Good Start in 2015 for Diversified Portfolios

Every year I always look forward to the NCAA basketball tournament.  Everyone seems to be excited as even small schools have a chance against the power schools. I love how the competition for who is going to win it all is settled not by computers or pollsters, but on the court. As we write this, the coach with the most Final Fours since 2000 is Michigan State coach Tom Izzo with 7 appearances, including this year.

A big key to success has been his team’s excellent free throw shooting under pressure. To help with this, many have enlisted the help of MSU professor Tom Carr.  According to Prof. Carr, when players begin overthinking their free-throws, they unintentionally end up returning to a “novice status” in game situations, no matter how much they have practiced. “They decide, ‘I need to control every little thing about this, and I need to think about it so it doesn’t go wrong,'” Carr continues, “of course, what they already have is this integrated system in their head which, if they just do that, would work. But they interfere with that and try to consciously change what they are doing. That disrupts the skill they have established through all that practice and focusing on the goal.”  Wise words indeed!

Similar comparisons can be drawn as we review investment performance in Q1.  Entering 2015, there were a lot of media discussions pointing to 2014 as evidence that all you need for a good portfolio is an index US fund and a bond fund index and then forget about it.  It would have been easy to start changing, overreacting, and moving away from diversification (including International and Emerging markets) and long-term strategies to chase short term gains. The relatively strong Q1 performance of our size and value diversified portfolios vs. the S&P 500 (up 1%) of Small Cap Value stocks (up 4%), International (up 4.3%), and Emerging markets (up 2.2% in DFA Core) in addition to diversified fixed-income reminds us to keep up the consistent practice.  So like Coach Tom Izzo and his team, cheers to the discipline of focusing on the strategic long-term goals to achieve maximum success, on the court and in portfolios!

Tax Season Reminder

It’s not too late to make 2014 IRA or solo 401K contributions for 2014.  To ensure contributions are processed in time, please get these to our office  no later than April 13th.

And speaking of our offices…

We are excited to have expanded space to better serve clients.  Our new office location is:

106 Mission Ct., Suite 703, Franklin, TN 37067

You may still drop off at 354 Cool Springs Blvd location, but on-site meetings will be at the new location.

As always, at E|Financial Alliance our mission is to help to give you peace and comfort with a plan for success – thank you for allowing Destin and I to partner with you on your future success.

Mitch & Destin