Millbrook Advisors, LLC

Millbrook Advisors, LLC is a fee-only financial planning firm, dedicated to developing and implementing high quality plans for individuals and families seeking financial independence. Contact us for a free initial consultation.	Financial planning tip for the day from Shakespeare!
Complete a short self survey to determine your financial risk tolerance, a critical piece of a thorough financial plan.	The chart below presents key trends in the US stock market for the last 40 years: The blue line is the S&P 500 index in log scale The violet line is the composite earnings of the S&P500 in log scale The shaded bars are the official recessions during the period The yellow X-factor line is the difference between the actual S&P earnings yield and the S&P earnings yield estimated by a regression on the yield on AAA corporates and the inflation rate. While the random walk theory is a powerful one, we at Millbrook Advisors nevertheless find the X-factor helpful. When it goes strongly negative, the market seems headed for trouble. For the quarter ended September 30, 2009 the X-factor stayed in negative territory. Both interest rates and inflation eased and top-down earnings estimates have been increased to a run rate of $44 next year. Offsetting these positives has been a rapid increase in price.
Recent financial news that we, with our contrarian bent, found worthy of note: Thrifty Consumers? The American consumer continues to surprise. The shop-til-you-drop mentality is seemingly banished in favor of aggressive savings. This is terrific news in one way, as the US must deleverage in order to stabilize itself. Of course consumer facing companies are stuck in hold while this plays out. One worry: is this also demographics as the boomers age? If so, the lost decade of Japan may be in our future. Super Contrarian. In the post-March rally, most have looked askance at the over-leveraged US consumer and the weakened and increasingly regulated US financials. But as of June 30, Berkshire Hathaway's stock portolio was 71% concentrated in these two sectors! Savings and productivity Big surprises in this crisis so far have been the consumer's about face on savings and continued gains in productivity by US firms. The May savings amount was the largest in recorded history! Who wins in this scenario? Think companies that 1) do not depend on the US consumer and 2) benefit from a weak dollar - IBM, DE, PBR, etc. Worried about the recession. See which portfolio strategy won the 1929 Crash Test. Angels on the head of a pin. Despite media fascination with the topic, the number of actually wealthy people remains suprisingly small - just over 1%. Click here for a more in-depth discussion of the wealthy and their odd approach to asset allocation.