Charitable Planning Opportunity: Donate Private Equity Fund Interests
Private equity funds often incur significant value over time, and may face taxable distribution. For philanthropically minded clients, illiquid assets such as these that have appreciated in value can be among the most tax-advantaged items to contribute to charity.
Existing-Home Sales: April Headline Number Down 2.3% Month-over-Month
This morning's release of the April Existing-Home Sales declined from the previous month to a seasonally adjusted annual rate of 5.57 million units. The March count was downwardly revised from 5.71 million to 5.70 million. The Investing.com consensus was for 5.65 million. The latest number represents a 2.3% decrease from the previous month and a 1.6% increase year-over-year.
FHFA House Price Index: The Rise Continues
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for the Q1 and the most recent month. U.S. house prices were up 0.6 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 6.3% (nonseasonally adjusted). On a quarterly basis, the index is up 6% year-over-year Q1 to Q1.
Expectations for U.S. growth continue to slow as distractions in Washington D.C. take away from the aggressive legislative agenda.
April New Home Sales Come in Below Expectations
This morning's release of the April New Home Sales from the Census Bureau came in at 569K, down 8.4% month-over-month from a revised 642K in March. Seasonally adjusted estimates for December and January were also revised. The Investing.com forecast was for 610K. Today's release included monthly revisions back to January 2015.
The Sources, Benefits and Risks of Leverage
When evaluating investment strategies it’s critical to understand the nature of the leverage being used.
Why the Future is Bright for AUM-Based Advisors
Over the past several months, I have been reading Dan Solin’s thought pieces in Advisor Perspectives and believe his gloomy outlook for the planning profession, and, more specifically, for advisors who are compensated via AUM-based fees, is misguided.
Will the Fed Change Course?
The Fed story may well command attention. I classify it as an important story, but not an urgent one. I have some strongly-held viewpoints:
- The exact timing of rate hikes is not important for long-term investors. The Fed has been following a policy of rate increases in line with economic data. While many do not believe this, the data are supportive. Tim Duy on recent strength.
- That said, the rate increases have second- and third-order effects. The perception of the pace of hikes impacts exchange rates. The weaker dollar affects major corporate earnings – in both directions. This makes the Fed news worth watching.
- Current data are stronger than widely thought, but much depends upon how one views the Q1 softness—meaningful or aberrant. Recent Fed speeches suggest a moderation in the rate-hike path.
- Rates will be increased more slowly, but the balance sheet will be reduced.
Hedge Fund Managers Pour SALT on U.S. Stocks, Look to Europe
Europe is back on the map. That was one of the main takeaways this week from the SkyBridge Alternatives (SALT) hedge fund conference in Las Vegas, where $3 trillion in assets was represented. Speaker after speaker touted European equities for their attractive valuations and as a means to diversify away from the volatile American market in light of rising U.S. geopolitical risk. France’s election of centrist Emmanuel Macron over far-right nationalist Marine Le Pen this month has especially eased investors’ fears that antiestablishment forces would challenge the integrity of the European Union (EU).
On the surface, China continues to outperform expectations. It has sustained a high rate of economic growth for longer than most other developing countries.
Why Liquid Alternatives Now
K2 Advisors’ Founding Managing Director David Saunders is speaking at the prestigious SALT conference this month in Las Vegas, where he’ll discuss the liquid alternatives landscape and why he thinks now’s the time for investors to consider this asset class.
Take Action: Five Ideas for DC Plan Sponsors
Active management has the potential to provide diversification, generate income and mitigate the risks of higher inflation and rising rates.
Secular Trends in Residential Building Permits and Housing Starts
Over the long haul the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the Starts data and the Permits data, which began being tracked a year later. The monthly data points are preserved as faint dots. The trends are illustrated with 6-month moving averages of data divided by the Census Bureau's mid-month population estimates.
No one said that the flight path to higher returns would be easy. With the increase in uncorrelated asset returns, there are many different sets of positive returns out in the market right now. You just need to set the right flight path to snatch some of those better return streams.