Review & Outlook

The equity market party continued in 2Q- 2017 with the broad US equity market gaining 3.01% for the quarter and both the MSCI Developed Markets and Emerging Markets Indices gaining almost 6.4%. For the year-todate (YTD) the MSCI US Broad Market Index is ahead 11.08% through the end of July while the MSCI Emerging Markets Index is ahead 25.77%.

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Clothier Springs Capital Management Turns Seven
With the approval of our application to be a Registered Investment Advisor on June 30, 2010, we reached our seventh year as a firm at the end of 2Q-2017. We have learned a lot in seven years and we are still learning. But after almost forty years in the capital markets, we have a pretty good handle on the Timeless Truths of investing. Asset allocation does the heavy lifting. Diversification is a (nearly) free lunch. Clients earn return net of costs, so keeping costs down maximizes client outcomes. We could go on.

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4th Generation Website
Wrapping up a project that consumed much of 2Q-2017, we have posted a new website to the world wide web as of 8/1/2017. Our objective is to continually improve our digital appearance and to make sure we are telling our story as accurately and with as much punch as possible. The investment industry is undergoing numerous changes: from ETFs gaining traction to DOL rules about fiduciary duty.

As the Great One Wayne Gretzky articulated so well “I want to skate to where the puck is GOING, not where it IS.”

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Asset Allocation vs. Stockpicking: No Contest
With apologies to Jack Bogle, if ever there was a period that proved the benefit of a global asset allocation, the first half of 2017 was that period.

Home-Country Bias is Sub-Optimal
We are big fans of Vanguard and their venerable founder Jack Bogle, who is still active in thought leadership in the investment business. We saw him speak recently at the CFA Institute Global Conference in Philadelphia. When asked a question about investing in global equities, Bogle hewed to his long-standing belief that investing in US multinationals (like Coca-Cola or Procter & Gamble) will provide all the foreign equity exposure an investor could desire.

On this issue, Bogle is missing the point. US multinationals may indeed get much or most of their revenues outside the US, but their shares are traded in the US, in US dollars and thus their share prices move like US stock market indexes.

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CFA Charterholder Badge
The CFA Institute—our professional organization—has begun issuing the CFA Charterholder badge to CFA Institute members in good standing.

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