If you're like most working people, you've probably received a statement in the mail from the Social Security Administration listing your potential future benefits. Trying to figure out how Social Security arrived at those mysterious figures requires some detective work. Here, Gail Buckner, CFP, our personal retirement and financial planning strategist, attempts to crack the code. She discusses how your benefit is calculated and offers some strategies on how to maximize it.
Today, we’ll take a look at some very interesting data released by the World Bank last month, which shows that the United States still dominates the global economy by a wide margin. The US produces almost one-fourth of all global GDP, and has been at that level or higher for over two generations. This is remarkable.
On February 13th, Kim Jong Nam, the older half-brother of Kim Jong Un, the leader of the Democratic People’s Republic of Korea, was assassinated at an airport in Malaysia. This event offers insights into the “Hermit Kingdom” and shows the audacious nature of the regime.
Advisors should define risk as the probability that clients won’t meet their financial goals. Advisors should have the singular objective of minimizing this risk. This definition profoundly shifts the conversation away from volatility and losses, and toward strategies that achieve minimum required returns.
"The issue is no longer whether the current market resembles those preceding the 1929, 1969-70, 1973-74, and 1987 crashes. The issue is only - are conditions like October of 1929, or more like April? Like October of 1987, or more like July?
At the beginning of each month I like to take a look at the most recent published equity market valuations. So let’s do that today. As you review the charts, keep in the back of your mind that valuation metrics are pretty much useless in identifying market peaks but they are outstanding at helping us zero in on what the forward 10-year returns are likely to be.
40 percent of companies now in operation around the world will not exist “in a meaningful way” sometime within the next two decades. To survive, companies will need to reinvent themselves by integrating digitization into the fabric of their business strategy.
One of the hottest gifts of the recent holiday season was the Amazon Echo, which offers to ease the lives of customers by directing the system with its famous command “Alexa…” This move toward the automation of a greater percentage of our lives has a parallel in the investing world.
Rising equity prices and bond yields pose a puzzle for investors. Given equity valuations, some investors question whether the rally is peaking. This month, we examine the fundamental underpinnings of a steady economy, growth of company earnings and revenue, and pent-up consumer spending.
One of the key themes I and my strategy colleagues highlighted in our 2017 outlook was the regime change from monetary policy being the only game in town to fiscal policy taking at least one of the reins.
Shundrawn Thomas serves as Northern Trust’s executive vice president, head of funds and managed accounts group. I spoke to him about his annual president’s perspective on the ETF industry, which was just released.
The Fed’s signals that rate increases could soon come seem to fall on deaf ears. U.S. stocks continue to climb as bond yields decline. Although recent data reflect accelerating economic growth, which is necessary to justify frothy valuations, structural challenges and unclear policy outcomes remain. Caveat emptor.
Dramatic growth offers significant opportunity for the index fund industry, but not without its risks. As assets move from active to passive management, what systemic danger lurks? What market disruptions might occur with a concentration of assets backed by monolithic indexes on autopilot?
Fama and French’s 1992 seminal research, which identified the value and size factors, was met with skepticism. Even the authors questioned the underlying economic rationale for their findings. With a quarter century of data, let’s look back and see if the skepticism was justified. Have value and small-cap outperformed?
Despite their perceived differences, compliance, visibility and oversight are all directly related. No business can run effectively without them, and financial services firms should ensure that these three essential components have a central place in the company's operations. To that end, what can business leaders do to improve these three areas of importance?
All of the US equity indices made new all-time highs again this week. Treasuries were the biggest winner. A drawdown of at least 5-8% in SPX is odds-on before year year end, but there are a number of compelling studies suggesting that 2017 will probably continue to be a good year for US equities.
Investors often ask us which of the two primary bond market risks—interest rate or credit—they should focus on in 2017. Our answer? Both of them—and the interaction between the two.
President Trump is expected to announce a revised tax cut plan soon. In the meantime, it’s worth revisiting how the sausage gets made in Washington. By law, tax code changes must originate in the House of Representatives, and the Senate will have its say.
Equity markets have increased since the U.S. elections for two principal reasons: optimism over a pro-growth legislative agenda from Donald Trump and improving U.S. and global economic and earnings growth.
We touch on several bases today. We begin with the Heritage Foundation’s annual Economic Freedom Index, which plunged during the eight years of the Obama presidency. From there, we look at some recent economic data which is quite encouraging overall.
At a recent industry conference, we were confronted by a chart, a presentation and a song. In early 2017, we find ourselves in an investment world where the merit of stock picking and "active" portfolio management are challenged regularly, which has contributed to a mass exodus of assets from "active" funds to low-cost index portfolios.
Ross Glotzbach is head of research and a principal at Southeastern Asset Management, one of the most respected value managers. In this interview, he discusses his investment outlook in an era of political and economic uncertainty.
Nearly all analysts who write about the housing bubble have focused on the purchasing madness that occurred. While this is important, it overlooks the refinancing insanity of 2004-2007. This refinancing lunacy will devastate mortgage and housing markets for years to come.
