Explore Our
“Off The Wall” Blog

Unique, straight-forward, unfiltered opinion on topics of concern for individuals with newfound wealth.

Today, I’m Blogging From The Global Indexing and ETF Conference


It’s hard to believe that this is the seventeenth annual gathering of The Global Indexing and ETF Conference. It is one of the preeminent annual investment management conferences.  Jan Hatzius, Chief Economist from Goldman Sachs, kicked off this morning’s agenda.  His main points were – sub 3% U.S. Gross Domestic Product (GDP) through 2016 coupled with low inflation and low wage growth.  He is specifically calling for low 4th quarter 2012 GDP due to Hurricane Sandy, but says that the 1st quarter of 2013 will over-compensate for the 4th quarter.

I’ll be speaking to this group tomorrow on how Monument Wealth Management uses Exchange Traded Funds (ETFs) in portfolios.  It’s exciting as well as appropriate to be here, as we are celebrating our 10th year of running an all ETF portfolio on behalf of our clients.  10 years ago, we identified that actively managing ETFs to over and under-weight sectors of the economy was a way to gain global diversification, fee effectiveness, and tax efficiency in a way that was unavailable in other strategies.

Since there are about 500 people here, I think we were right 10 years ago and remain right today. It is fun to see everyone here and lump them into two groups – those with suits and those without suits.  It’s safe to say that if someone approaches me in a suit and tie, they probably want something from me and if someone in casual attire approaches, they probably own their own firm like me.  It’s just interesting to observe.

Here’s how the markets did last week.

Market Returns for the Week Chart 12 3 12 resized 600

More Fiscal Cliff

We cannot escape it and the news continues on the subject.  This, as well as reality, had investors on edge early last week. Then, mid-week, hopeful statements from both sides of the political isle brightened the mood. Once Friday rolled around, the cameras appeared but stocks looked past the camera jockeying which seems to suggest the Street expects some type of deal…eventually.

But here’s the REAL DEAL. None of this should come as a surprise to anyone given some traders inclination to trade off every single fragment of information that is broadcast on a second’s notice.

The real action is happening away from the camera’s eye, and that action is much more important than the running of mouths on TV.

At this point in time, we see three different paths.

First – Congress and the President can’t agree to adjustments and we go over “The Cliff”. Queue the scary music now.  This is unlikely but we do acknowledge that the odds have slowly increased in recent weeks… mostly because we are getting closer to Dec 31st.

Second – Congress and the President agree to adjustments in the current tax and spending statutes, but without major long-term solutions. This is probably the most likely scenario.  That’s unfortunate because the path of least resistance approach obviously does not address the real problems and won’t impress anyone on the global stage.

Third – Congress and the President agree to a long-term credible and balanced approach to the country’s fiscal woes. While this would impress Wall Street and everyone else on the global stage, I say FAT CHANCE.

This would require a framework for both tax and entitlement reform to be agreed upon, but most politicians want to stay clear of entitlement reform, fearing voter backlash at the polls.

Unfortunately, the current projections strongly suggest entitlement programs are on a collision course with bankruptcy and real solutions are going to need to be addressed at some point.

So Path 2 may keep us from driving over the cliff, but the solution may be turning just in time to make a big circle – only to head toward the cliff again down the road.

Please call or email with questions.

IMPORTANT NOTE: Due to industry regulations, comments are not permitted on this blog. If you would like to contact the author, please email us at info@monumentwm.com.

Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 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. All indices are unmanaged and cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged 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. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 is an unmanaged index generally comprised of companies with lower price-to-book ratios and lower forecasted growth values.  The 2, 10 and 30 year Treasury is simply the yield at the close of the day.

(1)      West Texas Intermediate crude spot price is as of end of week.

(2)      London Bullion Market Association; gold fixing pricing at 3 p.m. London time.


David B. photo

David B. Armstrong, CFA

President & Co-Founder

Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....

Learn more ...


Please remember that past performance is no guarantee of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Monument Capital Management, LLC [“Monument”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Monument. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Monument is engaged, or continues to be engaged, to provide investment advisory services. Monument is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.

A copy of the Monument’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.monumentwealthmanagement.com/disclosures. Please Note: Monument does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Monument’s website or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results.  It should not be assumed that your Monument account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your Monument accounts; and, (3) a description of each comparative benchmark/index is available upon request.

Please Remember: If you are a Monument client, please contact Monument, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.  Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Stay up to date!

Subscribe to our “Off the Wall” Blog for articles and videos on all things wealth management, by all members of our Team. Unlike Facebook, we will never share your data with anyone.