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Results 3,101–3,150
of 3,362 found.
The Most Underappreciated Threat to the Advisory Business
by Bob Veres,
Financial advisors have often heard the warning that their investment management services are going to become commoditized ? so often, in fact, that you can forgive them for ceasing to pay attention. But if you dont believe that an online algorithm can replace the sophisticated advice offered by a flesh-and-blood advisor, then check out the Wealthfront USA website.
The Best Solution for Protecting Retirement Portfolios: Put and Call Options versus GLWBs
by Joe Tomlinson,
Retirees cannot be exposed to severe ? or even modest ? market losses. They need to protect their savings in a cost-effective manner. I will compare the projected outcomes for two types of strategies: options, which can reduce volatility, and products that guarantee lifetime income, such as variable annuities with guaranteed lifetime withdrawal benefits.
Implementing Behavioral Portfolio Management
Behavioral portfolio management is based on the notion that if the advisor can redirect his or her emotions and mitigate the impact of client emotions, it is possible to build superior portfolios by harnessing market emotions. This article describes how this can be done and presents evidence of the superiority of focusing on investor behavior when constructing and managing portfolios.
Surf's Up!
by Jeffrey Saut of Raymond James,
Last month I was reminded of Surfs Up! while rereading said report from my departed friend Stan Salvigsen of Comstock Partners fame. While that is the organization Stan, Michael Aronstein, and Charles Minter formed in the late 1980s, Stans investment career actually began in 1964 as an analyst with the Value Line Investment Survey. Subsequently, he was an equity strategist at a succession of firms, including Dreyfus, Oppenheimer, C. J. Lawrence, and Merrill Lynch.
Value Investing and the Philosopher's Stone
When J.K. Rowling finished her first manuscript of Harry Potter and the Philosophers Stone in 1995, she submitted it to 12 publishers, who all rejected the book. In time, those publishers would regret missing the chance to back an unknown author who would later take the world by storm. Like the publishers who passed over Harry Potter, we believe that many investors today risk missing a historic opportunity to invest against the grain in attractively valued stocks across the globe.
The 5% Problem: Double Jeopardy for Traditional Bond Investors
by Nathan Rowader of Forward Management,
Investors have suffered with low yields, but profited from rising bond values during the 30-year bull market for bonds. We believe the bond market is moving into a bearish phase, putting the value of existing bond holdings at risk. A variety of income-producing options are available for those who want to diversify bond portfolios and seek better yields. Historical analysis shows that a diversified portfolio would have outperformed traditional bonds during the last bear bond market and in periods of rising interest rates.
Investment Risk is the Chance of Underperformance
The measures currently used within the investment industry to capture investment risk are really mostly measures of emotion. In order to deal with what is really important, lets redefine investment risk as the chance of underperformance. As Warren Buffett has said, focus on the final outcome and not on the path travelled to get there.
The Lure of Hedge Funds
by John West of Research Affiliates,
Investors often buy what they think is exciting, sophisticated, and complex with the embedded assumption that all of these attributes will lead to greater returns. We see this today where we witness the continued explosive growth of hedge funds. But, a careful examination of the data reveals that these fancy lures fail to hook as much in excess, after-fee returns as more time tested strategies.
2013 US Financial Markets
In the fall of 2012 the S&P 500 came close to our forecast high (S&P- 1500) Last year we suggested that not only was the S&P likely to reach 1500, but also speculated that renewed bullish sentiment could take us back to the old highs of 1565. When the S&P touched 1563 a couple weeks ago, I started getting client calls complimenting my prescient forecast.
ProVise Bullets
There may still be people rushing to the Post Office this afternoon or evening to get tax returns in the mailbox. Of course, many others will file for an extension. The first extension is for six months and is automatic. However, when you file your extension, you have to send in the money you think you will owe and file form 4868. If you dont file an extension, there is a 5% per month late filing fee. An underpayment could also be charged interest, and if the amount is significantly under what is owed there could be penalties as well.
The Truth About The Impact Of Dividend Reinvesting
by Chuck Carnevale of F.A.S.T. Graphs,
What follows will be several examples of different kinds of dividend paying stocks offered in order to provide deeper insight into several commonly held notions. With each example, I will focus on how much return comes from dividends and how much comes from capital appreciation. I will also illustrate the precise benefits and effects of dividend reinvestment as it applies to different types of dividend paying stocks.
