American Express' 2019 fourth-quarter earnings, announced late last month, beat Wall Street expectations.

With the company's adjusted annual profit coming in 12% higher in 2019 than in 2018, that was good news for the company and for shareholders.

If you invested $1,000 in the financial institution 10 years ago, your investment would be worth more than $4,000 as of Feb. 18, for a total return of 301%, according to CNBC calculations. By comparison, in the same time frame, the S&P 500 had a total return of just over 275%. American Express' current share price was slightly above $129 on Monday, down more than 4% in morning trading amid growing fears of the economic effects of coronavirus.

While American Express' shares have done well over the years, past performance is no sign of future results.

CNBC: American Express' stock as of February 2020.

American Express dates to 1850, when it started as a freight shipping company. The company began introducing financial products and services and by the 1950s, Amex launched its first consumer charge card.

In 1966, it put forth a corporate card program for businesses, and in 1991, created its first loyalty program, now called Membership Rewards. The program serves to incentivize users with benefits and encourage member loyalty.

Since then, American Express has continued to reiterate its financial offerings by introducing lines of debit and credit cards as well as banking services. Today, it's one of the world's largest financial corporations with more than 63 million cardholders.

Through the years, American Express stock gone up and down.

Like many financial institutions, the company saw its stock sink around the time of the 2008 recession. By February 2009, its share price landed at just over $11.

In February 2015, the market value of American Express fell by around $8 billion within 48 hours after it announced the loss of a lucrative contract with Costco, which was set to expire in March 2016. The contract termination had shareholders worried about how much revenue Amex would lose and how it would impact their investments.

In October 2017, it was also announced that Kenneth Chenault, chairman and CEO for 17 years, would step down in February 2018 as American Express struggled to find its place in a modern market.

Despite the problems, Amex stock returned 5.4% annually under Chenault's tenure. That's close to double the 2.6% annual return of the financial sector during that period.

American Express attributed its Q4 success to the "well-balanced mix" it's been able to strike between spending and fee and lending revenues. The card issuer reported that nearly 70% of new card members in 2019 went for fee-based products, which helped to grow card fee revenue by 17% last year.

Millennials are also big fans of Amex. In January, CNBC's Jim Cramer credited young people with helping the company reach its better-than-expected quarter. "Millennials are really signing up, 50% of the new cards. That business is great," Cramer said during a "Mad Money" lightning round.

This month, Amex also announced a new reservation booking tool for Platinum and Centurion members. The feature will allow cardholders to browse, book and manage reservations all in one place using their mobile device. And eligible users can make multiple reservations per day at over 10,000 restaurants worldwide.

If you are considering getting into investing, experts, including Warren Buffett, often advise starting with index funds, which hold a basket of companies. Because index funds aren't tied to the performance of a single business, they're less risky than individual stocks, making them a safer choice for beginners.

Here's a snapshot of how the markets look now.

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If you invested $1,000 in American Express 10 years ago, here's how much you'd have now - CNBC

27th February, 2020 by Philip Staveley

This years range is +45% to -30% which is a colossal spread of 7,500 basis points. In essence it is a bit of fun with the winner earning something nice and bubbly from Liv-ex.

We are all on much firmer ground looking at the performance of the 2010s as they reach their first decade, and there will be a series of reviews this year reminding everyone of how fabulous they are. That they are fabulous on the palate has never been in dispute; but how fabulous are they now from an investment perspective?

Not only have the 2010s in Bordeaux performed poorly since release with nearly half of the Liv-ex 500s 50 constituents trading below their release price according to a brief note released recently by Liv-ex, but the first growths in particular have declined.

Right Bank first growth equivalents like Cheval Blanc and Ausone feature among the fallers (the elevation of Pavie and Angelus to Grand Cru Class A since release of their 2010s guarantees their position amongst the risers), as does La Mission Haut-Brion.

What we find very interesting is that Le Pin has outstripped all to a price rise of 95%. Why might this be? Did Pin release at a more respectable price than the others? Nope. Not at all. Like nearly everyone it released ex-chteau at a 10% hike on 2009 levels. The difference, we believe, is entirely due to the consequence of volume, and the mechanics of the market place.

The 2010s were priced en primeur in the late spring of 2011, only a month or so before the market correction. As a point of comparison, 600 cases of Le Pin 2010 had been priced at the top of the market, as against about 16,000 cases of Lafite. The question we must now explore is where they all went, and what has become of them now?

In the case of Le Pin the answer is likely to be that the 2010s went in much the same direction as the 2009s and the 2008s before them. These had long been collectors items, so irrespective of the ill that was to befall the market by the summer, it is unlikely that too much will have found their way back into the market either then or when they became physical in 2013.

This, in fact, is what happened to the price of Le Pin 2010 when they became physical, and subsequently:

What happened here is that Robert Parker upgraded from an in barrel score of 96-98 to a perfect 100 when it went into bottle, so you have the combination of tightly held supply and a healthy upgrade. So what of a wine in greater supply with a perfect score?

