Well, another year is in the books and I must say it was a historical one. There were a lot of firsts from a financial perspective
- Cryptocurrencies were all the rage in 2017/18, especially towards the tail end as most coins hit new highs seemingly every day. However, that bubble popped violently for most crypto’s in 2018, which included well-known Bitcoin that fell 71% this year alone. Other cryptocurrencies had staggering losses with some losing 90%+ of their value. As they say “The faster they rise, the harder they fall“. I kept clients out of the craze. Some didn’t agree at the beginning and that’s fine. In the end, they’ve all been better off. Of course, an investment some day in the future remains on the table when the time is right.
- It wasn’t soon after the crypto bubble popped the first Marijuana bubble formed in its place. As US and Canadian marijuana companies look to raise capital amid legalization, there has been a slew of IPO’s, which is a first for our country. I’m sure many will remember September/October when Tilray & Canopy Growth Partners, to name a couple, vaulted to new highs. Well, the “high” didn’t last long as right now both are 76% and 53% respectively below their all time highs. Losses like that could send an investor back to drinking pretty quickly. Don’t worry, I’m not considering a career in stand-up
- This year we witnessed a historic feat as two companies for the first time in history recorded a $1 trillion market capitalization. Apple, the iconic iPhone maker, became the first company worth $1 trillion in early August. Roughly a month later, Amazon followed suit as it too joined the club. However, neither company could maintain its value amid the market pullback that lasted into year end. So, we ended 2018 the same way we entered and that’s with no companies worth $1T+.
- We ended 2018 with the largest single point gain in Dow Jones Industrial Average history with a 1k+ gain as it gave investors a reason to shrug off any Scrooge or Grinch like post-Christmas vibes. Coincidentally, the other major indexes followed suit.
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Company News
I continue to make improvements to your MAD Wealth experience. You’ve likely noticed the emails periodically sent out with blog articles, company updates, and market news. There are a lot of behind the scene improvements that go unnoticed. These are items such as tweaks to analysis tools like our proprietary real estate analysis report. This spreadsheet and report can help a prospective investor determine if their target property is indeed a good idea and helps them make better investing decisions. Access to this report is included with our MAD Wealth Unlimited Subscription or can be purchased separately for $125(view pricing).
We are continuing to make important partnerships with key providers that help make your experience wonderful. We also have many more in the works for 2019 as we research, test, and define the needs of our clients.
For 2019 we’ve added Insurance Planning to our list of services. MAD Wealth will perform an initial and ongoing analysis of your insurance needs. These can range from disability(short & long term), life insurance, health care(Medicare, Long Term Care, Major, Cancer, Critical Care, etc..), and annuities. We’ll help you analyze and find a policy that suits your needs.
Portfolio Performance
MAD Wealth’s set of diversified portfolios performed well in a tumultuous year for equity, bond, currency, and real estate markets. The Federal Reserve continued raising interest rates, which had a negative impact on already existing debt, thus pressuring bond fund prices. Higher interest rates have in turn taken some gas out of America’s real estate recovery, while uneven, has benefited many the last 7-8 years. Despite a huge tax cut boost and new trade deals benefiting America and its trading partners, it was not enough to overcome the pullback that’s ensued after many years of rallying.
I’ll start out with info on some of our benchmarks for 2018. The benchmark S&P 500 Equity Index displayed a lot of strength during the year as it hit record new all time highs in September. However, weaker than anticipated economic growth and corporate profits took the floor out from below as the market pulled back sharply into year end, and en-route erasing all the hard earned gains from the year. Its cousin, bond and real estate markets, took some heat too.
2018 Benchmark Performance
S&P 500 Equity Index: -6.24%
S&P 500 Bond Index: -1.65%
S&P 500 REIT Index: -7.95%
S&P 500 Global Broad Market Index: -11.83%
Now our portfolios are a diversified mix of the best stock, bond, and real estate funds available. They combine our precise mix of each category to ensure you have assets that not only provide dividend and interest income, but also provide capital appreciation.
2018 MAD Wealth Portfolio Performance
Very Aggressive: -7.46%
Aggressive: -7.24%
Semi-Aggressive: -6.52%
Balanced: -5.30%
Conservative: -3.81%
As you can see there was nowhere to hide in 2018. But after many years of solid gains, it’s only expected some profits get taken off the board. For example our Very Aggressive portfolio is up over 137% the last 10 years. In other words, if you started with $100k you’d now have $237,364. That’s a solid contribution to a retirement fund. Down years such as this usually end up being small blips on your path to life-lasting wealth. I’ll release a blog post with full 1, 3, 5, & 10 year results in a few days.
It’s also why we take a long term view to your investment goals. Of course, we take the short term into consideration when applicable, but disciplined long term investing has shown to produce amazing results.
MAD Wealth would like to wish everyone a prosperous 2019!
