Founder and Publisher
Austin leads SMI, the newsletter business he founded in 1990. With more than 38 years of experience in the investment business, Austin provides overall direction to the organization while continuing to author many articles for the SMI newsletter and web site. Before founding SMI, Austin started and ran his own investment management firm, which ranked in the top 5% of all investment advisers in the U.S. during its first five years of operations.
He is the author of the Sound Mind Investing Handbook, A Step-By-Step Guide to Managing Your Money from a Biblical Perspective, which enjoys the endorsements of numerous respected Christian teachers and has sold more than 100,000 copies.
Austin was once on staff with Campus Crusade for Christ, working directly with founder Bill Bright, helping to develop the ministry’s approach to working with high-capacity donors. He was a founding board member of Pro Athletes Outreach, a Christian training ministry to pro athletes and coaches of many sports, and The Christian Embassy, an outreach ministry to government and diplomatic officials in Washington, D.C.
Austin received an undergraduate degree in Banking and Finance from the University of Kentucky. He and his wife, Susie, have three adult sons and 10 grandchildren, and live in Louisville, Ky.
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." – The Sixteenth Amendment to the U.S. Constitution, passed by Congress in 1909, ratified in 1913.
Happy Tax Day! Let's pretend it's 1909, and we're in the visitor's gallery of the U.S. Senate. We're listening in on the debate surrounding a proposal to approve and implement a federal income tax.
We've just updated SMI's Personal Portfolio Tracker and our monthly Fund Performance Rankings report with mutual-fund performance data through March 31, 2019.
The Portfolio Tracker: The online Tracker personalizes SMI's fund rankings to your specific situation, making it easier to apply our momentum-based Fund Upgrading strategy to your 401(k), 403(b), or other retirement plan.
The Tracker filters the performance data of 20,000+ funds to produce a concise report covering only the funds available in your plan(s).
If you're new to the Tracker, watch this introductory video that explains how to set up the Tracker with the funds available via your workplace plan.
Typically, we update the Portfolio Tracker with month-end performance data from the fund-research firm Morningstar on the 8th of the new month. (Morningstar's database is subject to revisions during the first few days of the new month. By the 8th, the performance numbers have solidified and are trustworthy.)
Fund Performance Rankings (FPR): The FPR report is a PDF file containing month-end performance data — along with SMI's momentum rankings — for more than 1,600 no-load traditional funds and ETFs.
The funds included in the FPR are selected on the basis of asset size, brand familiarity, and brokerage availability.
Check page 2 to learn how to use the FPR report. Page 3 includes an overview of the 70+ risk categories that will help you compare "apples to apples." Page 4 has explanations of the various data-column headings.
SMI offers two primary investing strategies for “basic” members. They are different in philosophy, the amount of attention they require, and the rate of return expected from each. Our preferred investing strategy is called Fund Upgrading, and is based on the idea that if you are willing to regularly monitor your mutual-fund holdings and replace laggards periodically, you can improve your returns. While Upgrading is relatively low-maintenance, it does require you to check your fund holdings each month and replace funds occasionally. If you don’t wish to do this yourself, a professionally managed version of Upgrading is available.
SMI also offers an investing strategy based on index funds called Just-the-Basics (JtB). JtB requires attention only once per year. The returns expected from JtB are lower over time than what we expect (and have received) from Upgrading. JtB makes the most sense for those in 401(k) plans that lack a sufficient number of quality fund options to make successful Upgrading within the plan possible. Here are the funds and percentage allocations we recommend for our Just-the-Basics indexing strategy.
We've just updated SMI's Personal Portfolio Tracker and our monthly Fund Performance Rankings report to reflect mutual-fund performance data through Feb. 28, 2019.
The Portfolio Tracker: The online Tracker personalizes SMI's fund rankings to your specific situation, making it easier to apply our momentum-based Fund Upgrading strategy to your 401(k), 403(b), or other retirement plan. The Portfolio Tracker filters the performance data of the 20,000+ funds we follow to produce a concise report covering only the funds available in your plan(s).
Typically, we update the Tracker with month-end performance data from the research firm Morningstar by the 8th of the new month. (Morningstar's database is subject to revisions during the first few days of the new month. By the 8th, the performance numbers have solidified and are trustworthy.)
Fund Performance Rankings (FPR): The FPR report is a PDF file containing month-end performance data — along with SMI's momentum rankings — for more than 1,600 no-load funds and ETFs. The funds included have been selected on the basis of asset size, brand familiarity, and brokerage availability.
Check page 2 of the FPR report to learn how to use it. Page 3 includes an overview of the 70+ risk categories that will help you compare "apples to apples." Page 4 has explanations of the various data-column headings.
Robert Sharp, in his Lore and Legends of Wall Street, says that the investment usage of the terms “bull” and “bear” may date back to the California gold rush of 1848 when miners would entertain themselves with bullfights.
It was probably inevitable that someone would wonder aloud how the bulls would do against the powerful grizzlies that roamed wild in the area. It wasn’t long before they were turning the bulls and the grizzlies loose in the same arena and betting on the outcome.
Sometimes the bull would win by impaling the bear and tossing it up over his shoulder. But more often the grizzly emerged the victor by using its massive strength to wrestle the bull down to the ground, frequently breaking its neck in the process. The bull won by taking its opponent up, but the bear won by taking its opponent down. The terms were soon introduced in San Francisco, where active trading took place in mining shares, to describe opposing investors who fought to establish the direction of the market.
We've just updated SMI's Personal Portfolio Tracker and our monthly Fund Performance Rankings report to reflect mutual-fund performance data through Jan. 31, 2019.
