Mountain Vista Wealth Management

Guiding from Valley to Peak

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Q3 2021 Investment Letter

INTRODUCTION

“Building wealth is a marathon, not a sprint. Discipline is the key ingredient”
-Dave Ramsey

Equity market returns over the last decade have been remarkable and were well above long-term averages. Since its introduction in 1927, the S&P Composite/S&P 500 have compounded between 10-11% annually. Over the last 10 years, the index has returned 17%. These outsized returns have outpaced earnings growth, pushing the forward price/earnings ratio of the S&P 500 north of 20x, a level not seen since the Dotcom boom in the early 2000s.

High valuations do not necessarily mean the market is going to crash. There are logical reasons for higher valuations, such as low interest rates, greater concentration of capital light tech businesses, no/low transaction costs and accessibility of data. That being said the margin for error has been reduced greatly. [Read more…] about Q3 2021 Investment Letter

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Should I Buy Stocks or Rental Property?

There are many ways to invest and grow your savings. Unfortunately, there are just as many opinions on which investment is the best choice at any moment in time. Adding to the confusion, the most outspoken commentators may have incentives that influence their viewpoint.

In this article, we are going to look at look at two wealth building heavy-weights, stocks and residential real estate. They each have their own pros and cons, as well as fervent promoters.

[Read more…] about Should I Buy Stocks or Rental Property?

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Q2 2021 Investment Letter

INTRODUCTION

“The more things change, the more they stay the same”
-Jean-Baptiste Alphonse Karr

While the last 15 months have been anything but ordinary, someone simply observing financial market performance over the last three months could be excused for assuming it was business as usual.  Many of the trends that were in place before the pandemic, namely lower rates, growth/large cap outperformance and daily all-time highs in the equity indices, reestablished themselves. [Read more…] about Q2 2021 Investment Letter

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Q1 2021 Investment Letter


INTRODUCTION

“Don’t look for the needle in the haystack. Just buy the haystack.” -Jack Bogle

In reviewing the performance of the broad market indices, one could be forgiven for assuming that it was a very orderly quarter.  Not readily apparent in the returns is the (-8%) peak-to-trough drop of QQQ (Nasdaq 100 ETF) or the precipitous drop in high growth, “stay-at-home” stocks like Zoom, Teledoc or Peleton.  Propping up the index performance, are companies in the energy, industrial and financial sectors.

Some may say that this return dispersion highlights the opportunity for active management to create alpha.  I’ve also heard that this is a “stock-pickers market” repeatedly over the last 12 months.  While there is a grain of truth to this, it is mostly marketing.  There are market winners and losers every year. [Read more…] about Q1 2021 Investment Letter

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Q4 2020 Investment Letter

INTRODUCTION

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”
– Charles Dickens, A Tale of Two Cities

As the sun sets on 2020 and I reflect on the last twelve months, I am struck by the many contradictions in our financial, political and personal lives.  Each individual’s views and experiences have been forced even wider apart over the last twelve months.  Charles Dickens could have been writing about our world in the passage above, taken from his famous book. [Read more…] about Q4 2020 Investment Letter