Here in Gaia Capital Management's Viewpoint you will find a selection from our weekly commentaries and from our quarterly Strategic Insight publications. Just contact us if you would like to receive these publications on a regular basis. They're complimentary, free of charge.



Strategic Insight

Brushing aside worry closets of concerns, stocks and bonds – particularly those in the U.S. – have soared past their 2007 peaks. Stocks have done their two steps forward, one step back dance for over eight years now, the back step getting scary only twice (in 2011 and in 2016). The wheels are in motion for all the good times investors have had to endure an autumn, followed by a winter before seeing another spring, so to speak.
Eating snails? Yep, the French consider the escargot (sea snail) a delicacy. Flavored with enough garlic, they really aren’t too bad. And dividends? You don’t have to flavor nor cringe when you hear their name. Given that dividend income and growth forms the core of our investment strategy, we thought you would like to know more about these little building blocks of permanent wealth.
Most of us have seen our income from dividends and interest drop in the five years from 2011-2015. We have been touting growing income as a major objective of ours. Read on to find out why it can temporarily drop.
When we begin investing it is wise to think about the outcome we want to receive and the volatility or uncertainty we are willing to accept as our investment progresses toward our desired outcome. To illustrate outcome and investment experience, Michael Kitces, a noted financial planning thinker, ran a study of three retirement income strategies, each with thousands of investment observations over a 50-year period.
Diversification reduces risk, a widely known fact. But few agree on exactly how to diversify across investment types to achieve the promised low-risk land. The diversified model has the advantage of offering excellent risk-adjusted returns year after year, though one or more of its components may have soared or crashed. This is diversification in action. Read on...
If investing were only about accumulating an account balance, we would all go nuts as investment accounts wind to a peak, then give back some before rising again and repeating the process - with the effect that we are notably higher after some years of the back and forth movements. Those back and forth movements represent uncertainty more than anything else, as markets try to be predictors of the next six to nine months.
How do we get the high long-term returns stocks offer without the worry they cause when they fall hard every few years? Furthermore, how can we build a high, sustainable and growing income in our retirement years? Read On...
Our emotions are wired so that we smile when we make money per the report of a statement and growl, moan, shriek, cry or otherwise express anguish when we have had what seems like a serious paper loss. How can we keep our emotions from flaring up when we have suffered one of investing’s inevitable setbacks?

top of page

Pursestrings

Here in Brazil many consumer goods are priced as if they will be bought on credit, with a small down payment and several periodic payments to complete the purchase. Parcelando, as they call it, is popular in no small part because services here are cheap and goods are expensive. In the States, credit cards are the equivalent of parcelando as you get the bank’s money up front. Unfortunately, you end up paying substantially more than the cash price by the amount of interest you pay...
Personal money management starts with two simple questions: “How long will the purchase I am considering give me pleasure?” and “How much joy will I receive by having it?” Multiply your happiness by balancing consumables with durables even as you progress toward the day when your savings will be your paycheck.
Today we discuss what today’s “retirement” really is and why even at an early age it will serve you well to envision the day when you can be self-sustaining.
While it’s true that a penny saved is a penny earned, it is also true that a penny left to invest at 7% for 100 years is worth $10.96. How can something so small grow into something useful when nothing is added (or taken away)?
When I was 21 and a sailor in Japan, I received a check for $300, a distribution from the Federal retirement plan in which I was briefly enrolled. I spent it. But now as I look back, what did I trade off for a few days of fun and games in Yokosuka?
We are happy to send you our first issue of Pursestrings, a (usually) weekly note whose aim is to promote financial well-being among our retirement plan participants. Feel free to send us comments or suggestions for future topics around money, happiness, spending and saving as they relate to your sense of well-being and material comfort.

