Are you scared of flying? Even if you’re a seasoned traveler and airplane turbulence never fazes you, there are certain flights that would get your attention. If the stock market behavior in October was an airplane flight you undoubtedly survived a violent voyage. It would make the month of November seem like the smoothest flight ever, although anyone in their right mind didn’t trust in a safe landing until the wheels actually touched the runway.

After October brought triple-digit moves for the Dow Jones in 16 of the 23 trading sessions, we only experienced one such day in the entire month of November. Even though the Fed announced the end of its bond-buying program, the markets yawned and continued to stretch out to new highs. Small caps were also on a tear for about six straight weeks until literally the last trading day of November and they ended up sputtering in for a negative month.

Another developing story that most sectors of the market have shrugged off is the huge plunge in oil prices. The largest monthly percentage drop in West Texas Intermediate (WTI) crude oil occurred in November. Trading lower than $65 per barrel, crude oil has not seen this long of a losing streak (five straight months down) since the sky was falling back in 2008. We’ll touch more on this in our closing section but prices could fall even into the $45-$50 range which would obviously cause continued mayhem for energy and oil stocks.

Here’s the current summary of the MPG Core Tactical 60/40 portfolio mix, which is updated as of this writing (December 1, 2014).

Click here to compare our portfolio against the benchmark.

What adjustments did we make?

The following moves were made during the month of November:


As a firm we have always taken pride in the fact that we give back not only monetarily but more importantly with our time and energy. We prefer to roll our sleeves up and get our hands dirty rather than simply writing a check and walking away. Last year we decided to take our game to a new level – we created a team of individuals to raise funds and awareness for charities and compete in Ironman Arizona (2.4 mile swim, 112 mile bike ride and then a 26.2 mile marathon run – that is 140.6 miles, all in one day!). Sure, there are plenty of financial firms that support some very impressive foundations but how many put their time, money and actual bodies on the line?


Our journey began the weekend of November 17, 2013 as Team My Portfolio Guide (Team MPG) gathered in Tempe, AZ. We volunteered at an aid station helping athletes as they completed the biking portion of their 140.6 mile race. After that day each member of Team MPG began training and raising funds for a charity of their choice. The amount of hours spent in training are enormous but what carries even more of an impact is the story behind each athlete and the impact that these charities have made in both their individual and family’s lives!

After our team completes Ironman Arizona on November 16th we will be presenting the following charities with the funds we have raised to help them with their mission statements:

camp hopeCamp Hope – One of our team members lost his sister in a tragic car accident in 2009. His 6 year-old niece attended this camp and this amazing group allowed her to realize she wasn’t alone as she grieved the loss of her mother. The camp focuses on children, ages 6 – 17, who have experienced the loss of a significant loved one.

Cancer SocietyAmerican Cancer Society – After competing at the highest levels in college one of our members found himself faced with questions regarding his own health and future. Sitting in a cancer center and fighting back tears as he looked into the eyes of his family he realized he wanted to make a difference. This charity hits home for us as well since we’ve lost several clients to cancer.

Prader-williPrader-Willi Syndrome Association – This team member’s 14 year-old niece battles this disease every day of her life. Imagine your body always feeling as though it was starving even if you had just eaten! This association is looking for ways to “Stop The Hunger” and advance research in this chromosome disorder.

pheoparaPheoParaTroopers Foundation – Over the last several years this team member’s entire family has felt the impact of a genetic condition that causes tumors to aggressively grow. His brother and sister have both been diagnosed with this condition and have had numerous surgeries and procedures. This group supports in the research and raising awareness for this condition.

CAFChallenged Athletes Foundation – triathlons are often viewed as a ‘selfish sport’, often associated with a mindset of me, myself and I! This team member is supporting a group that allows people with physical disabilities to pursue an active lifestyle through physical fitness and competitive athletics.

red crossThe American Red Cross – This team member has supported the Red Cross efforts for years. This amazing group not only offers domestic relief but also focuses on five other areas: service for the needy, support for the military and their families, collection and distribution of blood products, educational programs and international relief/development programs.

HoneybonesHoneybones – Imagine being an active 33 year-old and facing a battle with cancer and being told you need hip replacement surgery? This team member brings an international element to our team as he is from England and recently completed Ironman Sweden! He created and helps lead this foundation that focuses on joint and bone related issues.

NationalFallenFirefightersNational Fallen Firefighters Foundation – Our team member supporting this foundation already had a full plate with becoming a brand new father along with balancing a demanding schedule of being a firefighter for the city of Huntington Beach and his wife being an emergency room nurse. He has seen firsthand what it’s like to lose a co-worker and friend in the line of duty so supporting a foundation like this was a natural calling.

AdamBrownAdam Brown Legacy Fund – This team member is now a policeman in Orange County but prior to his career in law enforcement he was a US Navy SEAL. For those of you that don’t know the story of Adam Brown, he was a member of the elite SEAL Team Six, the counterterrorism unit that killed Osama bin Laden. The Adam Brown Legacy Fund not only supports fallen Navy SEALs but other charities as well.

