chief Investment Officer Kevin Gahagan participated in a moderated panel for Asset TV on liquid alternatives. As liquid alternatives have saturated the marketplace, Kevin offered his expert point of view to illuminate what investors need to know.

It’s incumbent upon us to continue to provide that education, because the last thing we want is an investor making an uninformed decision.

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All about Asset Allocation

Norm Boone / May 17, 2018 / Investments

If your mother warned you against putting all your eggs in one basket, she grasped the basic concept of asset allocation in financial planning.

A well-balanced mix of asset types can help insulate your portfolio against severe market fluctuations that might disproportionately affect any one type of asset.

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Market Watch 2018 Q1 - Mosaic’s Quarterly Market Commentary

Kevin Gahagan / Apr 17, 2018 / Investments / Market Commentary

This is a tale of two market environments.

As clients can see in their quarterly reports, the one-year numbers show strongly positive returns with very few exceptions.

In contrast, the first quarter of 2018 was a different story. First quarter numbers were negative in a majority of investment asset classes.

It remains to be seen whether this represents the beginning cracks in the long growth run we’ve enjoyed since the end of the great recession in early 2009.

After experiencing relatively calm markets in 2017, volatility returned in the first quarter of 2018. Bond prices fell as interest rates rose, while US and international stocks declined. With tensions heating up between the US and leading communist countries (including potential trade wars with China, nuclear tension on the Korean Peninsula, and the expulsion of Russian diplomats), there is a great deal of uncertainty on the global stage, which all contributed to a weak first quarter.

The outcomes weren’t terrible, but all of this is a change from the positive growth trends we’ve enjoyed recently.

Our new issue of Market Watch is out now.

 

More insights are inside the issue, including a breakdown of current economic factors influencing the markets.

Read our quarterly market commentary today to get a better idea of our investment approach.

Click here for the full issue.

 

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Market Watch 2017 Q4 - Mosaic’s Quarterly Market Commentary

Kevin Gahagan / Jan 17, 2018 / Investments / Market Commentary

2017 marked a year of widespread data breaches, the beginning of the Trump presidency, devastating hurricanes, wildfires that raged throughout California, and a cryptocurrency frenzy reminiscent of the Dot.com bubble. However, through it all, 2017 saw a long, steady rise in the stock markets.

It was a year of record highs as we saw the NASDAQ surpass the 7,000 mark and the Dow Jones Industrial Average roar past the 25,000 mark. US large cap returns reached 21.8%, pushed by the technology sector’s rise of 35.4%. Although small cap stock returns were lower in comparison, they still returned a very positive 14.7%. As strong as US market returns were, international markets performed even better.

All of the encouraging economic trends seen in 2017 makes us optimistic about the prospects for 2018. We are currently in the second longest economic recovery in US history.

With this in mind, many argue a recession must be imminent.

But positive economic data in the US and in most countries globally gives us a less pessimistic outlook. Labor markets are strong, economies are growing around the world, and consumer and investor confidence is high.

In addition, consistently low inflation, falling unemployment, and rising standards of living around the world all offer reason for optimism about the year ahead.

 

Our new issue of Market Watch is out now.

More insights are inside the issue, including a breakdown of current economic factors influencing the markets. Read our quarterly market commentary today to get a better idea of our investment approach.

Click here for the full issue.

 

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Market Watch 2017 Q3 - Mosaic’s Quarterly Market Commentary

Kevin Gahagan / Oct 27, 2017 / Investments / Market Commentary

There was solid economic growth and rising values in markets around the globe in the third quarter. 

This trend held for all major asset classes—both equity and fixed income. In the US, both large and small company stocks generated solid returns for the quarter. This continued the trend seen so far this year and throughout 2016.

Given the more recent decline in the value of the US dollar, international equity returns have been even more robust than those in US over this period.

 

Further summary:
  • Domestic stocks performed well year-to-date. The S&P 500 Index (US large companies) and the Russell 2000 (small US stocks) rose 14.2% and 10.9% respectively.
  • Equities in the developed countries overseas enjoyed substantial gains with the MSCI EAFE Index (large companies) returning 20.5% while the EAFE Small Cap Index rose 25.8%.
  • Emerging market stocks have risen 28.1% over the last twelve months (MSCI Emerging Markets Index).
  • Domestic bond market returns faced a headwind of rising interest rates in 2017, yet still delivered modestly positive returns in most categories.
  • Economists expect moderate inflation in 2018. The Fed can be expected to continue raising interest rates while it also seeks to reduce its balance sheet. We believe they’ll do both gradually with care to limit  economic impacts.

 

More inside the issue, including a breakdown of current economic factors influencing the markets:

Click here for the full issue.

 

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Data Breach Protection: Credit Freezing, Credit Locking, and Other Tips to Monitor Your Credit

Norm Boone / Sep 19, 2017 / Investments / Financial Planning
NEXT STEPS AFTER THE EQUIFAX BREACH

The widely-reported Equifax data breach affected 143 million United States consumers. The breach exposed names, Social Security numbers, addresses, birth dates, and driver’s license numbers—all critical pieces of information used by identity thieves to impersonate people and conduct fraud.

