Featured entries from our Journal

Details Are Part of Our Difference

Podcast Episode – Meir Statman

With the Recent Events in Ukraine, Should I Make Changes to My Portfolio?

Embracing the Evidence at Anheuser-Busch – Mid 1980s

529 Best Practices

Category: Philosophy

2022 Investment Performance

It’s no secret that 2022 was challenging for both the stock and bond markets. Stocks ended the year down 18%*, while bonds were down 13%**. How did we do in 2022? Thanks to our compliance group, all we can say here is that our strategy of investing in low-cost, diversified strategies that tilt toward small, value, more profitable stocks meaningfully outperformed the S&P500 index in 2022. 

As much as I would like to pat our firm on the back, you know our refrain: one year is essentially meaningless when it comes to investing. Due to the volatility and randomness of markets, any strategy can outperform or underperform in any given year. Our strategy certainly does not outperform every year and can even underperform several years in a row. To have real confidence in an investment strategy’s reliability, investors must look at how it performs over decades, not just years.

To see how we measure up over the long haul, we go back as far as we can, looking at the investments we recommended each year (and own ourselves) to see how our philosophy has held up over time. Our favorite chart compares the value of a hypothetical $1 invested in the year 2000 to 2022. Some of you may be familiar with Paul Harvey’s famous line regarding “the rest of the story.” Shoot me a note at zenz@hillinvestmentgroup.com for the details and the rest of the returns story. We can share how our recommended equity strategy has performed over time and the magnitude of the benefit of taking the long view.

If you have been a client for a while, you have likely seen the benefit of a long-term, evidence-based strategy show up in your portfolio.  If you’re not a client, ask yourself why.  Then pick up the phone and call us. You can schedule a call with me anytime here.  

* S&P 500 Index.

** Blomberg US Agg Index 

Past performance may not be indicative of future results.

The values used in this report were obtained from sources believed to be reliable, including fund performance data. Performance numbers were calculated by HIG using historical records of HIG’s recommended equity investment model and public index fund performance data.

Hill Investment Group is a registered investment adviser. Registration of an Investment Advisor does not imply any level of skill or training. This information is educational and does not intend to make an offer for the sale of any specific securities, investments, or strategies. Investments involve risk and, past performance is not indicative of future performance. Consult with a qualified financial adviser before implementing any investment strategy. There are no implied guarantees or assurances that the target returns will be achieved or objectives will be met.

Mutual Funds That Consistently Beat the Market? Not One of 2,132.

In a recent article in the New York Times Jeff Sommer shares how professional stock pickers are doing.

“Each year, some investors manage to do it (beat the market), of course, but can they do it consistently? A new study of actively managed mutual funds by S&P Dow Jones Indices asked that question and came up with a startling result. It found that not a single mutual fund — not one — managed to beat its benchmark in either the U.S. stock or bond markets regularly and convincingly over the last five years.

 

 

Marginal Utility and Diminishing Return

We don’t know when to stop.

At least, I sure don’t.

Sometimes, on the way home from work, I’ll swing by the grocery store, buy a pint of ice cream, and eat it.

That’s right. The whole thing.

Yes, I know. That’s a LOT of ice cream.

I’ve noticed that a very interesting thing happens when I do this:

Bite 1: Best thing in the world, ever.

Bites 2-10: Really good.

Bites 11-15: Good.

Bites 16-20: Meh.

Bites 21+: OK, now I’m sick.

I learned this lesson the first time I ate a pint of ice cream in a single sitting.

And yet, for some reason, I still occasionally repeat the experiment.

Of course, this phenomenon doesn’t only occur with ice cream. This is a well-documented economic principle called Marginal Utility, and, you guessed it, it applies to money, too.

Beyond a certain point, having more money will not lead to more security, freedom, and happiness.

Because security, freedom, and happiness do not come from more money (at least, not beyond a certain point). They come from knowing when to stop.

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Featured entries from our Journal

Details Are Part of Our Difference

Podcast Episode – Meir Statman

With the Recent Events in Ukraine, Should I Make Changes to My Portfolio?

Embracing the Evidence at Anheuser-Busch – Mid 1980s

529 Best Practices

Hill Investment Group