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Retirement Savings: How Much Is Enough? Part 2: Good News Not Good Enough
by Jon Vogler of Invesco Blog,
This second blog in a two-part series about retirement readiness discusses whether 401(k)s and Social Security can adequately meet retirement income needs. Part 1 looked at the rule-of-thumb numbers cited as guidelines for income replacement in retirement.
A Kid?s Market?
by Jeffrey Saut of Raymond James,
The Great Winfield goes on to say, in Adam Smith?s classic book from 1967, ?The strength of my kids is that they?re too young to remember anything bad, and they are making so much money they feel invincible.? He rented kids with the idea that one day the music will stop (it partially did in 1969-1970 and completely did in 1973-1974) and all of them will be broke but one.
Gundlach - Rates Will Remain Low in 2014
by Robert Huebscher,
Slowing economic growth, low inflation and a lack of motivated sellers will keep interest rates depressed, at least for the rest of this year, according to Jeffrey Gundlach. But investors should prepare for an eventual rise in rates, he said, because he is skeptical of the Federal Reserves ability to successfully exit from QE.
Active Share. Toward a Stock Picker’s Market?
Explore five groups of mutual funds-from stock pickers to moderately active to the closet indexers. Which categories produced the best risk-adjusted return 1990-2009? The more different the portfolio from its benchmarks, the greater the range of possible outcomes. Consider a tool like active share.
Japan?s Rising Opportunity
After WWII, the Japanese economy began what is sometimes referred to as the ?Economic Miracle?, a three-decade long period of growth and prosperity. Japanese firms and their management teams were studied around the world as the model of efficiency and an example for all companies and leaders to strive for. In 1989, a bubble in real estate fueled by speculators burst, and the Japanese markets crashed. Since then, the Japanese economy has been in a virtual standstill with more than two decades of stagnant growth and a deflationary environment.
Understanding The "Millennial Generation"
As the father of two adult children who were born in the early 1990s, I have a particularly keen interest in the ?Millennial Generation? ? those 80 million or so people born in the US between 1980 and 2002, the largest generation ever ? and who will be running the country before too long.
Retirement Savings: How Much Is Enough? Part 1: 70%, More or Less?
by Jon Vogler of Invesco Blog,
This first blog of a two-part series about retirement readiness looks at the rule-of-thumb numbers cited as guidelines for income replacement in retirement. Part 2 will discuss how adequately 401(k)s and Social Security will meet those target numbers.
Recalibrating the Retirement Clock: Should 75 Be the New 65?
by Nick Kaiser of Saturna Capital,
Retirement sounds pretty sweet, doesn't it? Exotic holidays. Finally writing that novel. Never having to rely on an alarm clock to wake up early. Being your own boss. Retirement goals are as varied as people themselves.
Heating Up and Thawing Out
Concerns over growth and geopolitical issues have largely been set aside by investors in the United States, but complacency can be dangerous and another pullback in the near term could unfold if history holds. Investors should keep longer term goals in mind and remember that trying to time the market is an extremely difficult task. The weather is turning and economic data will be watched to see if recent softness was temporary or something more serious. We lean toward the former, but a retrenchment in bond yields would cause some concern about the potential for something more than weather.
High and Sustainable Profitability
To understand our third criteria for selecting stocks, you need to imagine athletes who have found the fountain of youth. Consider this: Robinson Cano has been one of the most consistently successful baseball players over the last ten years, and the Seattle Mariners just signed Cano to a 10-year contract for $240 million. Companies, however, don't have ten to twenty-year careers, because the average company in the S&P 500 Index lasts 50 years.
U.S. Household Net Worth Hits New Record High
The Federal Reserve announced last Thursday that US household net worth reached a new record high by the end of last year ? at $80.7 trillion. The Fed said the new record was made possible largely due to vaulting stock prices, increased home values and Americans paying off more of their debts.
Crashing Through the Insurance Industrys Wall of Silence
by Bob Veres,
A cash-value insurance policy is essentially a mutual fund investment account that pays annual term-insurance premiums on behalf of the policyholder each year, so theoretically you should be able to get the same disclosure on the funds and on yearly payment for life insurance protection, the way you do on any of the term insurance websites. Heres how you can do that for your clients.
How Can You Find an Expert Whose Decisions You Can Trust?
Recently a family member visited the doctor to determine if she needed her gall bladder removed. Since she?d been having some pain, we assumed the answer would be ?yes.? But, of course, we wanted an expert opinion, so we went to a surgeon that has done more than 6,000 removals.
Four Reasons to Consider Emerging Markets for the Long Term
by Borge Endresen of Invesco Blog,
Emerging markets are at that peculiar place where everyone likes them over the long term, but very few like them in the short term. Many well-publicized headwinds from 2013 remain going into 2014, accompanied by election uncertainty in Brazil, India, Indonesia, South Africa and Turkey. And political uncertainty keeps surfacing in such places as Thailand, Turkey and the Ukraine.