Let’s break down what you can do to keep a close eye on your information, now and moving forward.

 

Initiate a Credit Freeze

If you have been the victim of a stolen identity, you know that the onus is on you to proactively prove that you are not responsible for the things that someone else did in your name. It is an arduous and painstaking process.

In light of the recently reported Equifax data breach, one action we recommend is to consider freezing your credit at each of the three major credit reporting companies. Taking this step will make it much more difficult for identity thieves to obtain new credit in your name. Here’s how.

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Circle Roundup: Investment Risk & the “Sleep at Night” Factor

Mary Ballin / Aug 25, 2017 / Women's Circles / Investments

Another successful Women’s Circle rounded out our financial understanding. This time, the Circle focused on tackling investment risk in a way that is optimal to reach long-term goals while still feeling comfortable with your everyday choices.

Market volatility can feel hard to experience emotionally, even potentially keeping you up worrying at night.

This can be overwhelming.

Risk is taken every time an investment is made, but what is the right level of risk for you, as an individual?

This post rounds up a few key tools, terms, and takeaways shared by Circle participants that can help bring you clarity.

 

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Market Watch: Our Take on the Second Quarter of 2017

Mosaic / Jul 27, 2017 / Investments / Market Commentary

Stocks have been doing very well, especially US markets, emerging markets, and the worlds developed economies. But what about interest rates and bond returns? And whats in store for the US economy?

Summary

Stocks enjoyed strong positive returns over the last 12 months, in both the US and overseas.

US markets, as represented by the S&P 500 Index, rose 17.9% in the last 12 months. Small US stocks were even better at 24.6% (Russell 2000).

The world’s developed economies, as represented by MSCI EAFE, rose 20.8% over the last year while small overseas companies were up 23.6%.

Emerging market stocks rose 24.2% year-to-date (MSCI Emerging Markets Index).

With interest rates rising, bond market returns over the past year have been impacted and most bond indexes were slightly negative.

Economists believe that inflation will remain benign for the immediate future, and that interest rate increases from the Fed will likely be implemented slowly, with careful consideration.

Given the variety of alternative strategies we hold, inevitably some performed better than others during this period. The category as a whole was comfortably positive. Among the leaders were timber and business development companies.

More inside the issue, including a breakdown of current economic factors influencing the markets:

Click here for the full issue.

 

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Effective Financial Strategies: The Q2 2017 Edition is out now

Mosaic / Jun 14, 2017 / Investments / Financial Planning / Mosaic News
What's Inside:
  • Learn how combining investing strategies can be beneficial to your portfolio;
  • Hear our “origin story” - how Mosaic came to be, and how we became a fiduciary
  • Find out how to express your preferences and values in your estate planning;
  • Read about tips to keep top of mind when it comes to evaluating earthquake insurance;
  • Get to know new financial planner Stephen Kepler and his why
  • Read about upcoming Women’s Circles and other events;
  • Stay up to date on Mosaic advisors: their speeches given, conferences attended, and books read, with takeaways from each.

To read the new issue of Effective Financial Strategies, please click here


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Growth vs. Value: Two Approaches to Stock Investing

Kevin Gahagan / May 4, 2017 / Investments

In the world of investing, stocks and stock mutual funds are often classified into one of two fundamental styles: value stocks or growth stocks.

Growth investors seek companies that offer the promise of strong future earnings growth, while value investors seek stocks that appear to be undervalued in the marketplace.

Because the two styles have different investment characteristics and performance, employing both approaches to stock investing can help add positive diversification to your portfolio when used together.

Let’s look at their individual characteristics, and then discuss the objectives of combining the two styles. 

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Market Watch: Quarterly Commentary from Mosaic

Mosaic / Apr 20, 2017 / Investments / Market Commentary

Every quarter, our investment management committee produces Market Watch, Mosaics take on the markets and the current economic affairs that influence them. The first edition of the year has just been published, and were excited to share our commentary with you. 

Summary
  • US markets enjoyed strong performance across the board for the twelve-month period ending March 31, 2017.
  • The S&P 500 Index posted a 17% return for the twelve months ending March 31.
    US small stocks did even better.
  • Overseas, the developed world benefitted from improving exchange rates as well as strengthening economies, which helped push stock returns over 10%.
  • With commodity prices recovering and the developed world needing more goods, outlooks brightened and emerging market stock returns averaged over 17%.
  • Bonds were largely positive, although there was little to no price appreciation, so returns were relatively low.
  • Global real estate stayed positive, but generated only mid-single digit returns.
  • Alternatives helped to boost overall returns, led in particular by oil & gas pipeline/infrastructure companies, timber, emerging market bonds and business development companies. 
 
Click here for the full issue.

 

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10 Investment Mistakes to Avoid

Mosaic / Mar 23, 2017 / Investments

There are many ways to lose money. Who needs a pyramid scheme or a crooked money manager when you can lose money in the financial markets all by yourself? 

Sometimes, the best way to refine your process is to learn how *not* to do something. Here's a look at 10 proven ways to manage your investment portfolio into the ground in no time.

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