Visit our recruiter spotlight to hear from our monthly sponsors about opportunities available for advisors in the industry.
by Michael Edesess
What would we think of doctors who deliberately hurt patients by prescribing dangerous and unhealthful products in order to make more money? Fortunately, the medical profession is set up in such a way that such things virtually never happen. This is not so in the financial services industry, where hazardous products are routinely sold to unsuspecting consumers.
by Larry Swedroe
Consumers can use their market power to demonstrate their aversion to certain business activities by choosing not to purchase goods or use services from companies that, in their minds, are selling immoral products. Similarly, investors can decide not to invest in such companies. But do those investors sacrifice returns relative to a broad-based index fund?
by Dan Richards
Women advisors represent the future of financial advice. Some of the differences from men that held them back in the past will work to their advantage going forward.
by Dan Solin
Our social interactions – particularly in large groups – are invariably geared to extroverts, who are naturally comfortable in settings designed to interact with strangers. When you and a prospect first meet, you will be strangers. There is a question you can ask that will maximize your chances of establishing a relationship.
by Jeffrey Briskin
Advisors will become net promoters for fund companies they believe offer superior characteristics or benefits in addition to good performance. These advisors will highly recommend these firms’ products to their clients and to their peers. This word-of-mouth advocacy is the most effective marketing tool that money can’t buy.
by Marc Gerstein
Eugene Fama and Kenneth French deserve enormous respect for the work they did in legitimizing an equity investors’ consideration of risk factors beyond the stock market itself and in identifying those factors. But to use factors as effectively as we can, we’ll have to use a framework that meets our client-centered concerns, which are not necessarily the same as those of academicians.
by Beverly Flaxington
The person who can best communicate thoughts and feelings to an audience gets heard. For financial advisors, effective communication with prospects, clients, centers of influence and peers is critical. I have developed the Six Keys to Confident Presenting as a guideline for the best way to deliver a message to any audience.
by Robert Huebscher
Most observers saw the recent troubles in the high-yield markets – the gating of the Third Avenue and Stone Lion funds – as a precursor to a junk-bond crisis. Instead, investors should be focusing on a potentially bigger problem, according to Russell Napier. Open-end mutual funds holding emerging-market debt are at risk.
by Laurence B. Siegel
In the two decades since his death, Hyman Minsky’s stature has grown enormously. He foresaw the great financial crisis of 2007-2009, and economists routinely refer to “Minsky moments” as the tipping point when seemingly stable financial markets collapse with catastrophic consequences. It’s instructive to speculate on how Minsky would view our post-crisis economic recovery, and a new book allows us to do just that.
by Jeff Miller of NewArc Investments, Inc.
The economic calendar is light and it is the start of the week-long Chinese New Year. This means some media time and space that must be filled. Needing an attention-getter, I expect the punditry to be asking: Is a recession looming?
by Brian Wesbury, Robert Stein of First Trust Advisors
The number one reason the US has a Plow Horse economy rather than a Race Horse economy is the growth in the size and scope of the federal government, which sits like a grossly overweight jockey atop an otherwise healthy thoroughbred.
by Christian Thwaites of Brouwer & Janachowski
What a ride. Stocks were mostly unchanged on the week, as of Thursday afternoon. We have seen a range in the last few weeks of around +/-4%. The action continues to be in bonds where we’ll risk showing the same chart two weeks in a row (updated of course).
by Robert Doll of Nuveen Asset Management
U.S. equity prices fell again last week as investors followed the “de-risking” theme that has dominated most of 2016. The S&P 500 Index dropped 3.0% for the week. Oil prices staged a slight rebound last week, as expectations rose for coordinated production cuts from OPEC countries and Russia. The dollar experienced a sell-off last week as well, which provided some support for the hard-hit commodity-related equity sectors.