Exchange-Traded Fun!
This week, we take a lighthearted look at Exchange-Traded Funds. ETFs are mutual funds that trade on a stock exchange. ETFs are rapidly taking a bite out of the business long dominated by traditional "open end" mutual funds - the investment in a basket of securities with a common characteristic, such as industry, company size, geographic region, etc.
Volatility Returns as Crisis in Ukraine Creates Uncertainty
by Kevin Mahn of Hennion & Walsh,
Most investors have most likely never even heard of Ukraine prior to the last two weeks. Now the future of Ukraine and potential repercussions on other countries in the region appear to be at the forefront of investor minds across the globe. Overall, Ukraine is a relatively small country in Eastern Europe with a population of about 46 million people that borders the likes of Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova.
Market Update
With the Ukrainian situation very much in focus, Treasury rates moved mostly lower last week. The yield curve exhibited a flattening bias, as longer dated maturities registered the biggest declines. For the week, 10 year treasury yields closed at 2.65%, a drop of eight basis points from the prior week, while two year yields were unchanged at 0.32%. As Gross Domestic Product (GDP) was revised lower to 2.5% from 3.2%, we also learned last week that the economy expanded at a slower pace in the fourth quarter of 2013 than previously estimated, giving the expansion less momentum heading into 2014.
Bond Aid: Positive Outlook for High Yield in 2014
While most fixed income asset classes tied to interest rates saw negative returns during 2013, high yield bonds returned more than 8%, according to the JP Morgan Domestic High Yield Index. While we anticipate slightly lower returns in 2014, it looks to be a positive year for high yield markets.
Bounce Back
US stocks have bounced and the markets still attractive and in the midst of a secular bull market. But there are likely to be bumps along the way; notably given that this is a midterm election year; which are known for first-half pullbacks. A diversified portfolio is important and both European and Chinese stocks appear to have upside, while Japan continues to frustrate with a two-steps forward, two-steps back sort of approach. And a final reminder not to replace fixed income assets with equities in search of higher income without recognizing the risk profile of a portfolio has changed.
Why Our Firm Uses DFA Funds
Research shows that 80% of active fund managers underperform their benchmarks. Index funds virtually eliminate this risk of underperformance. DFA, however, has engineered an even better mutual fund. This article explains key tenets of DFA’s approach and why our firm chose it over both active and index mutual funds.
Weekly Market Update
Interest rates were relatively range-bound last week, despite a string of disappointing economic releases. With severe weather across the country having an outsized impact on the economy of late, market participants have been treating the weak data with a high degree of skepticism. We suspect there is further room for data to disappoint relative to expectations, believing a clear reading on the state of the economy cannot be determined until the spring.
Leading Indicators Offer a Window into Europe?s Recovery
by Matthew Dennis of Invesco Blog,
We?re seeing signs that the recovery in Europe is progressing. I wanted to take a moment to highlight some of the positives, uncertainties and opportunities that we believe investors should consider about the region.
Meeting an Economic Need
At heart, Smead Capital Management is a stock picking organization. On top of our bottoms-up stock picking discipline, we are driven by our belief and respect for the laws of economics. One example of this is the subject of demographics. As long-duration investors, we want to understand where the aging process is taking demand in major product categories and how it will shape spending and production in the US. In other words, what economic needs will grow at the margin and who out there among companies that fit our other seven criteria can meet that marginal demand.
Help Your Clients Make a Bigger Impact With Their Investments in 2014
Investing with the hope of gaining a good return is a given. But todays investors are looking for returns that go beyond dollars and cents. Between 2010 and 2012, sustainable and responsible investing (SRI) grew more than 22 percent, reaching $3.74 trillion in total managed assets. To put that number into perspective, think of it this way: more than one dollar of every nine dollars under professional management in the United States is invested according to SRI strategies.
The Expanding Leveraged Loan Market
by Heather Rupp of AdvisorShares,
At the end of the day, a loan investor may be left with a security that has a low starting yield, little left in the way of capital gains potential, and with coupon income that is not at all increasing even if rates were to rise. While there are some selective opportunities for value in the loan space, broadly speaking we see high yield bonds as a more attractive market in the current environment.
Why Quantitative Easing Didn?t Work
IN THIS ISSUE: 1. Why Fed?s Quantitative Easing (QE) Didn?t Work 2. Velocity of Money Plunged During Financial Crisis 3. Should Bernanke & Company Have Done More? 4. QE Was a Huge, Dangerous Experiment That Failed 5. Fed Begins to ?Taper? QE Purchases in January 6. Conclusions ? What Happens Next?
