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Insights



THE ONLY RIGHT WAY TO VIEW AN ASSET

You’ve got to look at the portfolio as a whole, not just position by position. And if you’re trying to reduce the volatility or uncertainty of your portfolio as a whole, then you need more than one security obviously, but you also need securities which don’t go up and down together. — Harry Markowitz   Steve Nash played 18 seasons in the National Basketball Association (NBA), where he was an eight-time All-Star and a seven-time All-NBA selection. He was also
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Value vs Growth – A Brief Description

Growth companies are usually newer, more technologically driven, up-and-coming businesses with sky-high investor expectations. They are usually considered the industry disruptors that may or may not continue to innovate and expand. This can make investing in these companies more speculative in nature, because a lot of today’s success is to be determined by tomorrow’s earnings. Value companies, on the other hand, tend to be more mature companies that may be undervalued based on their proven long-term profitability and strong foothold
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Who Manages Your Money After Death?

In the simplest situations, after your death, you leave your money outright to your spouse if he or she is living. Then, when your spouse passes, they leave the remaining money to your children. This assumes a straightforward family scenario, perhaps with only one marriage involved. Ideally, everyone is experienced with money management, has happy and stable relationships themselves, and there are no major personal issues to worry about. The ideal and uncomplicated situation is rarely the real family dynamic.
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Should You Invest When the Market Is High?

Concerns about market downturns certainly come as no surprise. After all, steep corrections and crashes can be disconcerting for even the most steely and disciplined investors. What has been surprising to me, however, is the number of inquiries I have received over the years raising concerns about the stock market being “too high” or “overvalued.” These concerns generally manifest themselves in some variation of questions like the following: “Now that the market is so high, should I reduce (or eliminate)
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The Next Normal

A year ago, at the end of March 2020, the S&P 500 was down nearly 20%(1) and the world was scrambling into lockdown. Many experts wrote articles telling us where we would be in a year. I don’t remember reading any that said the S&P 500 Index would be up 56% over the next 12 months. But that’s what happened. I didn’t predict any of that. I never do. Last June, I spoke about the Old Normal and how we
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To Bit or Not to Bit: What Should Investors Make of Bitcoin Mania?

Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional money, no paper notes or metal coins are involved. No central bank issues the currency, and no regulator or nation state stands behind it. Instead, cryptocurrencies are a form of code made by computers and stored in a digital wallet. In
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Tales from the Crypto: How to Think About Bitcoin

“Everything you don’t understand about money combined with everything you don’t understand about computers.”- HBO’s Last Week Tonight with John Oliver, March 11, 2018 Bitcoin and related cryptocurrencies (now numbering in the thousands) are the subject of much debate and fascination. Given bitcoin’s dramatic price changes, it is not surprising that many are speculating about its possible role in a portfolio.   In its relatively short existence, bitcoin has proved extraordinarily volatile, sometimes gaining or losing more than 40% in
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Large and In Charge? Giant Firms atop Market Is Nothing New

A top-heavy stock market with the largest 10 stocks accounting for over 20% of market capitalization and a marquee technology firm perched at No. 1? This sounds like a description of the current US stock market, dominated by Apple and the other FAANG stocks (1), but it is actually a reference to 1967, when IBM represented a larger portion of the market than Apple at the end of 2019 (5.8% vs. 4.1%). As we see in Exhibit 1, it is
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Think Investing Is a Game? Stop.

It’s easy to view the stories of market speculation that have dominated the news recently as cautionary tales for individual investors. But we can also look at the current moment as an opportunity to welcome a new group of investors to the market: those who have been drawn in by all the high-stakes action, and yet may want a consistent, long-term investment solution that doesn’t keep them up at night. This is probably a good time to mention that investing
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Flexibility in Practice: How We Handled GameStop

GameStop has been front and center in the financial news on account of the stock’s significant price volatility over a few weeks. And that has put it top of mind for many clients, as we’ve been fielding questions on how GameStop’s volatility was handled in our portfolios. This incident serves as an opportunity to highlight how Dimensional’s investment process is built to handle developments within markets, given that many of our portfolios held GameStop in January. GameStop’s rise and fall
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