by Joseph Hickey of Cleary Gull
The High Yield market is declining as the magnitude of the capital loss is amplified by the decline in energy prices. Most of the energy debt exposure is held by High Yield mutual funds and Hedge funds, not the banks. This is an important distinction. The High Yield market is designed to withstand a certain level of defaults and restructurings. Potential losses, while painful, should not cause the systemic collapse of the banking system and its ability to extend credit to the U.S economy.
by Joseph Stiglitz of Project Syndicate
The dominant policies pursued by developed countries during the post-crisis period – fiscal retrenchment and quantitative easing – have offered little support for household consumption, investment, and growth. On the contrary, they have tended to make matters worse.
by John Hussman of Hussman Funds
Historically, increases in the Fed’s balance sheet have only been positively associated with increases in the S&P 500, on average, when the S&P 500 was already in an uptrend and investors were already inclined to speculate.
by Richard Nield of Invesco Blog
The end of 2015 didn’t bring any dramatic changes to European fundamentals. However, there have been some subtle shifts that the Invesco International and Global Growth team is keeping an eye on in 2016. While our strategy did not initiate any new positions in Europe during the fourth quarter, recent volatility has brought some of our “watch list” names closer to the point where we would add them to the portfolio.
by Richard Bernstein of Richard Bernstein Advisors
When the global economy was binging on credit, it was fine to invest in marginal locations’ equity markets. However, as the global economy slowed, those fringe markets have disappointed, and “location, location, location” has proved as important to equity performance as it is in real estate.
Recent dshort Posts
Our benchmark S&P 500 opened the week with a savage selloff. The index plunged at the open to its 11 AM low, drifted a bit higher into the noon hour and then sold off to its -2.74% intraday low shortly before the final hour of trading. Some buying during that final hour trimmed the daily loss to -1.42%. The index is now down 9.32% for 2016 and down 13.02% off its record close last May.
It's time again for our weekly gasoline update based on data from the Energy Information Administration (EIA). The price of Regular and Premium are down six cents each from last week. According to GasBuddy.com, Hawaii has the highest average price for Regular at $2.64 and Ventura,CA is averaging $2.65. Oklahoma has the cheapest at $1.37.
The Labor Market Conditions Index (LMCI) is a relatively recent indicator developed by Federal Reserve economists to assess changes in the labor market conditions. It is a dynamic factor model of labor market indicators, essentially a diffusion index subject to extensive revisions based on nineteen underlying indicators in nine broad categories (see the table at the bottom for details). Today's release of the January data came in at 0.4, down from a revised 2.2 in December. Extentsive revisions were made to the entire series, including 10 out of the last 12 months.
Let's take a close look at Friday's employment report numbers on Full and Part-Time Employment. Buried near the bottom of Table A-9 of the government's Employment Situation Summary are the numbers for Full- and Part-Time Workers, with 35-or-more hours as the arbitrary divide between the two categories. The source is the monthly Current Population Survey (CPS) of households. The focus is on total hours worked regardless of whether the hours are from a single or multiple jobs.
The week-over-week change in our aggregate world market watch list was a healthy 1.10% gain, up from 0.68% the previous week, which was preceded by harshly negative numbers the first two weeks of 2016. Appropriately enough, Japan's Nikkei was the top performer, up 3.30% for the week, with most of the gain triggered by the Bank of Japan's announced policy of negative interest rates. Global indexes surged following the announcement. China's Shanghai is the conspicuous outlier, plunging 6.14% for the week despite a 3.09% rally on the news from Japan.
Note: This commentary has been updated to include Nonfarm Employment for January. As the adjacent thumbnail of the past year illustrates, Nonfarm Employment remains in its upward trend. The January report of 151K new jobs was substantially below expectations (Investing.com was looking for 190K), and the December number was revised downward by 30K from 292K to 262K.
ECRI's latest weekly data point shows a fractional decrease from the previous week's number. The WLI annualized growth indicator (WLIg) is at -2.3, a decrease of 0.2 from the previous week, and well off its interim low of -4.7 in mid-January. The YoY is now at -0.77%, in negative territory for the majority of the last 52 weeks.