Client Letter - Richard C. Young & Co., Ltd.

The Forlorn, the Unloved, and the Out-of-Favor

May 29, 2016

May 2016 Client Letter

From the time he took over the Windsor Fund in 1964 until his retirement in October 1995, John Neff delivered to his shareholders one of the most impressive returns in mutual fund history. Over Neff’s 31-year tenure at the helm of the Windsor Fund, a $10,000 investment grew to over $564,000. That same $10,000 investment in the S&P 500 would have grown to only $233,000—the average annual return difference between Windsor and the S&P 500 was only about 3% per year; but compounded over three decades, it resulted in an extra $331,000 of wealth.

Gold’s Role is to Hedge Against Inflation Risk

April 29, 2016

April 2016 Client Letter

One of gold’s basic roles in an investment portfolio is to hedge against inflation risk. Inflation is a destructive force that can decimate a lifetime’s worth of savings. Over the last 30 years, inflation has eroded the purchasing power of the dollar by nearly 56%. And this has been a period of modest inflation. When factoring in a period of high inflation, the math looks much worse. Since the 1970s, the purchasing power of the dollar is down an astonishing 84%.

Stocks for the Long-run?

March 29, 2016

March 2016 Client Letter

Investing in stocks for the long run has become the accepted wisdom of many investors over recent decades. The media, pundits, and promoters, as well as many brokers and advisors, recommend stocks as the most suitable asset class for investing over the long run. Stocks win over the long run, cash is trash, and bonds are boring, investors are told. The bull markets of the 80s and 90s surely greased the wheels of the “stocks for the long run” band wagon. Jeremy Siegel, professor of finance at Wharton School of Business, even wrote a book on the subject.

Bear Market in Global Stocks

February 26, 2016

February 2016 Client Letter

Small company U.S. stocks have officially entered bear-market territory. The small-company Russell 2000 Index has fallen 26% from its bull-market high. And as of early February, the MSCI All-Country World Index—the gold standard of global stock market indices—crossed into bear country. Emerging market stocks have long been in a bear market, and foreign-developed world equities arrived in bear territory in January.

A Stealth Down Year in Stocks

January 27, 2016

January 2016 Client Letter

For many investors, 2015 was a challenging year. The S&P 500 managed to eke out a positive total return, but it was a handful of stocks (many of the more speculative variety) that carried the market. The average U.S. stock was down more than 4% last year. Take away Amazon, Netflix, Google, and Facebook and the S&P 500 would have finished in the red.