Don't Pay Too Much for That Bordeaux - Or That Bond
by Jeff Helsing of PIMCO,
The financial markets reliance on ratings agencies and benchmarks, along with regulations, can cause distortions in the value of some securities. These price distortions can create potential opportunities for some investors. Investors should consider aligning capital allocation with outcome-oriented objectives that arent influenced by credit ratings or benchmarks.
The Evidence that Emotion Dominates Market Pricing
Last week, I introduced the concept of behavioral portfolio management (BPM) as a way to build superior portfolios. BPM is built on the dynamic interplay between two investor groups and rests on three basic principles. I will discuss the first basic principle in this article, the second in a series of five.
The Theology of Inflation
We begin this week with a simple pop quiz. Is inflation good or bad? Answer quickly. I?m sorry your answer is wrong. Or rather, we can?t know if your answer is right or wrong because we are not sure what is meant by the question. We may think we know and we may be right but we can?t be sure, because the word inflation has different meanings for different people in different places and different times. In fact, even the same people in the same place and time can?t agree on a precise definition.
Minor Crisis...Not Too Many Hurt
Cyprus proved, over the last two weeks, that markets often overlook the small stuff. Very few commentators we follow saw any of it coming and the theories that sprang up in the interim (Cyprus as vassal state to Russia, return to the Cypriot pound, imminent EU break up, twin euros in circulation, utter disaster for the economy, German intransigence and Schrecklichkeit) were absurd.
Why This Economic "Recovery" is So Weak
We start today with an excellent editorial I read last week written by Mort Zuckerman, Editor-In-Chief of U.S. News & World Report. My goal every week is to do a lot of reading and summarize what Ive learned in these pages week in and week out. But every now and then I run across something so good that it just makes sense to reprint it in its entirety, even if its not my own work. Not many of my contemporaries are willing to do that, as they think it makes them look less scholarly. I dont have that problem.
Choosing an Actively Managed Fund: What Works and What Doesn’t
by Joe Tomlinson,
Few topics have been studied as closely as selecting actively managed funds that will outperform the market. Advisors who use such funds need to be confident in their choices ? and justify their methodology to clients. Here’s what the latest academic research says on this highly contentious issue.
What Will Drive the Market?
by Charlie Dreifus of The Royce Funds,
The sequester adds to the economic headwinds caused by ending the payroll tax holiday and the boost in tax rates. However, even with the sequester, total federal government outlays will rise this fiscal year. Finally, after more than a month of daily increases for a gallon of unleaded gasoline, prices are now declining. This has been of concern as rising oil and gasoline prices were yet another headwind facing the U.S. economy. (Oil prices have also declined.)
How to Invest Like Buffett
by Robert Huebscher,
Listen to Jim Cramer or his cohorts on CNBC and you’ll hear statements like, “Don’t settle for the mediocre returns of a market index!” and “It’s not that hard for investors to pick stocks that will beat the market!” Unless you possess the skills of Warren Buffett, that’s not true. But in the book Think, Act and Invest Like Warren Buffett, Larry Swedroe says you indeed can invest like Buffett ? just not by stock-picking.
A Cry for Help from Income Investors
Confronted with the stark realities of income investing now, affluent investors all over the world are rethinking their approach, notes Legg Masons just-released Global Income Survey. Yet the Survey also found income investors hungry for more knowledge and ideas -- creating opportunities for savvy financial advisors.
Happy Clients; Terrified Prospects
Four years ago, on March 9th, 2009, US stocks collapsed to a 12 year low. A financial crisis rooted in overleveraged purchases of junk (or even fraudulent) securities claimed, in quick succession, Bear Stearns, Lehman Brother, Merrill Lynch (forced into a shotgun marriage with Bank of America) and AIG. Investors panicked, selling good securities at deep discounts to fair value.
In Gold We Trust
Poorly thought out government policies hurt the formation of capital and destroy people?s trust in paper money. Leaders may have good intentions, but some of their actions show disrespect for private property and individualism. This only reemphasizes gold as an important asset class.
