Balance in Investing, Balance in Life

Bunzai tree in water

By Jeff Headrick

 November, 2018


Do you ever think about all the balance that life requires? Our tires need to be balanced. The scales of justice need to be balanced. We need to eat a balanced diet. Sometimes I feel that all the balance needed in life is a little, well, exhausting. Do you ever feel like that?

This week’s post is primarily a stock market update. Every 90 days we try to get hard-core at Inspire and ratchet up our research on what the global markets are doing. This knowledge allows us to have a much greater breadth of knowledge, and much more balanced thinking so that we can advise our clients.

In investing, as in life, balance is a requirement.

In addition to the important items above let’s not forget that we need a balanced portfolio of stocks and bonds to get us through certain tough times ahead. We also need this balance to get us through good times.

Everyone thinks that winter is the best time to grow roots. To think and contemplate and make New Year’s resolutions. And maybe that’s true. But I believe that fall is also a good time to not only to look back at what the year has brought forth, but to look ahead for good things to come.

I hope our research benefits you. More than that, I pray that you are inspired to have balance not only in investing, but in all the other areas of your life as well.

Quarterly Stock Market Update

We would like to revise our last update. The S&P 500 Index was incorrectly listed as +0.6 through June in the last stock market update. The correct number was +2.6%.

Our quarterly stock market update encapsulates the stock market over the previous three quarters, January 1, 2018 through September 31, 2018.

The market sprang to life in the 3rd quarter. The S&P 500 Index rose to +10.6% through September of 2018. Bloomberg Barclays US Aggregate Bond Index was still lagging at

-1.6% through the same time frame. See the State Street Chart Global Advisors SPDR® ETFs Chart Pack for reference. We have found this guide to be a tremendous resource regarding past stock market performance as a whole.


The Russell 2000 Small Cap Index was up +11.5%.


Worthy of note:

  • Asset Class Performance — US equities outshined the rest of the world year to date, while high yield outperformed investment grade in the fixed income market.
  • Treasury Positions: Traders have never been more bearish on long-and-intermediate term Treasuries than ever before, driven by ballooning budget deficit and tighter monetary policy.
  • Sector Trends — Analysts are bullish on Energy, Health Care and Materials, but expect the least upside potential in Health Care.
  • Growth vs. Value — As the outperformance of growth over value is approaching the level seen in 2000, growth valuations appear stretched relative to value.
  • Cross-Asset Volatility — All asset classes, except high yield bonds, saw higher implied volatility compared to the beginning of this year.

Quarterly Diversification Update 

If everything always moved in the same direction at the same speed, there would be no need for diversification. However, this is not the case. So, every quarter we stop an examine how several individual asset classes have performed.

We recommend all of our clients and prospective clients visit our stock market update periodically to gain perspective on the global markets. To accompany this update please also see the Vanguard ETF Strategic Model Portfolios.

Source: Vanguard ETF strategic model portfolios – CRSP

Please note the following observations:

Notice in the Vanguard models that the Vanguard US Growth ETF (VUG) finished the quarter +15.50%. Contrasting that considerably was the Vanguard FTSE Emerging Markets (VWO) that was down -8.91%. Even in a strong quarter for US stocks, the rest of the world wasn’t feeling so spry.

The Vanguard fixed-income basket was lethargic as it has been for some time. The top bond performer was the Vanguard Total International Bond (BNDX) which was up +1.07%. The worst performer in fixed-income was the Vanguard Long-Term Bond which was down -5.47% for the year thus far.

At IFP, we believe these models are well suited for investors who like to diversify in stocks as well as bonds. If you are not a fan of Vanguard and passive investing, you may want to look at our Russell Investments or our Betashield portfolios which offer a slightly more active approach. We can be reached at (910) 448-1450, or you can email Jeff Headrick at with any questions you may have.

About the Author

Jeff Headrick is a financial planner with Inspire Financial Planning. When Jeff was still in his teens his father died unexpectedly. While his father was a hard worker and a good provider, he did not have the best financial plan in place when he died. This personal experience, coupled with being inspired by Sir John Templeton, Warren Buffett, Dave Ramsey, and the laws of compound interest, prompted Jeff to enter the financial services industry in 1999. He has been helping people with their financial planning ever since.

Jeff lives in Wilmington, NC with his wife and two children. He spends most of his spare time just across the Intracoastal Waterway in Wrightsville Beach, enjoying the beauty of the NC Coast.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. The information presented does not constitute financial, legal or tax advice and should be used for informational purposes only. Since individual circumstances vary, you should consult your legal, tax, or financial advisors for specific information.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification does not guarantee profit nor is it guaranteed to protect assets. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. You cannot invest directly in an index. Consult your financial professional before making any investment decision.

Investment Advisory Services offered through AlphaStar Capital Management, LLC a SEC Registered Investment Adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Consult your financial professional before making any investment decision. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Inspire Financial Planning and not necessarily those of AlphaStar Capital Management, LLC, and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.