march 2015 newsletter what smart investors...
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3/16/2015 March 2015 Newsletter
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March 2015 Newsletter
Featured VideoWhat Smart Investors KnowSmart investors take the time to separateemotion from fact.Link to Video
FinancialDiversification Under PressureBurt White of LPL Research encourages investors to stick to theirplan and not chase the hot asset class.Link to Letter
OffTopicApple Patents a Smart Pen
The U.S. Patent and Trademark Office granted Apple a patent for a pen that could let you write ona notepad and then view your work on the screen of an iPad.Link to article
3/16/2015 March 2015 Newsletter
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Red Oak Financial303 S Kickapoo StLincoln, IL 62656
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There is no guarantee that a diversifiedportfolio will enhance overall returns oroutperform a nondiversified portfolio. Diversification does not protect againstmarket risk.
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Red Oak Financial | 303 S. Kickapoo St. | Lincoln | IL | 62656
March 4, 2015
Dear Valued Investor,
With any investment approach, it is crucial to have a plan, and the bedrock of any investment plan is to have a well-diversified portfolio among various asset classes. The rationale behind diversification is to mitigate risk, as you never know when something could adversely affect one of your investments. If you had a portfolio concentrated in equities in 2008 or in energy-sensitive securities following the recent drop in oil prices, you would have lost a significant amount of your investment value. We diversify portfolios to seek to reduce this risk.
However, simply because diversification has been an effective way to potentially reduce risk over long periods of time, by definition you would expect it will outperform some years and underperform others. Unfortunately, this can be painful when the outperforming asset class is the most well-known U.S. index — the S&P 500, an index of the 500 largest U.S. public companies. This is exactly what happened in 2014 — the S&P 500 significantly outperformed many other often diversifying asset classes, including small cap stocks by nearly 9% and foreign developed stocks by approximately 18%. Therefore, a diversified portfolio last year would have significantly lagged the S&P 500.
So why not just invest in large cap stocks or the S&P 500? Over the past 20 years, the S&P 500 has only outperformed all other major asset classes (including small, mid, foreign developed, and emerging markets) 30% of the time, and it was the worst performing asset class 25% of the time. It is important to stick with your investment plan and be invested in at least several different types of investments. Diversification has historically worked, and as we look at 2015 so far, it may be starting to work again.
In 2015, we continue to look for places to effectively diversify, and we are closely monitoring potential opportunities. In Europe, the European Central Bank is taking aggressive steps to stimulate its economy. As commodity prices stabilize, emerging markets could join the global growth trend. After decades, Japan emerged from deflation with a massive stimulus effort, which may continue to offer an investment opportunity. There are many potential opportunities on the horizon, and as we look ahead, we believe returns may come from a much broader set of investment choices, as we have already started to see in 2015.
Member FINRA/SIPC
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly.
Economic forecasts set forth may not develop as predicted.
All investing involves risk including loss of principal.
All indexes are unmanaged and cannot be invested into directly.
Because of its narrow focus, specialty sector investing, such as healthcare, financials, or energy, will be subject to greater volatility than investing more broadly across many sectors and companies.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform an undiversified portfolio. Diversification does not ensure against market risk.
Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Member FINRA/SIPC
When it comes to investing, it is always important to monitor the risks. A key to risk management is a diversified portfolio. You may not always outperform the most well-known index that many undiversified portfolios emphasize, but that should not lead you to abandon your plan and chase the hot asset class. We remain committed to seeking to outperform in different investment climates, but doing so with a well-diversified portfolio that does not take on undue risk.
As always, if you have any questions, I encourage you to contact your financial advisor.
Sincerely,
Burt White Chief Investment Officer Managing Director, Research
This research material has been prepared by LPL Financial. To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and makes no representation with respect to such entity.
Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose ValueNot Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit
3/9/2015 Apple patents a smart pen that could copy your handwriting onto an iPad
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Apple patents a smart penthat could copy yourhandwriting onto an iPad
BY REX SANTUSDEC 30, 2014
The U.S. Patent and Trademark Officegranted Apple a patent on Tuesday for a
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IMAGE: U.S. PATENT & TRADEMARK OFFICE
3/9/2015 Apple patents a smart pen that could copy your handwriting onto an iPad
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"communicating stylus" that would capture digitalcopies of handwritten notes and drawings from avariety of surfaces, from paper to a whiteboard.
The pen would use accelerometer sensors,device storage and wireless transmission to sendhandwritten notes from the stylus to a digitaldisplay, according to the patent, first spottedby Apple Insider.
SEE ALSO: 12 Days of Tech: The products wetruly love this Christmas
In theory, the pen would let you write on anotepad and then view your work on, say, thescreen of an iPad. The stylus would also workwith different tips, so users could write usingpencil, pen or marker.
Similar "smart" pens already exist.The LiveScribe 3, for example, can digitally
3/9/2015 Apple patents a smart pen that could copy your handwriting onto an iPad
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capture written notes, as long as users write on aspecial type of paper. What would set the Applestylus apart is that it could work on any surface,thanks to 3D motion sensors. Theoretically,someone could write on a table or even in the air,and the words would be transferred to a digitaldevice.
Rumors abound about an iPad Air 2 with a largerscreen, which could possibly hit stores in springof 2015. A bigger iPad would be a perfectcompanion for such a stylus outlined in thepatent; the Adobe Ink and Slide digital drawingtools, for example, are often used with tablets.
But let us not forget that late Apple founder SteveJobs famously despised stylus pens.
"Who wants a stylus?" Jobs said at the 2007MacWorld conference. "You have to get 'em, andput 'em away. You lose 'em. Yuck. Nobody wantsa stylus."
Well, it certainly looks as though Apple isconsidering one. Apple's has filed for styluspatents in the past, too.
Of course, companies file patents all the timeand are constantly developing technology thatmay never hit the market. So it's unclear whetherApple is merely covering its bases or if we'll beseeing a Cupertino-approved smart pen in the
3/9/2015 Apple patents a smart pen that could copy your handwriting onto an iPad
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near future.