Here is La Mission Haut-Brion 2009:

Mission is hardly produced in prodigious quantities, making around 7,000 cases a year, but there is a huge difference between 600 and 7,500 cases in terms of where it ends up. Quite frankly, any producer making thousands of cases is more concerned with getting it off the balance sheet, than where it goes, and the same goes for the ngociants.

All this means that for most producers in Bordeaux there was no control over where the wine went, which made the market prey to the speculative element from Asia which we know had become highly significant by this time. And the consequence of this is simply that if you get caught re-selling a bottle of DRC it is woe betide as regards getting an allocation next year, for larger producers it is out of their control entirely.

This brings us back to the 2010s. How long does it take for speculators to offload excess supply? Unfortunately the wine market lacks statistical evidence to allow for an accurate answer to that question, so its pretty much guesswork. This is the price chart for Chteau Lafite 2010:

Have all the loose holders been shaken out? Lafite makes between 15-20,000 cases per annum. Thats a lot by the standards of Le Pin and even of La Mission Haut-Brion, but in seven years you would think there would not be much left in the wrong hands. The price chart suggests that by 2016 much of this selling had been done, but by our algorithmic measurements Lafite 2010 has been good value for a while, so there has clearly been an after-effect.

We await a catalyst to light the blue touch paper under wines such as this, and maybe the reviews of this great vintage will provide just such a spark.

Philip Staveley is head of research atAmphora Portfolio Management. After a career in the City running emerging markets businesses for such investment banks as Merrill Lynch and Deutsche Bank he now heads up thefine wine investmentresearch proposition with Amphora.

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Fine wine investment: Lighting the spark - The Drinks Business

The Georgia Senate has passed a bill that would allow the $78.9 billion Teachers Retirement System of Georgia to invest in alternative investments, despite criticism from some state lawmakers that the move would be too risky.

Georgia Senate Bill 294 would amend provisions relating to investments under the states public retirement systems standards law. It would change the definition of eligible large retirement system to remove the exclusion for the Teachers Retirement System. According to state law, alternative investments by an eligible large retirement system cant exceed 5% of the retirement systems assets at any time. The law defines eligible large retirement system as any state pension with more than $100 million in assets.

If the proposed bill becomes law, it would allow the system to invest, in aggregate, as much as $4 billion in a range of alternative investments, including leveraged buyout funds, mezzanine funds, workout funds, debt funds, merchant banking funds, funds of funds, and secondary funds.

However some state senators, such as Democratic Minority Leader Steve Henson, have said that now is not a good time to add the possibility of risk to the pension fund, as some economic forecasters have warned of a possible economic downturn in the near future.

I think the conservative path is to stay the course we have, Henson said, according to Capitol Beat News Service. I dont think now is the time to jump into a riskier market.

The bill is sponsored by Republican state Sen. Ellis Black, who said the pension funds investment managers could help the portfolio earn higher returns by adding alternatives to their investment strategy. Black said concerns about the bill were unfounded.

Youve got a whole spectrum of risk involved, Black said, according to Capitol Beat. A wise investor is going to have a balanced portfolio.

TRS manages the retirement accounts of 262,000 active members and pays a monthly benefit to 128,000 retired members and survivors. As of June 30, the pensions asset allocation was 52.9% in domestic equities, 23.2% in US treasuries, 17.3% in international equities, 6.1% in corporate and other bonds, and 0.5% in international obligations, corporates.

Having passed the state Senate, the bill will now be sent to the Georgia House of Representatives for consideration.

Related Stories:

Georgia Teachers Win Big in Bill Meant to Help Retirement Systems Insolvency Woes

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Alternatives Investors Say Equity Markets Have Peaked

Tags: alternatives, Bill, Ellis Black, equity, investment fund, Steve Henson, Teachers Retirement System of Georgia

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Georgia Senate Passes Bill to Allow Teachers' Pension to Invest in Alts - Chief Investment Officer

Have individual investors missed out by not having access to private equity? In weeks like these, when publicly traded stocks are getting clobbered, it might seem so.

Were about to find out the answer, courtesy of Vanguard Groups recent decision to create a private-equity fund. Though the fund initially will be available only to institutions such as college endowments and nonprofit foundations, Vanguard says it eventually will be made available to individuals as well.

Private equity, of course, refers to equity investments in companies that arent publicly traded. Because these investments usually are sizable, their holding period can be many years, and the risk of failure isnt insignificant. They typically are made by private-equity firms that pool the resources of wealthy and well-connected individuals and institutions. There usually is a very high minimum to invest in these firms, which charge hefty fees, typically 2% of assets under management and 20% of profits.

Even after taking such hefty fees, however, many PE funds have delivered outsize returns to their investors and helped to cement the reputations of many investing gurus. One that many investors are familiar with is David Swenson, who has managed Yale Universitys endowment since 1985 and been a strong proponent of alternative investments generally and private equity in particular. According to Yale, Swenson has produced a return that is unequalled among institutional investors.

