ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

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Recent Articles

Why Bond Funds Don’t Belong in Retirement Portfolios

by Wade Pfau

Income annuities provide payments precisely matched to a client’s longevity while stocks provide opportunities for greater investment growth. The question remains whether clients should hold bond funds in their retirement income portfolio.

Concerned About Interest Rates Rising? Consider Convertibles

by Sponsored Content from Invesco

  • Convertible securities uniquely combine equity and bond features.
  • In my view, convertibles are attractive today due to their historical performance during rising interest rate periods.
  • I examine asset class performance during each of the last 10 periods of US rising interest rates.

Five Small Changes that Boost Productivity

by Dan Richards

Every advisor would like to get more done in less time – and many look to moving to a paperless office and to other breakthroughs in technology in order to do just that. But a recent conversation with an advisor reminded me that to increase your productivity, it’s the small changes that matter.

The Investment Opportunity from Share Buybacks

by Michael Lebowitz

Clear-headed reason shows that unless one is an executive whose compensation is tied to metrics influenced by the effects of share buybacks, there are few instances that support this use of corporate resources. Indeed, shrewd investors can profit at the expense of companies that have aggressively bought back shares.

What Drives Risk Tolerance

by Daniel Solin

To be a successful advisor, you need to understand how risk affects the decisions investors make and what you can do to make those decisions more objective and responsible. Demonstrating value at a time when investments are becoming more of a commodity is a popular topic in advisor-industry circles.

Career Center

by Various

Find career opportunities for firms that seek to add financial advisors and planners to their staff. Read more to find out how to post opportunities at your firm.

When Employees Become Owners

by Beverly Flaxington

I hired a team member a couple of years ago who was very seasoned with an excellent background and a track record of success. He arrived, and all of a sudden he wasn’t motivated, didn’t return client calls in a timely fashion and had no fire in the belly. He wants ownership, but I need to see motivation to give it.

Are Managed-Payout Funds Better than Annuities?

by Joe Tomlinson

Managed-payout funds promise to meet retirees’ need for sustainable lifetime income without relying on annuities. To see whether this promise can be fulfilled, I’ll answer three questions: What’s the best design for such funds? How do they compare to annuities? Can retirees do even better by combining managed-payout funds and annuities?

Should You Dress Down for Client Meetings?

by Dan Richards

In a previous article, Dan Solin pointed to research on how performance improves if people dress in a more professional fashion. But my recent conversations with advisors and clients suggest that while dressing up can have a positive impact, you can overdo it. In fact, in some cases it makes more sense to dress down.

Late-Cycle Warnings from the M&A Market

by David Schawel

Are we nearing the end of the equity bull market? An ominous signal is coming from recent activity in the M&A market.

Recent Commentaries

Bridging the Gap in Global Infrastructure Funding, Part 1

by Darin Turner of Invesco Blog

Infrastructure is the backbone of every economy, providing essential public services such as water supply, energy and mobility. And for investors, infrastructure also has the potential to provide unique benefits.

A Bad Equilibrium & How Speculative Distortion Ends

by John Hussman of Hussman Funds

In economics, we often describe “equilibrium” as a condition where demand is equal to supply. Textbooks usually depict this as a single point where a demand curve and a supply curve intersect, and all is right with the world.

Schwab Market Perspective: The Calm Between the Storms

by Liz Ann Sonders, Brad Sorensen, Jeffrey Kleintop of Charles Schwab

Peak earnings season is behind us, Greece is not in imminent danger of exiting the euro, Europeans have headed out on vacation and the US Congress won’t be far behind. After a volatile start, the US market appears to be settling into a more typical summer pattern—for now.

Retired Investors Don’t Buy Bonds Until?

by Chuck Carnevale of F.A.S.T. Graphs

The primary attractions supporting investing in bonds or other fixed income instruments have traditionally been high income and safety. People invest their principal in bonds and receive a stated interest rate (coupon) over the life of the bond and are given the promise of having their principal returned at maturity. Under normal times, bonds would typically pay a higher rate of interest than the dividend rate on stocks. Consequently, bonds have acquired the reputation as low risk and high income instruments.

