Without question, the biggest single event of the second quarter was “Brexit” – the United Kingdom’s decision to withdraw from the European Union. As has been written by many, it has historic implications, and the effects of this vote will play out over a long period. As expected, markets around the world reacted negatively, with two-day losses approaching 10%, while the U.S. market response was less, down 5%. And then surprisingly, a three-day snap back! World markets gained back around 6%, and the U.S. market returned to pre-Brexit levels.
When we talk about the stocks that typically populate our mutual fund portfolios, or as you read the commentary from the funds you own, you might occasionally notice reference to the concept of “capital allocation,” most commonly in a context like, “The managers of company XYZ are skilled capital allocators.” So, what do we mean by capital allocation, and why is it important?
Medley & Brown Blog
At a dinner party recently, a friend and I discussed education costs, which led to a further discussion about my feeling that many professionals, and successful business people, accumulate very little in net worth during their working years, outside of their business retirement plan. Regular investment accounts at brokerage firms, monthly investment plans at mutual funds, bank savings and money market account . . .I do not see these accounts as often as I would expect.
Tim’s January 7, 2016, blog included a section about living below one’s means. I’m going to expand on that topic a bit (by golly, it’s worth repeating), and I’ll add a few tips on how to implement a budget or plan to accomplish that goal.
Meet Our Team
Tim C. Medley
Tim Medley has been in the investment business since 1967, founded the predecessor to our firm in 1988, and was the first person in the State of Mississippi to be awarded the CFP® certification.View Profile
Eddie Carlisle, CFP® joined Medley & Brown, LLC, in May 2006, having previously practiced law for five years at Watkins & Eager, PLLC.
Eddie serves as the firm's Chief Compliance Officer.View Profile
Julius Ridgway, CFA joined Medley & Brown, LLC, in July 2002. He has over 15 years of direct investment experience, and spent the previous ten years involved in various aspects of financial services, banking and real estate.View Profile
Doug Muenzenmay, CFA, CFP® joined Medley & Brown, LLC, in April 2010. Doug has 24 years of capital markets experience including portfolio management for individuals, institutions and endowments.View Profile
Quotes & Commentary
Since 1926, the market’s cheapest stocks have outperformed their more expensive counterparts by 4.6 percentage points annually, according to data assembled by Dartmouth’s Kenneth French. But that was then. Since February 2007, the cheapest stocks in the U.S. have lagged their more expensive counterparts by 2.6 percentage points annually....