The Flyer:

I was reading the 4th quarter 2023 report published by Artisan International Value Fund (APDKX/ARTKX). This report is provided to all shareholders and offers an overview of recent market data as well as some thoughts on where it’s all going. Reports like this are often published quarterly and annually for anyone to read.

We've had countless conversations with clients this year about the importance of getting their cash off the sidelines. Yes, money markets and high-yield savings accounts are paying great rates compared to just a year ago. This is great news for your short-term cash needs. But what about for longer-term cash?

While it is true that REITs are under scrutiny during this unique economic environment, I do not think it makes sense to count them out just yet. In a recent webinar, Summer Money Vibes, one of our clients asked a good question. He wanted to know if the high interest rate environment meant that real estate was a bad investment. As always, let’s look at rates in context rather than just this moment in time. The below graph shows average mortgage rates from 1971 through August of 2023 – about a 50 year period. You can see from the graph that the rates we enjoyed from 2001-2020 are the lowest in the fifty-year period presented. The historic low occurred around December of 2020/January of 2021. Over the course of the past 2 ½ years, the purchase of a home with a 30-year mortgage increased to a hefty rate of about 7%. While that number is painful for those of us who have only been buying homes over the past 20 years, you can see that is in line or below the median rate of 7.41%.

The purpose of this blogpost is to educate new investors and to remind seasoned investors about what they really own in their investment portfolios: equities.

A diversified portfolio that includes all facets of the world economy helps us to spread our risk around, and it encourages us to stick to our plan. It also acknowledges that there is no “right” answer. Routine savings and committed investing to a diversified portfolio that takes into consideration the quality of its holdings IS the plan. As investors, we can be easily overwhelmed by asset options. Propel advisors have spoken on that subject countless times over the years in individual client meetings, in our blogposts, on our webinars, and through our podcast. We keep talking about it because it’s true, and it’s also one of the primary ways an investor makes or loses money.

Have you ever walked into a store looking for a specific product and find a few different options? You may opt for the cheapest option because it will probably work just as well as the more expensive one. When our CPA Emily Agosto worked at a hardware store as a teenager, she saw many customers face this choice. Her store offered two hammers for sale: a cheap store brand and a superior, albeit more expensive, brand. Which one did customers typically buy? If you guessed the cheap one, you’re right. They figured the cheap hammer would get the job done for what they needed to do. After all, how much difference could there be between hammers?