Are Returns of Intermediate Bond Funds Persistent?
by Michael Edesess,
In the search for skillful managers, the most valued characteristic is persistence -- the ability of a manager to achieve superior returns consistently over time. Finding such managers is critical for fixed-income allocations, since the theoretical basis for indexing is weaker than it is for equities. Our study found, however, that persistence is elusive among a large sample of taxable bond funds.
Leveraged Finance Outlook: Riding the Low Default Wave
Following strong performance in 2013, we expect low (1%-3%) defaults in leveraged finance markets this year. Issuance should remain healthy, and continued slow but steady growth in the U.S. economy should offer further stability to these companies. However, careful credit selection and monitoring of sector trends remain imperative. Investors with low tolerance for volatility and more interest rate sensitivity may emphasize loans, while investors with greater risk tolerance and a more benign outlook for rates may look to high yield.
Monthly Letter to Our Clients & Friends
Although the rest of America may need a manufacturing revival, mutual fund manufacturing is not in need of help, as the business has been growing continuously for three decades. Because of the sheer number of funds and the amount of investment dollars they control, there is a very high probability that we are buying new positions and selling existing positions to one or more mutual fund companies.
What Would a Stronger Dollar Mean for Global Markets?
As the world watches the progress of the US Federal Reserves tapering program, and anticipates the strengthening of the US dollar, Were often asked how this affects our view of international markets and risk. The short answer is that it doesnt. Were long-term, bottom-up stock pickers , so we;re primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.
What Would a Stronger Dollar Mean for Global Markets?
As the world watches the progress of the US Federal Reserves (Feds) tapering program, and anticipates the strengthening of the US dollar, were often asked how this affects our view of the international market and risk. The short answer is that it doesnt. Were long-term, bottom-up stock pickers, so were primarily concerned with currency impacts on a company-by-company basis. However, there are some broad trends that are worth noting.
Why Majority of IFAs Struggle to Scale-Up Their Practice
by Rajat Dhar of Cogent Advisory,
With SEBI, the regulatory body coming up with wealth service guidelines for IFAs, it is evident that only those having larger scale of operations can adapt swiftly to the changing regulations and market conditions. But, large number of IFAs in India are finding it hard to scale up. This commentary outlines the generic reasons as to what stops IFAs to scale up their practices.
2013 Year-End Investment Commentary
by Team of Litman Gregory,
We find ourselves with a more sanguine big-picture view, at least over the nearer term, than we have had in some time. U.S. and global economic fundamentals gradually improved over the past year across a number of dimensions, and seem poised for continued improvement or at least stability in 2014. However, as we look ahead, the longer-term risks related to excessive global debt, subpar growth, and unprecedented government policy that we have worried about since the aftermath of the 2008 financial crisis still remain largely unresolved.
So Cruel: Pullback Could Become Correction
by Liz Ann Sonders of Charles Schwab,
For now, the EM tail is wagging the dog, but the US remains the worlds big dog and should ultimately get through the latest turmoil. "January Barometer" has sent mixed signals for the remainder of the year historically. More technical and sentiment recovery is likely needed before a market recovery is likely.
The Albatross of MPT Thinking
by Michael Edesess,
The January/February issue of the Financial Analysts Journal includes an article titled "My Top 10 Peeves" by Clifford Asness, who was trained in modern portfolio theory (MPT) and its underlying assumptions. Many of Asness peeves are directed at people who depart from the MPT worldview. In discussing his peeves, I will offer counter-arguments and explain why I think the MPT perspective is flawed.
Stocks for 2014: Fairly Valued Dividend Growth Stocks with an Emphasis on Dividends - Part 4
by Chuck Carnevale of F.A.S.T. Graphs,
I am a firm believer that common stock portfolios should be custom-designed to meet each unique individuals goals, objectives and risk tolerances. With that said, I believe it logically follows that in order to create a successful portfolio, the individual investor must first conduct some serious introspection to be sure that they truly "know thyself." Therefore, I believe the first, and perhaps most critical step, towards designing a successful equity portfolio is to ask your-self, and honestly answer several important questions.
Getting Comfortable With Volatility
Over the past few weeks, weve seen significant volatility in the markets, which has spooked some investors, but is also something we have become accustomed to. Markets generally (not only emerging markets) have become much more volatile during the last 20 years as a result of massive flows of money from not only institutional investors and long-only mutual funds but also hedge funds and high-frequency trading. We see such selloffs as potential opportunities to pick up bargains in select stocks if, in fact, the prices move low enough to draw our interest.
Looking Back at the Advisory Profession 20 Years from Now
by Bob Veres,
Ive powered up my time-travel hardware to take a clear look at the year 2034. Ive received budgetary approval to make a long-distance phone call into the future, and conduct a real interview with a successful advisor in that time period. Yes, it was expensive. But nothing is too good for our readers.
Results 2,851–2,900
of 3,362 found.