Investors Need to Pivot
by William Benz of PIMCO,
Fixed income investors need to think differently in the current environment. Investors may want to consider pivoting to strategies that are less focused on traditional benchmarks and more oriented to generating income and providing greater flexibility to hedge against rising rates, widening credit spreads or higher inflation.
Five Steps to Demonstrate Your Value Today
by Dan Richards,
Of the broad trends facing the financial service industry, the most powerful will be greater transparency. It will force everyone ? and advisors in particular ? to clearly demonstrate the value they provide. How advisors respond to this shift to a value-driven world will determine whether they succeed or fail.
The Outlook for Equities
It doesnt take much to get me started on a memo. In this case one sentence was enough, in an article from the February 4 online edition of Pensions & Investments, as described by FierceFinance on February 28: The long-term equity risk premium is typically between 4.5% and 5%.
M&A and Dividends Likely Drivers of the Market
by Charlie Dreifus of The Royce Funds,
The sequester adds to the economic headwinds caused by ending the payroll tax holiday and the boost in tax rates. However, even with the sequester, total federal government outlays will rise this fiscal year. Finally, after more than a month of daily increases for a gallon of unleaded gasoline, prices are now declining. This has been of concern as rising oil and gasoline prices were yet another headwind facing the U.S. economy. (Oil prices have also declined.)
Newsletter
In the latest edition of his client newsletter, Harold Evensky highlights a number of interesting bits of news, including a must-see destination for your friends, your kids and your grandkids, some advice from Warren Buffett, a tip from Albert Einstein and the latest data on hedge fund performance.
Tightening the Noose: Can the SEC and Its New Chairman Be Tougher on Wall Street?
by Team of Knowledge @ Wharton,
Although the SEC has always been the federal governments chief guardian of integrity in the financial markets, critics have a long list of grievances, including claims that the agency is too unsophisticated and too soft on wrongdoers. Assuming she is confirmed as the new SEC chairman, Mary Jo White will need almost superhuman skills to make the SEC more effective. Can she -- or anyone, for that matter -- accomplish this?
Who Cares if There's a High-Yield Bond Bubble?
High-yield bonds, or "junk bonds" as they are widely known, have received a lot of attention in recent months. Is there a high-yield bond bubble? Certainly a ton of new money has gone into high-yield bond funds over the last few years. Millions of Americans who would have never considered high-yield bonds have bought in due to near zero returns on traditional savings vehicles.
Letters to the Editor
by Various,
Two readers respond to Joe Tomlinson's article, Can Advisors Add Value Through Fund Selection?, which appeared on February 26, and a reader responds to Wade Pfau's article, Breaking Free from the Safe Withdrawal Rate Paradigm: Extending the Efficient Frontier for Retirement Income, which appeared last week.
Weekly Market Commentary
Although ecstasy reigned supreme last Tuesday as the Dow crossed into record territory, not everyone felt as if they shared in the bounty. It's at times like these that we must be mindful of the distinction between economic recovery and market recovery. Two phenomena which fly in tandem, on parallel tracks, are not always inextricably linked, and in this case the parallel disconnect is wide and obvious.
The Retirement Income Problem
The most vital and pervasive issue investors will face in the next decade is how to wring out enough income from the savings they have amassed to maintain or enhance their lifestyle. To do so, they will need to be far more flexible in their investment approach. They also must adapt to an environment for "high quality bonds" (Treasuries, Municipals and Corporates) that does not at all resemble that which they are accustomed to.
How to Keep Calm and Invest On
The market noise of today will not be going away. However, investors can gain confidence in the following wisdom of the crowd. As famous investor Benjamin Graham said, "The individual investor should act consistently as an investor and not as a speculator. Keep calm and invest on.
80's Bull Redux
We have thought for some time that the current bull market might be one of the strongest of our careers, and could potentially rival the 1980s bull market. Although this current cycles construction is quite different from the 1980s bull market, there are many aspects of this market that are curiously similar.
Freewheeling?
Ignoring threatening clouds in the distant horizon, the financial markets are wrapped in a blanket of complacency. Consider the following. The Dow Jones Index has been flirting with the 2007 record peak. Implied stock market volatility, as measured by the VIX Index, is in the basement. Junk bond yields are at record lows, compressing spreads to within shouting distance of risk-free Treasuries. Securitization is back from the dead, while the drought in M&A activity is now getting plenty of rainfall.
