The Fiduciary Rules Channel

Weekly Unemployment Claims: Down 22K, Lowest Since 1973

Today's seasonally adjusted 222K new claims, down 22K from last week's revised 244K, was better than the forecast of 240K. From the release: "Claims taking procedures continue to be severely disrupted in Puerto Rico and the Virgin Islands as a result of power
outages and infrastructure damage caused by Hurricanes Irma and Maria."

Why Market Valuations are Not Justified by Low Interest Rates

Current market valuations are consistent with negative expected returns for the S&P 500 over the coming 10-12 years, with a likely market loss of more than -60% in the interim.

What To Expect With Tax Reform

This Strategic Insight discusses how to bolster tax revenue by increasing potential growth and productivity through tax and spending reform to enhance global competitiveness and increase fairness across taxpayers, thus turn fiscal deficits into surplus. Various guiding principles outlined suggest various proven ways to achieve these objectives.

Market Overview Q317: Raised on Promises

The widespread indifference to risk in the markets strongly suggests something is wrong. That something is “bad promises” and it has significant and widespread implications for investors.

Why Market Valuations are Not Justified by Low Interest Rates

Current market valuations are consistent with negative expected returns for the S&P 500 over the coming 10-12 years, with a likely market loss of more than -60% in the interim. The proposition that “lower interest rates justify higher valuations” has become a rather dangerous slogan, and is a distressingly incomplete statement that ignores the other half of the sentence: “provided that the stream of expected cash flows is held constant.”

The Ratio of Part-Time Employed: September 2017

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.

Drowning at the Water Cooler

I recognize that as a leader it’s up to me to instill good communication practices across my team. But I have a couple of people who are gossips.

Part 2: Evidence Based Investing is Dead. Long Live Evidence Based Investing!

This article will tackle the “p-hacking” issue and propose a framework to help those who embrace evidence-based investing to make judicious decisions based on a more thoughtful interpretation of finance research.

Passive Carnage Is Illogical

In Passive Carnage Is Illogical, we discuss what is driving the passive rotation, as well as how strategies and products have evolved to suit investors’ changing needs.. We also consider the importance of three disruptors in asset management that are having a remarkable influence, including: Separately Managed Accounts (SMAs), Robo-advisors (Robos), and Exchange Traded Funds (ETFs).

Should Advisors Write a Book?

After working with clients for over 20 years, I believe I have insights and information I could share more broadly and am considering writing a book.

What’s Behind the Anti-Fiduciary Mindset?

In case you missed it, on September 7, APViewpoint hosted one of the best debates ever regarding the fiduciary standard and the DOL rule. It was notable because unlike most of what you’ve been reading, it covered both sides of the topic, and the debaters forced each other to provide deeper rationales for their beliefs. Here are my key insights, particularly those that illustrate the thinking behind the anti-fiduciary mindset.

Eyes Wide Shut

At the October 2002 market low, the S&P 500 stood -49.2% below its March 2000 peak (-48.0% including dividend income), with the Nasdaq 100 having lost more than -82.8% from its high, on the basis of both price and total return. The loss wiped out the entire total return of the S&P 500, in excess of Treasury bills, all the way back to May 1996.

Masters Series Interview with Richard H. Thaler, PhD

Richard Thaler, PhD, is considered one of the founding fathers of behavioral economics, the nexus of economics and psychology—specifically how people and organizations make decisions that may have negative consequences and how they frequently repeat these mistakes. 

Helping Clients Who Overspend

How do I get through to clients who spend too much money?

The Value Proposition that Negates the Robo Threat

What is it worth to have a financial services coordinator who understands your clients’ needs and the language spoken by the specialized service providers they use? Today’s robo-advisors cannot provide the depth or breadth of coordination clients need. But you can, at least for your best clients. This should be a core of your value proposition.