Last week’s top conversations were started by Brian Battle and Scott MacKillop. They generated thoughtful discussions on what every advisor should know about bonds and whether risk tolerance can be measured by questionnaires.
APViewpoint hosted another successful webinar on June 16, What Every Advisor Should Know About Bonds. In this presentation Brian Battle, director of the Analytics Group at the Performance Trust Companies, discussed fixed-income allocations that seek to avoid exposing investors to excessive risks. Battle explained why nobody can reliably predict future interest rates and argued that yield and duration are inappropriate measures for long-term investors. He then introduced a fixed-income investment strategy based on forward-looking analytics and explained why advisors should focus on three things when analyzing a bond: the coupon payment, the change in market value and the re-investment rate. Battle is answering questions about his presentation in this follow-up conversation; a replay of the webinar can be viewed here.
Scott MacKillop’s Are Risk Tolerance Questionnaires a Silly Waste of Time tallied 44 comments as it continued into its second week of active discussion. Advisors discussed the strategies they use and the challenges they face integrating risk tolerance into their practices. Advisors agreed that it is very difficult to construct a strategy that takes on enough risk to enable a client to achieve their goal, but not so much that the client is unable to tolerate losses during challenging markets. To address this issue, some advisors focus on risk profiling by engaging clients in conversations about the possibility of significant declines in portfolio value. However, citing the difficulty of accurately assessing risk, others argued that it is more effective to engage clients in an “ongoing education process that helps clients become better long-term investors.”
APViewpoint will be hosting its next CE eligible webinar, Exposing the “Active Risks” of Passive Portfolios, on Thursday, June 30, at 4:15 PM ET. In this presentation ReSolve Asset Management CEO Adam Butler will explain why most investors’ asset allocation strategies inadvertently take an extreme active stance, and he will review a unique global asset allocation strategy that allows advisors and investors to truly invest passively. You can register for the webinar on the APViewpoint events page here.
Marianne Brunet is a financial markets analyst with Advisor Perspectives.