Today we come to part 3 of my tax reform series. So far, we’ve introduced the challenge and begun to describe the main proposed GOP solution. Today we’ll look at the new and widely misunderstood “border adjustment” idea and talk about both its good and bad points
In the month of January, the most important factor correlation to performance of developed market stocks has been dividend yield (DY).
In a series of articles we published in 2016, we show that relative valuations predict subsequent returns for both factors and smart beta strategies in exactly the same way price matters in stock selection and asset allocation.
Surprising many investors and pundits alike, the S&P 500 posted a solid return for 2016, finishing the year up close to 10%. If investors never looked at their statements, one might be naïve to how much markets zigged and zagged throughout the year.
Since 1995 mid-cap stocks have outperformed large- and small-cap stocks. Investors that are under-allocated to the mid cap asset class are potentially accepting greater risk AND missing out on available return. Mid-cap companies often exhibit the nimbleness and growth potential of small caps with the stability of large caps while accepting, but potentially, reducing the risks of both.
ETFs continue to play a highly disruptive role in money management. RBA has embraced this trend by employing what we refer to as Pactive™ Management, which is the active allocation, whether strategic or tactical, of passive investment instruments such as ETFs, stock baskets, and index funds. These Pactive™ portfolios have quickly become the fastest growing part of our business.
There is little argument that Exchange Traded Funds, more commonly referred to as “ETF’s” have and will continue to change the landscape of investing.
Back in November, I wrote that domestic carriers are likely to see the new president—himself the former owner of the now-defunct Trump Airlines—as a strong partner in several key areas. Although a couple of airline CEOs have recently expressed strong opposition to some of Trump’s protectionist immigration policies, yesterday’s meeting appeared to be constructive, with the president telling the group he would soon be announcing something “phenomenal in terms of tax and developing our aviation infrastructure.”
Just as I do with the economy, I review the market each month for warning signs of trouble in the near future. Although valuations are now high—a noted risk factor in past bear markets—markets can stay expensive (or get much more expensive) for years and years, which doesn’t give us much to go on timing-wise.
When most investors think of diversification, they think about including stocks and bonds in their portfolio, or US and international investments. Fewer investors think about diversifying among investment vehicles — such as active mutual funds, factor-based exchange-traded funds or passive benchmark strategies.
After a “wild ride,” closed-end funds with Master Limited Partnerships may present opportunity to investors seeking income, says Jason Kephart of Morningstar.
Investing always involves some risk. Right now, US macro is not one of them.
Volatility is low, but political uncertainty is high. Russ discusses what is causing this and whether it can continue.
This month's Absolute Return Letter is a follow-up to last month's letter. In January I argued why investors could be facing a much more hostile Fed this year than generally perceived, and this month we look at the implications of that; why beta risk should be de-emphasized in 2017, and where we spot better opportunities.
Over the last eight years, with US interest rates at rock bottom thanks to the Fed, the rest of the world has borrowed a huge amount of dollars – about $4 trillion according to the Bank for International Settlements. During that same time, the US dollar has soared against a basket of foreign currencies.
Diversification has been called the only free lunch in investing. Many investors consider total-market funds, such as Vanguard’s Total Stock Market Index Fund (VTSMX), to be not only the most efficient (based on modern financial theory and, specifically, the efficient markets hypothesis) but also the most diversified. Leaving aside the question of whether Vanguard’s fund is the most efficient portfolio, let’s evaluate whether it’s the most diversified.
Follow my tips for a clear, concise and newsworthy press release.
This week’s letter is going to be an examination of academic economics today and why it fails to explain reality, and I’ll point readers in a direction that can offer a more fruitful explanation of how the economy really works. I readily accept that I will be drummed out of most economists’ Lamb’s Book of Life for espousing too many heresies of the first order. I should hasten to say that much economic research is quite useful and does help to explain how the world works. It is just certain specific branches of economics that have been problematic, but these are the branches that have most influenced government and Federal Reserve policy.
Renewable energy is growing and offers potential opportunities for investors, but also challenges. Learn more about what investors may need to know.
European equities have been in the tank for years, as the region has struggled with lackluster growth since the 2007-2008 financial crisis. But just as it appears that European stocks may be poised to benefit from higher global economic growth levels and an uptick in earnings, potential fallout from national elections...
In the latest edition of “Global Macro Shifts,” the Templeton Global Macro team explores Latin America’s failed experiments with populism and the important lessons those experiences have for the developed world.
In his roundup of our latest Investment Forum, Neil Dwane, Global Strategist for Allianz Global Investors, highlights the top themes driving markets and economies – including China’s growing role in global indices, Trump’s ability to disrupt the status quo, Europe’s super-election cycle and the “hunt for income” going global.
It goes without saying that there is a sharp contrast between the economic views of the incoming administration and those of the Federal Reserve. President Trump, and most of the individuals who voted for him, sees a weak economy, devastated by job losses in manufacturing. The Federal Reserve sees an economy nearing full employment. So who’s correct?