The Portfolio Tracker: The online Tracker personalizes SMI's fund rankings to your specific situation. You can take the full universe of 20,000+ mutual funds we follow and transform the data into a concise report covering only the funds available in your 401(k), 403(b), or other retirement plan(s).
Typically, we update the Tracker with month-end data from the investment research firm Morningstar by the 8th of the new month. (The month-end numbers in Morningstar's database are subject to revisions during the first few days of the new month. By the 8th, the numbers have solidified and are trustworthy.)
Fund Performance Rankings (FPR): The FPR report is a PDF file containing performance data — along with SMI's momentum rankings — for more than 1,600 no-load funds and ETFs. The funds included have been selected on the basis of asset size, brand familiarity, and brokerage availability.
Check page 2 of the FPR report to learn how to use it. Page 3 includes an overview of the 70+ risk categories that will help you compare "apples to apples." Page 4 has explanations of the various data-column headings.
We've just updated SMI's Personal Portfolio Tracker and our monthly Fund Performance Rankings report to reflect mutual-fund performance data through Dec. 31, 2018.
The Portfolio Tracker: The online Tracker personalizes SMI's fund rankings to your specific situation. You can take the full universe of 20,000+ mutual funds we track and transform the data into a concise report covering only the specific funds available to you via your 401(k), 403(b), or other retirement plan(s).
Typically, we update the Tracker with month-end data from the investment research firm Morningstar by the 8th of the new month. (Why the 8th? The month-end numbers in the Morningstar database are subject to change during the first few days of the new month as data come in and calculations are made. By the 8th, the numbers have solidified and are trustworthy.)
Fund Performance Rankings (FPR): The FPR report is a PDF file containing performance data, plus SMI's momentum rankings, for more than 1,600 no-load funds and ETFs. The funds included in the FPR have been selected on the basis of asset size, brand familiarity, and brokerage availability.
Check page 2 of the FPR report to learn how to use it. Page 3 includes an overview of the 70+ risk categories that will help you compare "apples to apples." Page 4 has explanations of the various data-column headings.
On this Christmas Eve, enjoy reflecting on this ancient promise from the Book of Isaiah. It was written 700 years before "the fullness of time" finally arrived, when "God sent forth his Son, born of woman" (Galatians 4:4 ESV):
On Giving Tuesday, November 27, I offered a challenge to SMI members in the form of a giving opportunity — let's all work together this Christmas to help take the gospel to the people of India via the church-planters working with the Jesus Film Project:
Last year, the SMI family generously gave more than $12,000 in response to the Giving Tuesday challenge. Perhaps this year all SMI members together, each giving what he or she has a heart to give, could contribute $15,000, Susie and I will match it and the Jesus Film receives $30,000. Then the Jesus Film's matching-grant donors add $30,000 more, and the $60,000 raised can send 140 film teams out sharing Jesus for the next three months! Working together, we can do something significant to "seek and save the lost" in that corner of the world.
Well, as I expected you would, you came through with a wonderful response. You didn't give just $15,000. According to my friends at the Jesus Film Project, 73 mission-minded SMI members collectively gave $17,564! As in years past, generous SMI members learned of a need and wanted to be part of the solution.
“For God has not given us the spirit of fear, but of . . . a sound mind.” 2 Timothy 1:7
Investing can be challenging, not because the concepts are difficult to master, but because we are emotional creatures.
The markets are merely collections of people who act according to their fears and desires of the moment. In 1841, an Englishman named Charles Mackay became interested in the psychological aspects of crowd behavior with respect to people’s investment decisions. After analyzing several early widespread financial manias (such as the Dutch Tulip mania and the South Sea Bubble), he wrote a book that has become a classic: Extraordinary Popular Delusions and the Madness of Crowds. When you hear the details of these infamous financial episodes, it’s hard to believe that otherwise rational people could get so caught up in a mass delusion. (For more on the subject: A Short History of Financial Euphoria, by John Kenneth Galbraith.)
It used to read like ancient history, but many of us witnessed it first-hand in the tech-mania of the late-1990s, then again in the panicked selling of a decade ago.
Because of human nature and our susceptibility to crowd influences, it isn’t unusual for markets and stock prices to become overvalued (or undervalued) from time to time. The graph below shows how investors’ moods swing in predictable patterns as prices rise and fall.
Unfortunately, these stages are usually only obvious in hindsight. From 2009 through 2017, we saw Stages 1 through 4 unfold and enjoyed the ride. It appears we could now be in Stage 5, but it’s impossible to rule out that we’re still in Stage 4 (with more upside ahead) or Stage 6 (at the beginning of what could eventually become a bear market).
The good news is we’ve been preparing for this for some time. SMI’s strategy toolbox has been updated with defensive approaches such as Dynamic Asset Allocation and the new Upgrading 2.0 protocols. If you’re using a blend that includes these strategies, your portfolio is likely prepared for what’s ahead, whenever it arrives. Knowing these strategies will guide us through future bear markets, we can confidently stay invested now rather than trying to guess when to exit.
Having your portfolio prepared is half the battle. The other half is preparing yourself emotionally. Those with a short-term focus will be tempted to head for the sidelines because they’re worried about the curved line. Long-term investors, on the other hand, have the fortitude to stay committed because they’re aware of the power of the dotted line.
Yes, an eventual bear market is inevitable, and it could be bruising. But ultimately, those with at least a five-year time horizon can continue investing with confidence — especially if they’re using SMI’s defensive-oriented strategies to do so.
