by Larry Swedroe
Among actively managed funds, American Funds has a reputation for providing investor-friendly, low-cost products with sustained records of outperformance. But has it outperformed comparable funds from Vanguard and Dimensional Fund Advisors (DFA)? If so, should investors expect its funds to maintain their edge?
by Wade Pfau
In the past, I’ve described two fundamentally different philosophies for retirement-income planning: probability-based and safety-first. Those philosophies diverge on the critical issue of where an individual must place their trust: in the risk/reward tradeoffs of an equity portfolio, or on the contractual guarantee of insurance products. Here’s how to overcome that challenge and integrate the two approaches in a retirement plan.
by Dan Richards
Advisors often run into prospects who already have an advisor in place. Here are three hot buttons to engage those who already have an advisor.
by Daniel Solin
Every time I coach a group of advisors, I invariably learn something new in the process. Here is how my time working with practitioners led to an epiphany that changed the focus of my coaching – and drove better results for my clients.
by Beverly Flaxington
Our advisory business is going very well. The better it goes, the less involved my business partner becomes. She will come in late, leave early and generally be disruptive when she is here. God forbid I say anything and she bursts into tears. What can I do?
by Lauren Hong
Millennials are bucking trends day-in and day-out. As of 2013, they’re officially the largest, most diverse generation in the U.S. As a financial advisor, you cannot ignore them. Here’s how to include millennials in your marketing plan.
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.
by Stephen Terrell
I recently sat down with one financial advisor who truly believes that life settlements serve a great purpose for the right client in the right situation. And his case study is emblematic of how these transactions, which enable a senior to sell a life insurance policy for immediate cash, can be an appropriate option for the right client.
by Justin Kermond
Sallie Krawcheck is a woman with a cause. She has a solution to the retirement crisis and a strategy for advisors to grow their female client bases.
by Justin Kermond
Jeremy Grantham says equity valuations are heading toward the “two-sigma” level that is the requisite threshold for a true bubble. At some point – which is not imminent – he says a “trigger” will precipitate the reversion back to mean levels. The market will continue to deliver positive returns until the next election, according to Grantham.
by Eric Bush of GaveKal Capital
At first glance, the most eye-opening stat in the latest monthly employment report is the fall in the participation rate from 62.9% to 62.6%. This latest level is the lowest level since October 1977.
by Roger Nusbaum of AdvisorShares
It is still true. As I write this post Monday after the close there is still a lot of uncertainty on how Greece will precisely play out. Markets were down on Monday of course, right now the S&P 500 is at 2057 right around where it started the year and is flirting with its 200 day moving average.
by David Zahn of Franklin Templeton Investments
Whatever the outcome of the Greek referendum on Sunday (July 5), the result is likely to mean more uncertainty and possibly pain for the people of Greece. So far, according to David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, the economic fallout of the crisis appears to be mostly contained within Greece, and the likelihood of longer-term contagion to other eurozone economies seems to be limited.
by Morgan Harting, Martin Atkin of AllianceBernstein
Investors and advisors know they can’t depend solely on the old standbys—bonds, high-dividend stocks and cash—to produce income today, and they’re ready to try a new approach. But which one?
by Frank Holmes of U.S. Global Investors
American industrialist J. Paul Getty once said: “If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” And when the amount is $1.73 billion, it’s everyone’s problem. Greece is officially in arrears for missing its scheduled payment Tuesday to the International Monetary Fund (IMF). Expecting this, American stocks had their largest one-day drop of 2015 on Monday. Market volatility, as measured by the VIX, spiked sharply.
by Andrew Pease of Russell Investments
Russell Investments’ Andrew Pease highlights insights from the investment strategists’ latest investor outlook and explains what may be in store for investors next quarter.
by William Smead of Smead Capital Management
When the stock market exploded to the upside after March 10th of 2009, I turned to my colleagues and said, "It's time to get out the 1982 playbook." The last deep recession with well-above 10% unemployment was in 1982 and stocks had suffered from numerous bear markets. Stocks took off in anticipation of an enduring economic recovery and it paid to believe in its longevity and the positive long-duration effect it would have on stock prices.
by Jason Hsu of Research Affiliates
Every year we invite some of the investment industry’s most creative thinkers to speak about their work at the Research Affiliates’ Advisory Panel conference. Along with Nobel laureates Vernon Smith and Harry Markowitz, the speakers at our 14th annual meeting included Campbell Harvey, Richard Roll, Andrew Karolyi, Bradford Cornell, Andrew Ang, Charles Gave, Tim Jenkinson, and our very own Rob Arnott. The richness of the speakers’ presentations beggars any attempt to summarize them; I’ll limit myself to the points I found most intriguing and illuminating.
by Mark Mobius of Franklin Templeton Investments
We have found that companies in the consumer or retail space with a high market share can benefit from rising consumption and GDP per capita. These investments are particularly attractive if profit margins can be improved.
Recent dshort Posts
Nonfarm Employment has been in a steady upward trend. Today's report of 223K new nonfarm jobs in June was a bit below expectations. More significant is the fact that May nonfarm payrolls were revised downward by 26K from 280K to 254K and April downward by 34K from 221K to 187K, a total revision of -60K for the two months. The unemployment rate ticked down two notches from 5.5% to 5.3%, a drop driven by a larger decline in the labor force (432K) than the reduction in the unemployed (375K).
Here is a summary of the four market valuation indicators we update on a monthly basis.
- The Crestmont Research P/E Ratio
- The cyclical P/E ratio using the trailing 10-year earnings as the divisor
- The Q Ratio, which is the total price of the market divided by its replacement cost
- The relationship of the S&P Composite price to a regression trendline
What does the ratio of unemployment claims tell us about where we are in the business cycle and our current recession risk? At present, the ratio for Continued Claims has been trending down. Excluding the 1981 recession, the Initial Claims trough lead time for a recession has ranged from 7 to 22 months with an average of 12 months if we include the 1981 recession and 14 months if we exclude it. Admittedly, the last recession is an extreme example, but the Initial Claims trough preceded its December 2007 onset by a whopping 22 months.
ECRI's most recent article suggests that wage inflation does not support the case for a rate increase. "The recent rise in wage inflation, having become an obvious fact, is increasingly being used to support the case for rate hikes – including by Fed Chairman Janet Yellen, who now sees these “tentative signs of stronger wage growth” as a harbinger of inflation."
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns. In a "normal" market environment -- one with conventional business cycles, Federal Reserve policy, interest rates and inflation -- current valuation levels would be a serious concern.
But these are different times.
Today's seasonally adjusted 281K new claims was well above the Investing.com forecast of 270K. The four-week moving average at 274,750 is approximately 8K above the 15-year interim low set in mid-May.
Today's report of 223K new nonfarm jobs in June was a bit below the Investing.com forecast of 230K. More significant is the fact that May nonfarm payrolls were revised downward by 26K from 280K to 254K and April downward by 34K from 221K to 187K, a total revision of -60K for the two months. The unemployment rate ticked down two notches from 5.5% to 5.3%, a drop driven by a larger decline in the labor force (432K) than the reduction in the unemployed (375K).