Smooth Returns
Harry Markopolos was working for a hedge fund of funds and attempting to put a portfolio together that would "smooth" long-term returns. In the process of marketing what his company was doing, he ran into a client who already had a money manager doing that for him. The money manager the client used was Bernie Madoff. When Markopolous looked at the long-term track record of Madoff's client, he instantly knew that it was mathematically impossible to have a return that high with as little year-to-year variance in the return. We at Smead Capital Management would like to ask a few questions.
Combining the Best of Passive and Active Investing
Should investors pay higher fees to active managers in an attempt to beat the market? Or should they instead buy cheap passive index funds or exchange-traded funds (ETFs) thereby surrendering to the compelling long-term evidence that successful money managers are few and far between and very difficult to identify. It is an important and ongoing debate because the choice between the passive or active approach to investing can have a huge impact on long-term results.
Liquidity Tiering for Higher Yields in the Tax-Free Market
In today's low-yield environment, investors need a fresh approach to managing their portfolios for higher income. Liquidity tiering provides a framework that can help you achieve both principal stability and yields sufficient to meet your goals.
Selecting Truly Active Equity Funds
In a recent Advisor Perspectives article, Joe Tomlinson reported evidence showing that 401(k) plan sponsors add value in selecting funds, but their risk-adjusted alpha is not enough to beat a comparable index portfolio. Tomlinson then pointed out the need for additional research to help advisors improve upon the fund selection process. As a step in this direction, I will report on research conducted by my firm and other academics.
You?re The Cream of the Crop: Key Findings from the 2012 Advisor Perspectives Reader Survey
by Jeff Briskin,
Experienced. Results oriented. Focused on serving the needs of individuals and families. Confident in your abilities. Eager to expand your knowledge. If this sounds like you, you're not alone. These are the traits that stand out among Advisor Perspectives readers, based on the findings of our 2012 Reader Survey.
Letters to the Editor
by Various,
A reader responds to Bob Veres' article, Comparing Advisors to Jim Cramer: Measuring your Professional Alpha , which appeared on February 5, and a reader responds to Robert Huebscher's article, Five Ways to Improve Your Investing Decision Making, which appeared last week.
The Magic of Compound Interest
by Jeffrey Saut of Raymond James,
When compound interest works in your favor, it is a blessing. When it works against you, it's a curse! That is a "Jeffreism" I learned the hard way back in the bear market of the early 1970s when I was working for a $100 per week in this business and consequently had my credit cards levered to the "max." The interest rate at the time was 18%.
Specializing in Tax-Friendly Investment Strategies
Since the turn of the century (2000) investors have not had to think much about tax-friendly investment strategies due to two major bear markets. But times have changed. The stock market is near all-time highs and many, if not all, of investors' loss carry forwards have been used up. More importantly, the Obama administration has already raised tax rates on the wealthy and the outlook is for tax increases to broaden as part of the solution to taming our debt and deficit problems. The bottom line is that investors need a new strategy for this environment.
Potential Threats to Equity Rally
by Chris Maxey, Ryan Davis of Fortigent,
Equity markets started a third consecutive year in rather impressive fashion, gaining more than 6% to date. With so much optimism in the investment community, it is always worth keeping an eye open for risks possibly overlooked. By now, it is apparent that investors are increasing their exposure towards equities with arms wide open. Data from the Investment Company Institute (ICI) estimates $39 billion flowed into equity mutual funds this year through February 13. Following outflows of $153 billion in 2012, the sudden reversal has been impressive.
Rational Temperance
by Bill Gross of PIMCO,
While the market was indeed moving in the direction of "dot-com" fever three to four years later, the Dow Jones Industrial Average at the time was a relatively anorexic 6,000, and the trailing P/E ratio was only 12x. For a central bank that was then more concerned about economic growth and inflation as opposed to stock prices, risk spreads, and artificially suppressed interest rates, the Chairman's query made global headlines, became a book title for Professor Robert Shiller and a strategic beacon for portfolio managers thereafter.
Results 3,101–3,150
of 3,362 found.
