| Fact-based research forms the foundation of a successful investment strategy. At Northstar, we carefully analyze and review economic data and market trends to seek an advantage for our clients. Below are links to our Quarterly Market Commentary and observations on a variety of investment topics our clients have asked about.
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Personal Financial Ratios: An Elegant Road Map to Financial Health and Retirement
by Charles J. Farrell, J.D., LL.M.
Investors commonly use stock ratios such as the price to earnings, price to book, and dividend yield to assess the financial health of a company because the ratios concisely benchmark a company's financial status.
Clients and their financial advisors have no comparable ratios that would allow investors to conduct a similar analysis of their personal financial circumstances. This article establishes a set of personal financial ratios that individuals can use to analyze their financial standing. Just as stock ratios are primarily based on a company's earnings, the personal financial ratios are based on an individual's income. There are three ratios: savings to income, debt to income, and savings rate to income.
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Asset Allocation Can Smooth The Bumps
In 2003 the rising tide of the stock market lifted all ships nicely. This year, most stocks have been stuck in a narrow trading range and investor expectations are guarded at best. Growth stocks are languishing while utilities and energy stocks hot. If it is not one thing it is another. How is an investor supposed to meet long-term objectives if they keep changing the markets?
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Things To Do In A Lazy Summer Market
Summer is fast upon us and if recent history is any indication, the stock market during this season is lazy, sullen and directionless. While you may not be able to do anything about your favorite teenager who acts the same way, there are ways to make your stock portfolio more productive in a lackluster market. Markets that are characterized by narrow trading ranges and low volume can surprise at any time and it pays to stay fully invested yet mindful of the risks. The following ideas may help you profit during such times.
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Fads, Bubbles And Normal Market Cycles: Knowing The Difference Can Save You A Bundle
As investors we often shake our heads at the irrationality of markets and the many infamous examples of painful lessons learned when greed got the best of us. From the great tulip bulb mania that gripped Holland during the 1630s to the DotCom bubble and its aftermath that is still fresh in our minds, many otherwise intelligent and rational people have lost way too much money following speculative bubbles. While the details of each event vary wildly, behavior follows the same script - almost without fail. Only by understanding how they allowed themselves to embrace the new paradigm of the day – be it the seemingly unlimited demand for rare tulip bulbs or the sky-high upside potential in the internet’s ‘new economy’ - can investors inoculate themselves from such ills in the future.
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Knowledge About Hedge Funds Is A Good Thing
The buzz around hedge fund investing is growing louder. In a world eager for alternatives to a mostly lackluster equity market, hedge funds seem just the ticket. With approximately 8,350 active hedge funds and almost $1 trillion in assets, the hedge fund industry is growing its way into many individual portfolios. Having been limited for years to large and sophisticated investors, hedge funds have moved into the mainstream thanks to lower investment minimums for participation and savvy marketing. Are they right for you? Knowledge about how they work can help you decide.
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Managing Concentrated Holdings
Whether you own shares of General Electric that your great grandfather began buying in the 1920’s or you have been socking away shares in your employers’ company for years, you understand very well that having wealth concentrated in one or two stocks carries with it enormous risk. Many studies as well as good old anecdotal evidence show that the odds for success improve significantly over time with diversification.
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