Until now, about the only investment options for individuals wanting to get exposure to private equity were the stocks of those few PE firms that are publicly traded, such as KKR (ticker: KKR) and Blackstone Group (BX). Another option has been those exchange-traded funds that invest in a basket of such publicly traded PE firms, such as Invesco Global Listed Private Equity (PSP), with a 1.78% expense ratio, and ProShares Global Listed Private Equity (PEX), with a 3.13% expense ratio.

Many of the details of Vanguards new fund have yet to be made public, such as when the fund will become available, the minimum investment amount, the fees that would be charged, and how long investors would be required to tie up their assets. Vanguard declined a request to provide those details. The new fund will be run via a partnership with HarbourVest, a private-equity firm.

Here are some considerations to keep in mind if and when you are given the chance to invest in Vanguards new fund.

Fees. Ludovic Phalippou, a professor of financial economics at Oxford University, told Barrons that hes worried about the layers of fees that potentially could be charged by this new fundas many as three, in fact: From the PE funds in which HarbourVest invests, from HarbourVest itself, and by Vanguard.

With that many layers of fees, he adds, this new fund would be a nail in Vanguards purpose coffin, since the firm was founded by Jack Bogle with the goal of minimizing fees.

Does private equity beat public stock markets? The answer to this question may very well be no, says Erik Stafford, a professor of business administration at Harvard Business School. He bases his skepticism on the disappointing performance of the largest category of PE funds, so-called buyout funds, which purchase publicly traded companies and take them private.

To be sure, he says, the average PE buyout fund has outperformed the S&P 500 index. But thats an inappropriate comparison, since the typical PE buyout firm invests in companies that are in the so-called small-value category. These are stocks of companies with small market caps that trade for low ratios of price to earnings, book value, return on equity, cash flow, and so forth. Such stocks are at the opposite ends of the size and growth-value spectra from the S&P 500.

According to Stafford, the average PE buyout fund has lagged an index of small value stocks. Oxfords Phillapou said that his research has reached the same conclusion.

Take a look at the accompanying chart, courtesy of data from Nicolas Rabener, founder of the London-based firm FactorResearch. Over the past three decades, private equity has significantly outperformed the S&P 500, but it has significantly lagged a hypothetical index fund of small-cap value stocks. (For private equitys performance, Rabener relied on the Cambridge Associates U.S. Private Equity Index, which is compiled from more than 1,500 institutional-quality buyout, growth equity, private equity energy, and subordinated capital funds formed between 1986 and 2019.)

To be sure, not all researchers agree. Greg Brown, a finance professor at the University of North Carolina at Chapel Hill and director of its Frank Hawkins Kenan Institute of Private Enterprise, told Barrons that his and others research has found that, on an apples-to-apples comparison basis, PE beats public equities by an annualized margin, or alpha, of about 3%.

Though you neednt take sides in this disagreement, its very existence should give you pause. If PEs much-vaunted alpha is so dependent on methodological complexities in its measurement, then perhaps it isnt something you should be so eager to pursue.

Does private equity really have a low correlation with the stock market? Even if PEs alpha is zero, it still could play a valuable role in a diversified portfolioprovided its returns are uncorrelated with those of publicly traded equities.

In that case, a stock portfolio divided between public and private equities should produce long-term performance that is just as high as public market equities alone, but with less volatility or risk. That would enable a risk-averse investor to allocate more to equities than he or she would otherwise be comfortable with.

At first blush, as you can see from the accompanying chart, PE certainly appears to be uncorrelated with public equities. Unfortunately, appearances can be deceiving: The apparently low correlation is largely an artifact of the illiquid securities in which PE funds invest. Those funds have a lot of discretion in deciding how to value them each month or quarter, and the inevitable result, according to Rabener, is that their returns appear to be smoother over time than they really are. He says hes confident that, if there were any way to value PE funds as frequently as publicly traded firms, they would be just as volatile (if not more so).

Is there a illiquidity premium? Some argue that, according to investment theory alone, PE funds should outperform public equities because of their illiquidity. These theorists are referring to the lengthy lockup period that PE funds place on assets invested in them. Investors should receive a higher return as compensation for not having instant access to their assetsan illiquidity premium, if you will.

Or so the theory goes.

But Cliff Asness, founding principal at AQR, argues its possible that not only is there no such premium but there actually may be an illiquidity discount. His argument is that investors are willing to accept a lower return in PE because its high volatility is hidden from plain view. Publicly traded equities, in contrast, smack you in the face with their day-to-day volatility, so they are the ones deserving of the higher return.

In a recent blog post, Asness mused: What if many investors actually realize that...illiquid, very infrequently and inaccurately priced investments made them better investors as essentially it allows them to ignore such investments given low measured volatility and very modest paper drawdowns?...What if investors are simply smart enough to know that they can take on a lot more risk (true long-term risk) if its simply not shoved in their face every day (or multi-year period!)?

