Staff Updates


Having completed the annual visitations from family members, Jonathan and Sara are turning their sights to preparing for the imminent departure of Sam and Ingrid. By the end of August their household will have shrunk from four to two. Ingrid will take up residence in Bologna, Italy for four months to sharpen her Italian skills. In January she relocates to Toulouse, France to further hone her French. Later this month, Sam moves to the Los Angeles area to begin the Ph.D. program in geography at UCLA. Such great adventures ahead for them both! And Sara and Jonathan are looking forward to adventures of their own with their new-found freedom.


This has been a productive summer for Irina who is celebrating passing the Level I of the Chartered Financial Analyst (CFA) exam, which has been dubbed “the hardest test on Wall Street.” Next up for Irina is studying for the Investment Advisor Representative licensing exam, after which preparation for the Level II CFA exam (next June) will begin.



Jason is happy to report he passed the Investment Advisor Representative licensing exam earlier this summer, which allows him to make investment recommendations and enter trades for clients. He is even happier to report that he and his wife will welcome their first child – a daughter – into their lives in December. They are both excited to begin the adventures of parenthood, and they have been doing their best to enjoy their freedom while it lasts.

A Reminder About Requesting Withdrawals

In case you missed our last newsletter, we want to make sure you are aware of a new policy related to withdrawals from your accounts at TD Ameritrade. Due to an increased threat of electronic fraud, we are now required to obtain verbal authorization to initiate withdrawals from your accounts. You can still email the details of your instructions, but if you do so please also follow up with a phone call. You can confirm your request with any of us – Jonathan, Irina, or Jason – and if we are not available a voicemail confirmation is sufficient. We apologize for any inconvenience this extra step may cause and we appreciate your understanding as we continue to ensure the security of your accounts.

Is Now the Time to Refinance Your Mortgage?

With mortgage rates at or near all-time lows, many of you may have considered refinancing your mortgage. And if you haven’t considered it, we would strongly encourage you to do so. Of course, refinancing isn’t appropriate for everyone but there are often a number of benefits for many people, including:

  • Locking in a low interest rate
  • Reducing monthly payments
  • Freeing up cash flow to save for retirement, pay down high-interest debt, or fund hobbies
  • Cashing out some of the built-up equity to use for home renovations, investments, or other purposes

As with most financial decisions, there are a lot of details to consider when choosing the right course of action. We have helped many of our clients make the complicated choice of whether or not to refinance, and we would be happy to discuss with you whether it makes sense in your particular situation.

There is No Such Thing as a “Best Investment for Most People to Buy”

By Irina Pack

An article published in the USA Today titled “Warren Buffett: This is the best investment most people can buy” was forwarded my way recently. I find it interesting to read statements attributed to Warren Buffet, even if the journalists covering them sometimes rephrase or take things out of context.  Judging by the quotes in the article, all Warren actually asserted was that the Vanguard 500 Index fund is a great choice if you are looking for passive exposure to the “American industry” as a whole – which is not the same thing as the best investment for most people to buy as the journalist stated.

And here are a few reasons why Warren Buffett or anyone else with a moral compass and a finance background would not and should not make such a statement:

  • There is no such thing as a best investment for most people because people have different investment goals, risk tolerances, investment horizons, tax considerations, liquidity needs, etc.
  • Volatility. Not everyone would be able to stomach the -37% drop the fund experienced in 2008. And if one had to withdraw money for expenses or required minimum distributions that year (as retirees typically do), he or she would have certainly captured the losses.
  • Knowing when to buy is just as important as, if not more important than, what to buy.  Given the current environment (high P/E ratios, high volatility, presidential year, and possibility of a recession), even I, with my pretty high risk tolerance, would not plunk down my money for an S&P 500 fund right now. No one can predict when the market is at its lowest point, but putting one’s entire wealth into the American industry at a time when the market is priced at an all-time high even though the S&P 500 companies are expected to post shrinking earnings for a fifth straight quarter would not be wise.

So, while the bad news is that there is no best investment for most people, the good news is that we here at Journey Tree realize that and are committed to making investment decisions that are in each of our clients’ best interests and consistent with their goals, risk tolerances, investment horizons and needs.

The Rollercoaster Returns

Over the last month or so, stock markets have tacked on another 2-3% gain. This rise came on the heels of an abrupt 6% drop in the market immediately after the surprising vote in Britain to leave the European Union. What is going on?

Volatility has returned to the markets in the last year after several years of positive market action, as shown in this five-year chart of the New York Stock Exchange Index.  Cited causes of recent market declines include an economic slowdown in China, huge losses in the oil industry, and geopolitical events such August Newsletter Chartas “Brexit.”

Yet why does the stock market keep bouncing back? It appears to be a tug of war between a range of concerns (such as slowing growth and debt problems in China, fear that the European Union will break up, the possibility of rising interest rates, and declining earnings for U.S. companies) and the need for investors worldwide to put their money to work in the best place they can.

Amidst a continuing global economic slowdown, the U.S. looks to many like “the best house in a bad neighborhood.” It is likely that after recent market drops foreign investors jumped in to buy stocks, producing the unusually quick rallies in prices we have seen over the last year.

Despite recent all-time highs for some U.S. stock indices, other indices are still below their peaks of a few years ago.  Many stocks have been flat or down for over two years.

Market gyrations aside, stock prices remain very high from an historical perspective leaving scant room for much upside. With this caution in mind we continue to have a lower allocation to stocks than usual and are prepared to move money into stocks as prices become more attractive.

All in all, it has been a modestly positive year for Journey Tree accounts so far in 2016, thanks to strong performance from our roster of closed-end income funds and decent returns from our core stock and bond funds. That said, significant future returns are likely to be hard to come by until stocks get cheaper and interest rates rise again.