Tulipmania and Cash Flow Confidence
According to Wikipedia, the great tulip craze – tulipmania – of the 17th century is often considered the first speculative “bubble” of record. The market for tulips took on a life of its own; often considered detached from all fundamentals, the price continued to rise in astronomical fashion before crashing rather abruptly.
Now, “tulipmania” is often used as a term to describe remarkable market movements that seemingly occur without reason. It has become a more prevalent phrase uttered lately as many market analysts seek to describe speculations such as Bitcoin. Although the concept behind tulipmania is an important one studied in economic theory, and the behavioral finance behind it has many interesting and complex applications for studying the stock market, we seek to provide a more simple conclusion.
As you can likely guess, our conclusion focuses on one of the fundamental principles that we have at Collins Investment Group – cash flow! We are not necessarily expecting a revival of tulipmania in the stock market, but many people have expressed concern with the constant upward movement of the market over the last several years and even more so in the last year. We believe that maintaining a focus around cash flow helps keep our analysis grounded in reality and will help us avoid the wild swings of any perceived “tulipmania”. We wonder, did the Dutch ever ask themselves what kind of cash flow they were getting from the purchase of a tulip? Well, this is a question we ask ourselves, with every investment.
Undoubtedly, the market will always see swings up and down with varying cycles and durations, but with cash flow analysis and proper asset allocation, we seek to grow your wealth for the long term. Oh, and as far as we know, tulips never paid an owner any dividends or interest.
Client Account Profile Summary Mailing
As your financial advisor, it is our job to ensure that the information we use to provide investment advice and make investment decisions on your behalf, is as accurate as possible. In that spirit, we have taken a snapshot of all of the retirement accounts in our care and have created an account profile summary for each client household.
In your profile, you will be provided an overview for each of your retirement accounts detailing your account purpose, time horizon, liquidity needs, and your investment objective. There will also be a graphic depiction of your account’s asset allocation versus the benchmark allocation for your specific investment objective.
Your account profile summary will be mailed to you in mid January 2018. When you receive it, we strongly encourage you to take a close look at it to determine whether you believe the information to be accurate. If there is anything that you are unsure about or if there are items that you believe should be updated, please give us a call so we can answer your questions or set up a time to have an in-depth review of your portfolio.
2017 Toys for Tots Toy Drive
Thank you to all of our clients, friends and family for yet another amazing turnout for our annual Toys for Tots toy drive. It was great to chat over holiday refreshments with all who attended.
Every year, this event has continued to grow and we couldn’t be any happier or more impressed with the enormous generosity that our clients and associates exhibit. It’s times like this that make us so grateful to have relationships with such great people.