Professor Stafford agrees. He said that PEs illiquidity premium, which has been much ballyhooed by PEs cheerleaders, is actually zero or even negative.

The bottom line: A completely rational, unemotional investor might very well choose to invest in a portfolio of publicly traded small-cap value stocks rather than in PE. But if you are unable to live with this portfolios volatility and downside losses, and therefore are the kind of investor who ends up throwing in the towel at the bottom of bear markets, you may end up worse off than if you instead invested in a statistically inferior PE fund whose volatility is hidden and with which you can actually live through thick and thin.

So the absence of an illiquidity premium isnt an automatic reason to avoid private equity. But if thats why investors are favoring PE funds, Asness argues, they should be open-eyed about what they are doing.

Mark Hulbert is a regular contributor to Barrons. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com.

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Think Twice Before You Invest in a Private-Equity Fund - Barron's

If this stock market reversal is due exclusively to the virus, then why is United Healthcare down far more than SPX? Why is healthcare as a sector broadly not outperforming? Answer to these questions: the market is digesting a better than 50% chance of Bernie getting the nomination.

Thats DoubleLine Capital Jeffrey Gundlach explaining in an email to CNBC why he believes the stock market has taken such a bruising this week.

The S&P 500 dropped more than 6% over the course of Monday and Tuesday before mounting a slight comeback in Wednesdays trading session.

Maybe this is the dark side of momentum investing, Gundlach wrote. The market goes down in a knee jerk way on the Bernie rise, but the market going down makes Bernies polls go up on his rejection of a market based economy. Which makes the market go down another leg. Rinse and repeat.

This isnt the first time that Gundlach has warned of what a Sanders presidency could ultimately do to the stock market.

If people get more worried about Bernie Sanders and they start to price in his spending programs, then you could really start to see trouble in both bonds and stocks, which could really be on a rough ride, he said earlier this year.

At last check, the Dow Jones Industrial Average DJIA, -4.42% , S&P 500 SPX, -4.42% and Nasdaq Composite COMP, -4.61% were all in positive territory, but were well off their highs for Wednesdays session.

In the latest Real Clear Politics poll for the presidential election coming up in November, Democratic presidential candidate Bernie Sanders beats incumbent President Donald Trump by a margin of 47% to 44%.

Read more here:
Bond King says were experiencing the dark side of momentum investing and its not because of the coronavirus - MarketWatch

Space-based broadband internet for the masses is being built over at Elon Musk's SpaceX, with the initial launch of the service -- dubbed Starlink -- expected by the end of 2020. The company's forward-thinking mentality on the commercialization of the final frontier is partially responsible for the surge in interest in investing in the movement. Problem is, SpaceX isn't a publicly traded company, leaving just a few names like Virgin Galactic (NYSE:SPCE) for investors to choose from when it comes to innovation in the burgeoning space economy.

But there's another possibility: Iridium Communications (NASDAQ:IRDM), which just completed its first year operating its own broadband-speed service with global coverage. The company has yet to reach peak operational efficiency with its new satellite constellation, but solid progress is being made.

Image source: Getty Images.

When I first bought in on Iridium a few years ago, it was all on the promise of the company being able to deploy its NEXT satellite constellation, a broadband-speed communications service with 100% coverage of the globe. The company already provided services -- primarily to government organizations, and the maritime and aviation industries -- but high-speed data services were something else entirely.

Fast-forward a few years (and some 220% in share price advance), and NEXT is up and running. The service has helped Iridium reignite growth with new global Internet of Things connectivity capabilities and broadband internet for industries operating in remote locations (like aviation, maritime, mining, and government entities). A new air traffic control system based on the satellites, called Aireon, is also just getting going. With the first year of next-gen operations in the books, 18% total growth in billable subscribers led to a 10% increase in service revenues.

Service

End of 2019 Billable Subscribers

End of 2018 Billable Subscribers

% Growth

Commercial voice and data

363,000

361,000

1%

Commercial IoT

802,000

647,000

24%

Government voice and data

57,000

54,000

6%

Government IoT

78,000

59,000

32%

Data source: Iridium Communications.

For 2020, management said to expect another 6% to 8% increase in service revenue to $474 million to $483 million, and operational earnings before interest, tax, depreciation, and amortization (EBITDA) to increase 7% to 10% to $355 million to $365 million. Not too shabby.

More importantly, though, is that with the NEXT satellites now in orbit and Iridium having recently restructured its debt associated with getting the constellation in orbit, free cash flow (what's left after cash operating and capital expenses are paid for) ran at positive $80.3 million in 2019. Management expects free cash flow should increase somewhere in the 20% ballpark in 2020.

