Notes from the Federal Open Market Committee Meeting

by Scott Smith, CIMA®

Based on expectations, the FOMC could raise interest rates twice in 2015 and four times during 2016

C&J Wealth AdvisorsU.S. equity markets have been quite volatile over the last two weeks as investors anticipated and digested the commentary from the recent Federal Open Market Committee (FOMC) meeting held in March. In their press release, the FOMC acknowledged improvement in the unemployment rate and household purchasing power from lower energy prices.  It also affirmed that the current zero to .25 percent target range for the federal funds rate remains appropriate. It’s unlikely that an increase in the target rate will occur at the April FOMC meeting as committee members want to see continued improvement in the labor market before making an initial increase in the federal funds rate.

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The Risk of Missing Temporary Financial Gains Versus the Risk of Permanent Losses

by Scott Smith, CIMA®

Financial GainsTwo weeks ago, I attended the Investment Management Consultants Association’s New York conference and will share some of the insights from that meeting in an upcoming blog post. Today, we will look back on the career of Jean-Marie Eveillard and use his experiences on the risk of missing temporary financial gains versus the risk of permanent losses.

Jean-Marie Eveillard is a distinguished investor who served more than 25 years as portfolio manager at First Eagle Funds. From the fund’s inception in 1986 through March 1997, First Eagle Global notably outperformed the MSCI World Index by nearly 100%.

From 1997 to 2000 as stock market valuations were high and the internet mania kicked into gear, Jean-Marie responded by selling some of his appreciated stocks and raising cash as well as gold instead of joining the internet bandwagon. During these three years, First Eagle performance trailed the market substantially and Jean-Marie went from looking like an astute value investor to an old, stubborn technophobe. He lost nearly half of his clients in the process and almost had to close down the funds. Around that time, Jean-Marie was quoted in saying: “I’d rather lose half of my clients, than lose half my clients’ money.”

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