Saturdays With Jim

Does the VIG-SPY study we wrote about last week give us anything we can replicate going forward? What is the source of VIG’s win? Is it VIG alone that could have outperformed the S&P 500? Hint: the factor underlying VIG’s outperformance is the same factor that drives Gaia’s investments for you. It also drives the performance of the funds in the following study.
We want to illustrate today why investment should not be evaluated annually or anything less than a full market cycle. What seems best while looking up close can turn out not to be best when viewed by a long-term perspective.
Expect a move to Progressivism II beginning with the 2018 election. If we are right, government will enact domestic programs aimed at serious redress of the income inequality that has pervaded the land for some four decades. This writing shares how we are preparing for a multi-generational shift in the political winds.
To borrow a well-worn idea, safety is in the mind of the beholder. This said, we can discuss how we are placing your portfolios (accounts) in service for what could be the last leg of this eight year rising market. Following is a series of recent statements and actions by investors and pundits accompanied by our thoughts and actions, which are in general terms as your accounts have risk and return profiles across a wide spectrum.
A serious turndown is not in sight, but neither was the Global Financial Crisis in sight to most people before it ravaged the global economy and the social structure of many countries. Today we discuss our account “safety net,” our allocation to bonds.
We have no claim to calling the exact beginning or the end of a bear market where stock index losses run 20% or more from the prior highs. But we do have control over how much of the market loss we will experience. Today we project into a gloomy time where the big gains of the last eight years are all but forgotten and markets are down 25% and threatening even more mayhem on stock investors.
Retirement literally means to leave a place or a situation. Retirement in the context of our working lives, then, means leaving your work – but for what and with what degree of self-sustainability or financial independence? Today we discuss what today’s “retirement” really is and why even at an early age it will serve you well to envision the day when you can be self-sustaining.
As investors, we are constantly pummeled with information and opinions from the media and the punditry – and factual stuff like statements and reports. How do we separate the wheat from the chaff and process and use the input we receive from our daily lives, statements and reports to get a sense of the progress we are making?

top of page

Gaia Investment Process

Why invest in funds of securities rather than the securities themselves? To mitigate the “business risk” inherent in one company or a few of them, professionally managed funds were created. The fund investor gets instant diversification to reduce business risk, the buying power of a larger portfolio and professional management of their invested money.
“The Market” is common parlance for the stock market, or the place(s) where stocks are originated, bought, sold and (sometimes) die. But what is “The Market” really and why is knowing important to investors like us?

Getting Ahead

Today we continue a new series called Getting Ahead Financially. Should everyone who can qualify own a home? Do the benefits of owning a home outweigh the benefits of alternative uses of the significant chunk of money that must be committed to owning a private residence? The bottom line – maybe, for some. Read on...
Financial planning for most people seldom proceeds successfully when planning steps and outcomes are dependent on goal setting at the outset. Today we discuss an alternative framework which is more process than goal oriented, in which goals flow in a natural, unforced way.

Uncommon Knowledge for the Common Good

Accumulating a pot of money for later use involves 1) saving, setting aside money from current income, and 2) investing, putting the savings to work earning a return. What we earn on our money is far more important than how much we save; however, the amount we save is also a key component to long-term wealth.
Looking beyond such obvious requirements as having adequate savings for emergencies and health care, enough retirement capital to meet at least our minimum retirement income requirements and our expected longevity from the date of retirement, there are three investment-specific drivers of our retirement income. Read on...
Reaching for maximum returns magnified timing risk, the risk that markets would be overvalued when we begin our program, resulting in perhaps a large initial loss for us as markets return to normal valuations. Here we discuss how we can moderate the risk of underperforming our potential returns.
This is the first in a series which discusses how the interplay of savings rate, investment return and investment time horizon should be considered as we set out to invest. We will examine how the three factors work in a long-term (35 year) program. Afterwards, we will consider how they combine in a shorter program (15 years).


top of page

All material presented in this section is for the enrichment of the viewer and is not meant to be a solicitation to purchase or sell any security or service that Gaia Capital Management, Inc. may offer.

Articles with the icon require the Adobe Reader for viewing. You will need the Adobe Reader, version 6.0 or higher, to read these bulletins. For a free download of the reader, visit adobe.com.









Home Page | Contact Us | Privacy Policy | Terms & Conditions

This site is best viewed with Internet Explorer, Version 6.0 or better or Firefox Verson 3.0 or better.
© 2012 Gaia Capital Management, Inc.