But what about that new SpaceX Starlink service coming online? Iridium CEO Matthew Desch had this to say on the last earnings call:

I would say that they're mostly focused on what I would call the commodity broadband space, trying to provide services that compete almost -- more with existing [very small aperture terminal (VSAT)] and fixed satellite services space, but even going beyond that to someone like StarLink or maybe someday Amazon Web Services, I would say that they're even going after what I would call the core fixed market, particularly consumer kind of markets that maybe are served by Hughes and ViaSat today or even by fiber and other kinds of solutions. Those are completely different markets from what Iridium is interested in or has been addressing. We've stayed away from those.

Desch said he and the rest of Iridium are rooting on the progress of Starlink and others because it's good for the space industry and complementary to the service Iridium already provides -- namely, commercial and government broadband versus consumer broadband. That should put a potential investor's mind at ease for now about future disruption. For the time being, though, Iridium Communications looks like one of the better ways to invest in the growing space economy.

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Looking to Invest in SpaceX? This Public Company Already Generates Revenue From Its Next-Gen Satellite Constellation - The Motley Fool

A number of small schools like Colby, in Maine, are hoping to improve off-campus amenities by helping to revitalize downtowns.

WATERVILLE, Maine Colby College is in an especially good place these days.

Applications to the liberal arts college are up 170 percent since 2014. An ambitious fund-raising campaign has pulled in more than $500 million over the past three years. And construction is underway on a massive campus athletic complex with an Olympic-size pool, an indoor competition center and an ice arena.

Unlike so many small colleges, were doing exceptionally well, said David A. Greene, Colbys president.

But from its perch on a serene hilltop in Waterville, a blue-collar community of roughly 16,000 about an hour outside Portland, Colby is seeking to lift the citys fortunes as well. Waterville, on a bank of the Kennebec River, has struggled to regain its footing since several mills shut down in the 1990s and early 2000s. Colby is aiming to supercharge an economic revival by remaking the hollowed-out downtown.

Colby is joining a number of smaller colleges that are taking a role in revitalizing flagging downtowns. If colleges are marketing distinctive academic programs and high-quality campus amenities to compete for increasingly discerning students, so, too, are they trying to leverage off-campus assets.

A lot of universities, especially in tertiary cities, are finding that creating a more revitalized downtown is just as important as making sure everything is tight within the four walls of the campus, said Michael Cady, the vice president of marketing for Charlestowne Hotels, a firm that specializes in managing university hotels.

Its a competitive market for students its almost a recruitment tool, Mr. Cady said. The town needs to be as vibrant and culturally interesting as the campus.

Colgate University, for example, with roughly 3,000 undergraduate students, owns a historic inn with a tavern, a bookstore and a movie theater in the Village of Hamilton, N.Y. Its efforts began in 2000 and have picked up in recent years.

Having invested about $30 million in the downtown so far, Colgate is now funding construction of affordably priced housing for university staff and other local workers, and is seeking approval for a mixed-use development that would include co-working and incubator space.

Having a vibrant village center is important for the local community, but also for visitors to the university, prospective students, current students and their families, and alumni, said Daniel DeVries, Colgates media relations director.

In Waterville, Colby College is drawing on the fund-raising campaign, cash reserves and debt financing to pump some $82 million into the redevelopment of five major projects on Main Street, about two miles from campus. The first to open was a 200-bed residential hall for students and faculty in 2018, Colbys only off-campus housing.

Across the street, it spent more than $5 million renovating a long-vacant bank building, then dangled low rents to woo an outlet of a Portland-based pizza pub and a software company looking to train local workers. An artisanal chocolate shop with a cafe is on the way.

And nearby, the college is building a 53-room hotel and restaurant, a visual and performing arts center, and an arts collaborative with studio spaces. All of the buildings will stay on the city tax rolls.

Colbys fate is intertwined with the citys, Mr. Greene said. We recruit people from all over the world. If they dont want to move here, it will have a major detrimental impact.

Mr. Greene is positioning Colby to be more of an anchor and less of an island.

Previous investments in the city were sporadic and modest, he said, and he detected some resentment toward the school when he arrived in 2014 from the University of Chicago, where he also worked on community revitalization. He was especially troubled to hear local references to Colby as the palace.

I thought that was the most damning metaphor, Mr. Greene said. Its in our best interests to invest in downtown, yes, but its also a moral obligation.

The new residential hall, funded in part by the Harold Alfond Foundation of Maine, is intended to put more feet on downtown streets and strengthen town-gown relations. Students must commit to community volunteerism as a condition of living there. And a 3,800-square-foot meeting space on the ground floor is open for use by community groups and city commissions.

All of the appliances for the buildings apartments were bought from a local company, as were the windows, Mr. Greene said.

The overall downtown revitalization strategy is the result of many months of planning sessions involving college officials and local leaders. That united front among city stakeholders, along with the substantial institutional investment, is attracting additional investment, said Christopher Flagg, the president of North River, a real estate investment, development and management company in New York.