“Let us not be satisfied with just giving money.  Money is not enough, money can be got, but they need your hearts to love them.  So, spread your love everywhere you go.”  - Mother Teresa

Our fundraising efforts as a team continue up until this Saturday (11/15/2014) as we will be in the water waiting for the shotgun start at 7:00 am in Tempe Town Lake the next morning. We have each created an online website that allows anyone interested to make a secure tax-deductible donation to each athletes charity.

az ironman fbWhile race day is quickly approaching the work and efforts of Team MPG will continue to move forward and make a difference. As a company we support a culture of hard work and determination that are required to not only finish but succeed in an event like an Ironman. If you’re interested in learning more about Team My Portfolio Guide, making a donation, or about any one of the specific charities we support, please contact us via email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

“Giving is the highest expression of potency. In the very act of giving, I experience my strength, my wealth, my power. This experience of heightened vitality and potency fills me with joy. I experience myself as overflowing, spending, alive, hence as joyous. Giving is more joyous than receiving, not because it is a deprivation, but because in the act of giving lies the expression of my aliveness.” ~ Erich Fromm


If you’ve read some of our previous articles about what Mr. Market thinks about with regard to what month it is, you’ll know that he could care less! The market has no idea (or interest) whether it’s in November or March. Unfortunately, we are all inclined to pay attention to the calendar because those that run our 24 hour media/news cycle get paid to make such an imprint on your brain.


October is a bad month for the stock market, right?


Again, we’re trained to think so. Sure, October has had some dates to remember… The month is famous for some market crashes like the “The Panic of 1907”, “Black Tuesday” (which kicked off the 1929 crash), and “Black Monday”, October 19, 1987, when the Dow Jones dropped 22% in just one day.

Ironically enough, most bad Octobers have been due to issues that came from September. Two of the three above listed crashes were delayed reactions from catalysts that kicked off in September; which historically actually brings more down markets than does October.

All that being said, we had a wild October with some long lost volatility! After the S&P 500 peaked on September 18th, it was all downhill from there until October 15th. The last two weeks of the month were the strongest since July of 2009. For those with short-term memories, that was right after the sky had fallen and nobody trusted any “bear market rallies”.

This time “it’s different” in that we haven’t seen a meaningful correction in years. The S&P 500 bounced back 7% in two weeks and in case you’re wondering…we’re once again bumping up against “overbought” conditions. This is the type of market that can absolutely make you insane. (more on this thought later…

Here’s the current summary of the MPG Core Tactical 60/40 portfolio mix, which is updated as of this writing (November 3, 2014).

Click here to compare our portfolio against the benchmark.

What adjustments did we make?

The following moves were made during the month of October:



On countless past occasions the stock market fools not only the average emotionally driven investor but also the seasoned professional. It's happening again in an asset class that has fooled everyone; not just this year but for decades!


Investing in real estate may not seem like something you need to do within your standard “stock and bond” portfolio. Some may argue that your house is enough exposure to real estate and for most individuals it’s their largest investment so it should suffice. Your home is actually considered a “consumption good” instead of a pure investment. Although it’s likely to appreciate over time you will not receive income from it, it most likely has a mortgage attached to it, and if you need to sell 10% of it tomorrow you’re out of luck. Additionally there are many areas within real estate aside from what’s happening on your residential street. Commercial real estate, for example, makes up about 13% of the U.S. economy.

In 2013 almost every expert pounded the table and made intelligent sounding comments calling for investors to reduce exposure to REITs. These words of caution came after it was first announced the Fed would slow down its bond-buying program (Quantitative Easing). Conventional wisdom tells us that when interest rates rise REITs (and other asset classes like Bonds) won’t perform well. Unfortunately most of the comments came after the fact and REIT investors were hit hard in May of 2013. Those who listened to the stale news proceeded to sell their REITs as that “wasn’t the place to be”.

Even die-hard passive investment pros like Larry Swedroe, who is the director of research at Buckingham Asset Management, sold REITs in 2013. Why did this action grab our attention? Mr. Swedroe makes some of the most convincing arguments for passive investing and the use of indexes. If you’re a proponent of Modern Portfolio Theory and aim to stay true to asset allocation, you ideally trim the asset classes that have risen the most and reallocate towards the ones that have been hit. Is that what all the experts like Swedroe did? Nope…not this time! He (they) panicked and got fooled just like the rest of the investment herd.

The challenge, but ironically perhaps the true appeal, to owning REITs in a portfolio is that they give stock market-like returns but don’t always do so in perfect correlation. In other words, REITs provide you with some unique characteristics that earn them the right to be considered as a different asset class thereby enhancing your diversification. People often inherently confuse REITs as being highly correlated to the residential real estate market in their immediate area. Not only can you get attractive returns in a variety of different geographies but you’re also gaining exposure to areas of real estate that normally have barriers to entry for the average investor. Here’s an excellent resource to get you familiar with REITs. Click here and watch the video and then bounce back here to finish this article.

Buying REITs is not just about diversifying your portfolio. We advocate using them due to how well they perform! Most investors don’t realize this but over 30 years they have beat the stock market and they’re doing it again this year. The core investment we use to track REITs is the Vanguard REIT ETF (VNQ) and it’s not only giving us 3.64% in dividend yields but as of this writing it’s up +20.18% YTD compared to the S&P 500 which is currently up +7.04%.

Speaking of performance, how might that look like over time?


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