When will double digit interest rates return? Part 2

Mike JonesInvestment Insights


Read Part 1

Last month I quoted the following from Ed Easterling at Crestmont Research:

So, from 2016, what length of time is needed to assure that you will receive the historical long-term average return of 10.1%?

NEVER – investors from today will never achieve the long-term average return. Not in ten years, twenty years, fifty years, or the nearly ninety years that represent the most recognized long-term average return.

I followed that statement with fundamental reasons why the stock market is going to have a difficult time compounding attractive returns from current levels. As a refresher, those reasons are (1) high valuations, (2) low dividend payments and (3) earnings growth stagnation. The first two reasons are definite realities. The third is probable.

At the conclusion of my article I asked, “What then should investors do?” Trust me, I have been thinking about this often of late. It’s my job after all.

Here’s my thinking on this matter:

Diversify your securities – The investment space is huge. With trillions of dollars in stocks and bonds globally, it is probably unwise to default to a traditional 60% U S stock and 40% U S Bond portfolio. Look to build a portfolio that is spread across multiple asset classes and across international markets.

Incorporate alternatives – Alternative investments are those that are not one of the three traditional asset types (stocks, bonds and cash). This investment strategy allows an investor to harvest returns that can be non-correlative to stocks and bonds. The goal of such a strategy is to capture returns that meet your objectives while lowering overall volatility.

Invest away from securities – Real estate, private equity, oil and gas, small businesses… these are all examples of investments that require some expertise and personal involvement, but are ones that can potentially boost returns while creating even more diversification. This is NOT the path of least resistance but many a fortune has been made by “owning” something. This will be true in the future as well.

Incorporate tactical investing – Many years ago I abandoned all notions of “market timing.” If ever there was a two edged sword, market timing is one. That is not to say, however, that one should not look for trends to follow and investment areas to avoid. If ever there was a season to employ tactical asset allocation to a portfolio, I believe now is that season.

Long gone are the 1980’s and 90’s. Discipline and diligence will have to be the qualities that serve the investor going forward.

Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Mike Jones is Managing Director / Investment Group of Argent Advisors, Inc. Write to either at 500 East Reynolds Drive, Ruston, LA 71270 or call (318) 251-5800. This newsletter is available via email on a free subscription basis. You can subscribe by clicking here. Direct any questions, comments or suggestions to Byron Moore at bmoore@argentadvisors.com or to Mike Jones at mjones@argentadvisors.com.

Please remember that past performance may not be indicative 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 Argent Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter 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. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Argent Advisors, Inc.. 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.

Argent Advisors, Inc. is a registered investment adviser registered with the Securities and Exchange Commission. Argent Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. Argent Advisors, Inc does not offer tax, legal or insurance advice. If you are a Argent Advisors, Inc. client, please remember to contact Argent Advisors, Inc., 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. A copy of the Argent Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.


Argent Financial Group

Celebrating its 30th anniversary in 2020, Argent Financial Group (Argent) is a leading, independent, fiduciary wealth management firm. Responsible for more than $30 billion in client assets, Argent provides individuals, families, businesses and institutions with a broad range of wealth management services, including trust and estate administration, investment management, ESOPs, retirement plan consulting, funeral and cemetery trusts, charitable organization administration, oil and gas (mineral) management and other unique financial services. Headquartered in Ruston, Louisiana, Argent was formed in 1990 and traces its roots back to 1930.

Latest News & Resources


The 30-Year Lesson

The 30-Year Lesson

Any company that has been around for 30 years will have learned a few lessons along the way about what it takes to be successful. And if it is not just surviving after three decades, but thriving, as Argent is, then it should have accumulated a host of lessons....

The Morning View: November 17, 2020

The Morning View: November 17, 2020

Morning View - November 17, 2020 from Argent Financial on Vimeo. BY: MARSHALL BARTLETT Senior Vice President / Portfolio Manager Announced this morning, Retail Sales for October increased 0.3%, less than expected.  Strength in the month occurred in Non-store retailers...

Interested in speaking with

one of our experts?