North River owns the Hathaway Creative Center, part of the former Lockwood Mill Complex, which was converted to loft-style apartments and commercial space at the foot of Main Street. The buildings tenants now include MaineGeneral Health, a brewery, an antiques mall and a co-working space.

Last year, North River bought two vacant sister buildings and plans to invest $20 million in their redevelopment over the next two years, Mr. Flagg said.

Local investors are also stepping up. William Mitchell, an insurance agency owner and a nephew of former Senator George J. Mitchell, a Maine Democrat, recently opened an events center downtown and has acquired several buildings in the area. Previous revitalization efforts were false starts, he said, but Mr. Greenes plan is taking it to a whole new level.

The activity has prompted a handful of naysayers to complain that Colby is taking over downtown, Mr. Mitchell said. But he brushes off such complaints with a simple question: Who other than Colby could have taken the lead on such a major initiative?

Mayor Nick Isgro said that Colbys investments were welcome, but that the focus on the arts and restaurants should not overshadow the citys need for better-paying, middle-class jobs. Many residents are underemployed and struggle financially, he said.

The tightrope Ive tried to walk is to make sure the city is taking advantage of opportunities, but that our longtime residents still have a voice at the table, Mr. Isgro said. Its not revitalization if we leave people behind.

Other indicators are encouraging. Waterville is growing, even as the statewide population has been stagnant for years, said Garvan Donegan, the director of planning and economic development at the Central Maine Growth Council. The citys population grew 6 percent from 2010 to 2017.

That may sound nominal, Mr. Donegan said, but it truly is not.

The housing market is also healthy. The average number of days a home sits on the market is around 30, down from three or four months several years ago, said Don Plourde, the owner of Coldwell Banker Plourde Real Estate. The median price is around $160,000, which buys an older three-bedroom ranch. But the city needs new housing if it is to attract more residents, he said.

Andrew Volk, a 2005 Colby graduate, said he was optimistic about Watervilles prospects. He and his wife, Briana, who own the Hunt + Alpine Club, a popular cocktail bar in Portland, will open a restaurant called Vernas All Day on the ground floor of Colbys downtown residential hall by the end of the year.

The Volks were courted by Colbys vice president of planning, but it wasnt a hard sell.

Wed always kind of talked about what the next step is, and I liked that Colby would be our landlord, Mr. Volk said.

The concept for Vernas is fairly simple a casual American chophouse with classic cocktails. Mr. Volk said he and his wife were mindful that were creating a restaurant for Waterville, not for Portland.

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Colleges Invest So Whats the Town Like? Gets an Upbeat Answer - The New York Times

Ultimate isnt a term to toss around lightly. But in this case it fits. I believe the investment portfolio Im about to describe is the absolute best way for most investors to achieve long-term growth in the stock markets and Ive believed that since the 1990s.

My view is based on the best academic research I know of as well as my own experience working with thousands of investors over the past half century. Ive been recommending this combination for more than 20 years, and it is the basis of the majority of my own investments.

Ive got loads of evidence to back up my confidence. The strategy itself isnt new, and as I do every year, I am updating the results to reflect one more year of data.

In a nutshell, the ultimate portfolio starts with the S&P 500 Index SPX, -4.42%, then adds small and equal portions of nine other carefully selected U.S. and international asset classes, each one of which is an excellent long-term diversification vehicle.

The result is a low-cost equity portfolio with massive diversification that will take advantage of market opportunities wherever they are, and at about the same risk as that of the S&P 500.

I like to roll this out in steps rather than all at once, so you can see how it goes together. Heres a table that might make it easier to follow along.

The base ingredient in this portfolio is the S&P 500 Index, which is a pretty decent investment all by itself. For the past 50 calendar years, from 1970 through 2019, the S&P 500 compounded at 10.6%. An initial investment of $100,000 would have grown to nearly $15.4 million.

For the sake of our discussion, think of the S&P 500 index as Portfolio 1. Its not bad, and you could do much worse. But you can do a whole lot better, too.

You take the first small step by adding large-cap value stocks, ones that are regarded as relatively underpriced (hence the term value).

(The links above, and others below, are to specific articles from 2015 that focus on each asset class.)

By moving only 10% of the portfolio from the S&P 500 into large-cap value stocks (thus leaving the other 90% in the S&P 500), you create what I call Portfolio 2.

Although only 10% of the portfolio has changed, the 50-year return improves enough to be worth noticing. Assuming annual rebalancing (an assumption that applies throughout this discussion), the 10.8% compound return of Portfolio 2 was enough to turn $100,000 into $16.9 million.

In dollars, this simple step adds more than 15 times your entire original investment of $100,000 the result of changing only one-tenth of the portfolio. If that isnt enough to get your attention, I dont know what would it would take.

In the next step we build Portfolio 3 by putting another 10% into U.S. small-cap blend stocks, decreasing the weight of the S&P 500 to 80%. Small-cap stocks, both in the U.S. and internationally, have a long history of higher returns than the stocks of larger companies.

