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

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Recent Articles

Advisors Need a Fresh Look at Reverse Mortgages

by Wade D. Pfau

Through inertia and stubbornness, old ideas die slowly. Financial advisors maintain a dismal view about reverse mortgages. However, much has changed in just the past few years. Revisit your outdated thinking with an open mind about a tool that is on the cusp of more widespread use.

Getting Smart About Beta

by Sponsored Content from Invesco

Due to its simplicity, market-cap weighting has long been a popular means of calculating the value of market indexes. But as an investment strategy, market-cap weighting has limitations – frequently resulting in outsized proportions of overvalued stocks, and less-than-optimal exposure to undervalued stocks. Smart beta solutions seek to expand investors’ options by providing exposure to objective, rules-based methodologies that harvest returns from specific investment factors or deliver broad market exposure through alternative weighting strategies.

Is the Bond Index Broken?

by Michael Edesess

Several criticisms – I counted three – have been leveled at the AGG bond index recently. I explored these critiques in a wide-ranging conversation with John C. Bogle, renowned founder of The Vanguard Group. My conclusion is that two of these three criticisms are inconsequential or mistaken while the third is meaningful and significant.

How to Get the Attention of Wealthy Prospects

by Dan Richards

Given today’s competing demands for attention, it’s never been harder to get in front of affluent prospects. But here’s is one statistic that will get you in front of wealthy investors...

How to Build a COI Network

by Kristen Luke

How do you find good COIs with whom you can trade referrals? Follow these steps to create a powerful COI network:

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.

The Problem with a “Culture of Niceness”

by Beverly Flaxington

We all get along in our firm, and that’s the problem. Issues go unresolved because no one wants to rock the boat. People don’t raise their concerns because our firm leader is the consummate “nice guy.” How do I bring issues up without being the bad guy?

The Investment Portfolio of the Future

by Bob Veres

I envision a world where advisors are vetting a growing number of nontraditional investments for their clients.

Why Advisors Should Use Deferred-Income Annuities

by Michael Finke

I will show that an eminently effective way to fund retirement is through a deferred-income annuity, particularly if it is purchased through an IRA as a qualified longevity annuity contract (QLAC). The advantages of purchasing a QLAC include the ability to avoid RMDs.

How Male Advisors Should Dress to Win Clients

by Dan Solin

I have found the single most significant factor in increasing my clients’ closing ratio has been their willingness to substantially upgrade their wardrobe. In this article, I will discuss my experience with men. Next week, I will discuss dress for women.

Recent Commentaries

Devil Inside, Redux: Another Look at the Variety of U.S. Market Valuation Metrics

by Liz Ann Sonders of Charles Schwab

I’ve written many times about equity market valuation being both in the eye of the beholder and a function of the chosen indicator. Even the most common valuation metric—the price/earnings (P/E) ratio—has many derivations. The table in this report is a summary of most of the common (and somewhat less common) valuation metrics, and a subjective assessment of whether they are sending an inexpensive or expensive message about the stock market presently.

A Tipping Point for TIPS?

by Russ Koesterich of BlackRock

BlackRock Global Chief Investment Strategist Russ Koesterich discusses the case for Treasury Inflation Protected Securities in the current environment.

Follow the Spending

by Andy Fleming of Heartland Advisors

Year-over-year global trade growth, as measured in U.S. dollars, has turned negative for the first time in more than six years. While those predicting a recession have jumped on this bandwagon, a closer look at how Americans are spending money tells a different story. Consumer spending is up a healthy 6.9% since the 2007 pre-recession levels, yet those dollars are being spent in different areas. While we’d welcome an uptick in global trade, we believe without it, investors can still profit by following the spending.

This Chart is Too Ugly for Comfort

by Bryce Coward of GaveKal Capital

It’s quite easy to get carried away with the drawing of conclusions based on a few technical chart patterns (and we are not doing that here!), but this chart is just too ugly to at least go unmentioned. What we’re looking at is the percent of stocks in our own Gavekal Capital International DM Americas Index that are at least 10% off of their 200-day high.

Expect Strong Christmas Spending

by Brian Wesbury, Robert Stein of First Trust Advisors

We are watching Christmas season sales data very carefully, but we also warn investors that the early data are not very useful. No matter what initial readings show, the underlying fundamentals look relatively strong.

Reasons to Stick with a Pro-Growth Investment Stance

by Robert Doll of Nuveen Asset Management

U.S. markets were relatively quiet last week due to the Thanksgiving holiday. Economic data were generally positive and investors seemed less concerned about increasing evidence that the Federal Reserve will raise rates at its policy meeting in December. The S&P 500 Index was up fractionally for the week. Smaller capitalization stocks outperformed, as did the consumer staples and energy sectors. Outside of the United States, Chinese stocks sold off sharply on Friday as investors grew nervous about policymakers’ latest attempts to regulate the Chinese brokerage industry.

Cutting Your Losses? With High-Yield ETFs, Maybe It’s Time

by Gershon Distenfeld of AllianceBernstein

If you bought a high-yield exchange-traded fund (ETF) over the past two years and still own it, you’ve probably lost money. But don’t fret. This might be an ideal time to change course.

Politics and Performance: Does Control of the White House Really Matter?

by David Carroll of Cleary Gull

The standard response is that the market favors Republican candidates due to their more business-friendly posture favoring lower taxes and less regulation. History, however, is on the side of the Democrats. Since 1945, the average annual gain of the S&P 500 under a Democratic president was 9.7%. Whereas, under a Republican in the White House, the average annual return was only 6.7%. What gives?

Weighing the Week Ahead: Will the Fed be Data Dependent?

by Jeff Miller of NewArc Investments, Inc.

Back from a quiet, holiday-shortened week, market participants face an avalanche of data and plenty of FedSpeak. This is an irresistible combination for pundits, who will parse each economic report with emphasis on what it might mean for the Fed. In light of many Fed promises, they will all be asking: Will the Fed really be data dependent?

Recent dshort Posts

S&P 500 Snapshot: Has the Santa Rally Started?

The S&P 500, which has alternated between gains and losses for eleven sessions, started December on a positive note. The index opened at its intraday low and surged to its morning high a few minutes later. It then exhibited some indecision through the early afternoon before rising to its 1.07% closing gain just three ticks off its intraday high. Will the index continue its pattern of alternating between gains and losses in tomorrow's session? Or could we be seeing the start of a holiday rally?

Light Vehicle Sales Per Capita: Another 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 62.6%.

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.

Regression to Trend: A New Look at Long-Term Market Performance

Quick take: At the end of November the inflation-adjusted S&P 500 index price was 89% above its long-term trend, an increase from 84% the previous month.

About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.

The Q Ratio and Market Valuation: November 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.

ISM Manufacturing Index: First Contraction in 36 Months

Today the Institute for Supply Management published its monthly Manufacturing Report for November. The latest headline PMI was 48.6 percent, a decrease of 1.5% from the previous month and below the forecast of 50.5. This was the first month of contraction in 36.

Crestmont Market Valuation Update

Quick take: Based on the November S&P 500 average of daily closes, the Crestmont P/E is 92% above its arithmetic mean and at the 97th percentile of this fourteen-plus-decade monthly metric.