A Look at Reported Results, and Subsequent Price Performance

by Jennifer Thomson of GaveKal Capital

With slightly more than half of the constituents in the MSCI World Index having reported 2Q results, we thought it would be useful to take a look at the trend in sales and earnings so far. In the developed world, about 54% of those companies that have reported sales results have surprised positively, led by the Health Care and Financials sectors. The most negative sales surprises have been concentrated in the Consumer Staples, Materials, and Industrials sectors.

GDP, the ECI, and the FOMC

by Scott Brown of Raymond James

Following Fed Chair Janet Yellen’s monetary policy testimony in mid-July, the odds of a September rate hike seemed about even. That doesn’t mean that the Fed’s decision would be a toss-up at the time of the meeting. When the September 16-17 policy meeting rolls around, it should be pretty clear what the Fed will do (or not do). Rather, that policy outlook reflected the uncertainty in the economic data that would arrive between now and the September FOMC meeting. However, just two weeks later, the evidence is pointing to a likely delay.

Mortgages: Don’t Be Fooled by the Averages

by Michael Canter, Matthew Bass of AllianceBernstein

US mortgages today have little in common with the risky loans made before the housing crisis. But some market participants aren’t treating them all that differently. We think that’s a mistake—and an opportunity.

The End of U.S. Sovereign Debt as a Near Perfect Protection Asset

by Michael Winchell of Larkin Point Investment Advisors LLC

For the past 30 years, the paradigm portfolio holding 60-percent stocks and 40-percent government debt seemed to exhibit a reasonable mix of both growth and protection, being a simple allocation the market beta of two very liquid asset classes with low (occasionally negative) correlation.

US Equity and Economic Review: Weaker Breadth Indicators, Edition

by Hale Stewart of Hale Stewart

The Fed’s policy statement was the main economic event this week; its opening paragraph began, “Growth in household spending has been moderate and the housing sector has shown additional improvement; however, business fixed investment and net exports stayed soft.”

Recent dshort Posts

Weekly Gasoline Price Update: Regular and Premium Drop Again

It's time again for our weekly gasoline update based on data from the Energy Information Administration (EIA). The price of Regular and Premium dropped six and five cents respectively again from last week. According to GasBuddy.com, California has the highest average price for Regular at $3.73 with Los Angeles averaging $4.00. South Carolina has the cheapest at $2.25.

Light Vehicle Sales Per Capita: A New Look at the Long-Term Trend

For the past few years we've been following a couple of transportation metrics: Vehicle Miles Traveled and Gasoline Volume Sales. For both series we focus on the population adjusted data. Let's now do something similar with the Light Vehicle Sales report from the Bureau of Economic Analysis. This data series stretches back to January 1976. Since that first data point, the Civilian Noninstitutional Population Age 16 and Over (i.e., driving age not in the military or an inmate) has risen 62%.

The Q Ratio and Market Valuation: June Update

The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It's a fairly simple concept, but laborious to calculate. The Q Ratio is the total price of the market divided by the replacement cost of all its companies.

Two Measures of Inflation and Fed Policy

The BEA's Personal Consumption Expenditures Chain-type Price Index for June shows core inflation below the Federal Reserve's 2% long-term target at 1.29%. The latest Core Consumer Price Index release, also data through June, is higher at 1.76%. The Fed is on record as using Core PCE data for its primary inflation gauge.

Crestmont Market Valuation Update

Quick take: Based on the July S&P 500 average of daily closes, the Crestmont P/E is 96% above its arithmetic mean and at the 98th percentile of this fourteen-plus-decade monthly metric.

Regional Fed Manufacturing Overview

The Federal Reserve System consists of twelve Federal Reserve Banks, twenty five branches, and the Board of Governors in Washington, D.C. Each bank serves a larger regional district. Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. Here we introduce an overview of all five with an overlay and average of historical data.

Is the Stock Market Cheap?

Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.