This change boosts the 50-year compound return of the portfolio to 11%; an initial $100,000 investment would have grown to nearly $18.1 million an increase of $2.7 million from Portfolio 1.

Taking still another small step, we add 10% in U.S. small-cap value stocks, reducing the weight of the S&P 500 to 70%.

Small-cap value stocks historically have been the most productive of all major U.S. asset classes, and they boost the compound return of Portfolio 4 to 11.3%, enough to turn that initial $100,000 investment into $21.6 million.

With more than two-thirds of the portfolio still in the S&P 500, that seems like a marvelous result.

In the next step, creating Portfolio 5, we invest another 10% of the portfolio in U.S. REITs funds. Result: a compound return of 11.4% and an ending portfolio value of $22.3 million.

Lets pause for a moment to recap.

First, Portfolio 5s increase in compound return over Portfolio 4 was small, but over 50 years that tiny step produced an additional $708,000. This is a lesson I hope you wont ever forget: Small differences in return, given enough time, can add up to big differences in dollars.

Second, Portfolio 5, with its substantially higher return, had essentially the same risk level as the S&P 500 Index. Higher returns, without adding risk, has to be a winning combination.

Some investors may wish to stop here and not invest in international stocks. If thats the limit of your comfort level, thats fine. The combination of asset classes in Portfolio 5 is excellent, and I expect it will do well in the future.

But I believe any portfolio worth being described as ultimate must venture beyond the U.S. borders. And the rewards have definitely been there.

Accordingly, in building the ultimate equity portfolio I add four important international asset classes: international large-cap blend stocks, international large-cap value stocks, international small-cap blend stocks and international small-cap value stocks.

Giving each of these a 10% weight reduces the influence of the S&P 500 to 20%. If that sounds frightening, think about this: Over 50 years, the changes I just described (Portfolio 6) increased the compound return to 12%, and the portfolio value to $29.4 million.

That is an increase of 91% over the S&P 500 by itself. And Portfolio 6 produced that result with only a slight increase in statistical risk.

The final step, which results in Portfolio 7, is to add 10% in emerging markets stocks, representing countries with expanding economies and prospects for rapid growth. While this asset class has been a laggard lately, in eight of the most recent 20 calendar years, it was either the top-performing equity asset class or No. 2.

This additional slice of emerging markets stocks boosts the compound return to 12.6% and brings the final portfolio value to a whopping $37 million nearly 2.5 times that of the S&P 500 alone.

Thats the Ultimate Buy and Hold Portfolio, which over nearly half a century obviously stood the test of time very well.

As you will see, Table 1 includes another column, labeled Portfolio 8. This is my suggested All-Value Portfolio, which includes only five asset classes instead of the 10 in Portfolio 7. Portfolio 8 starts with Portfolio 7, then eliminates REITs and the blend asset classes. The 50-year performance of Portfolio 8 is slightly less than that of Portfolio 7, but still stunning at 12.6% in compound return and a final value of just under $37.1 million. Portfolios 7 and 8 are among the results of my long-standing commitment to find higher expected rates of return with little or no additional risk.

Investors who build either of these portfolios using low-cost index funds or ETFs dont have to rely on anybodys ability to choose stocks. Nor must they make economic or market predictions.

Obviously, all these performance statistics are based on the past. Will we see returns like these in the future? Nobody knows.

However, every academic Im familiar with expects that, over the long term, stocks will continue to outperform bonds, small-cap stocks will continue to outperform large-cap stocks, and value stocks will continue to outperform growth stocks.

Depending on your need for return and your risk tolerance, Portfolios 7 and 8 are the best ways I know to put those insights to work for you.

Its easier to describe this strategy than to implement it in real life. Youll get an excellent start with this article, in which my friend and colleague Chris Pedersen identifies the best-in-class exchange-traded funds for all these building blocks.

Theres much more to say on this whole topic, and I hope youll check out my podcast 10 more things you need to know about the Ultimate Buy and Hold Strategy.

Richard Buck contributed to this article.

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This is the best way to achieve long-term growth in your stock investments - MarketWatch

German-listed companies invest 11 times more in low-carbon investments such as electric vehicles, renewable energy and smart energy grids than UK firms. Photograph: Alamy

British companies are lagging far behind their European neighbours in low-carbon investment after contributing only 3% of the continents 124bn (104.2bn) green spending last year.

A report has revealed that German-listed companies invested 11 times more in low-carbon investments such as electric vehicles, renewable energy and smart energy grids than UK firms.

London-listed companies spent 4bn on green research and technologies compared with 44.4bn from German groups, including the carmaker Volkswagen, which invested more than a third of Europes total low-carbon spending in 2019.

The report, from the climate disclosure organisation CDP, said Germany, Spain and Italy topped the company league table for low-carbon investment last year while the UK finished sixth, below France and Denmark.

The report, which was co-authored by the global management consulting firm Oliver Wyman, reflected well on countries that are home to major manufacturers and utilities that have made heavy investments in electric vehicles and renewable energy projects in the last year.

By contrast, UK companies did not fare as well in the investment rankings because much of the countrys green infrastructure spending is outsourced to foreign companies, including Spains Iberdrola, the owner of Scottish Power, and the Danish wind power giant rsted.

The report warned that despite the 124bn investment in green solutions across the continent, low-carbon spending will need to double if Europe hopes to meet its climate targets.

On average, companies included in the report dedicated about 12% of their annual spending to low-carbon technologies but this will need to rise to 25% to help create a carbon-neutral Europe.

UK and EU leaders have agreed to be climate neutral, or net zero, by 2050 in a bid to keep global temperatures from climbing to levels that could lead to catastrophic climate chaos.

Steven Tebbe, the managing director of CDP in Europe, said achieving this goal means that Europes economy needs to cut its emissions at the rate of nearly 8%, which requires a fundamental transformation of our economic business model.

He said: The investment decisions taken by European companies and their owners will make or break whether we are successful and they need to double down.

The report found that almost 900 listed European companies invested a total of 59bn in new low-carbon capital investments and 65bn in research and development last year.

The biggest areas of new investment were in research and development of electric vehicle technologies, which reached 43bn across Europe, and capital investment in renewable energy, which reached 16bn. Investment in energy grid infrastructure and smart energy technology climbed to 15bn and 8bn respectively.

Across many types of investment, the business case for transitioning businesses on to a low-carbon pathway is clear and the opportunities vast, Tebbe said.

The CDP estimates that the potential value of Europes new low-carbon business opportunities could reach 1.22tn more than six times the 192bn of green investment required to realise this financial benefit.

But overall current investment levels are still short of putting European firms on track for net zero emissions, he said.

For industries where decarbonisation is more challenging, there is a serious need for financial markets and policymakers to create better conditions for low-carbon investment and deliver stronger incentives to drive investment into breakthrough technologies, where capital expenditure is often high and returns long-term.

Read more:
UK lags behind in 124bn European low-carbon investment table - The Guardian

The Climate Crisis and Peak oil demand are making expensive projects like Alberta's Teck Frontier look like bad investments.

Everybody in Canada is pointing fingers about Teck Resources cancelling it's giant $20 billion open pit tar sands mine. Alberta's Premier Kenney blames 'Urban-green-left zealots' and says it will "further weaken national unity. Temporary leader of the opposition Scheer blames the Prime Minister, saying "Justin Trudeaus inaction has emboldened radical activists" and Make no mistake: Justin Trudeau killed Teck Frontier.

But the fact is that it made no economic sense in a world awash in cheap oil; Teck needed $95 a barrel to break even and Canadian oil is selling for $38. Permian Basin oil sells for $50. And who was going to lend Teck $20 billion, when the people who fund these projects are pulling out of the market?

Many have joined Climate Action 100+, "an investor initiative launched in 2017 to ensure the worlds largest corporate greenhouse gas emitters take necessary action on climate change."

And now, JPMorgan Chase is warning that climate change is a threat to "human life as we know it." According to Bloomberg,

The response to climate change should be motivated not only by central estimates of outcomes but also by the likelihood of extreme events, bank economists David Mackie and Jessica Murray wrote in a Jan. 14 report to clients. We cannot rule out catastrophic outcomes where human life as we know it is threatened.

This is from a company that has invested $75 billion in fracking and Arctic oil, and right now is demolishing a perfectly good, recently renovated building, with an upfront carbon load in replacing the square footage of about 63,971 tonnes of CO2. Even they are now talking climate crisis.

According to the JP Morgan report leaked to the Guardian, "the climate crisis will impact the world economy, human health, water stress, migration and the survival of other species on Earth."

Drawing on extensive academic literature and forecasts by the International Monetary Fund and the UN Intergovernmental Panel on Climate Change (IPCC), the paper notes that global heating is on course to hit 3.5C above pre-industrial levels by the end of the century... The authors say policymakers need to change direction because a business-as-usual climate policy would likely push the earth to a place that we havent seen for many millions of years, with outcomes that might be impossible to reverse.

Although precise predictions are not possible, it is clear that the Earth is on an unsustainable trajectory. Something will have to change at some point if the human race is going to survive.

JP Morgan is backtracking a bit, telling the BBC that the report was wholly independent from the company as a whole, and not a commentary on it, but it is all part of a trend.

Take that Mad Money guy, Jim Cramer, who is saying "fossil fuels are done." He doesn't mention climate change, but blames investor attitudes. Quoted by Nick Cunningham in Oilprice.com:

I am sorry, but you cannot blame Justin Trudeau for that.

The Climate Crisis and Peak oil demand are making expensive projects like Alberta's Teck Frontier look like bad investments.

See the article here:
Oil investments are the new tobacco - Treehugger