The 10 Most Important Things I Tell Clients
Over the past couple of decades, I’ve told clients many very important things. Most of them are timeless, which is why I find myself saying the same things repeatedly. Here are the top 10, and I’ve saved my most important for last.
Boost workers' investment confidence and help meet retirement plan goals
Advice boosts workers’ confidence in choosing investments—from 35% to 65%. Learn how our industry-leading asset allocation expertise can help participants make investment choices with more confidence and help employers reach their plan goals.
From All-Weather to All-Terrain Investing for the Stormy Decade Ahead
This article explores how the addition of specific liquid alternative strategies produces an “All-Terrain” portfolio with the potential for improved long-term performance across a wider range of market environments.
The Year in Review: Wealthspire Advisors 2022 Q4 Review
Throughout this year, Wealthspire Advisors’ Investment Team has spent significant time discussing inflation and the Federal Reserve and felt it was important to pivot towards the story in financial markets for 2022, which begins and ends with fixed income.
Quantamental Investing: A Brief Primer on KCR’s Toolkits
At KCR, we believe in the Quantamental Investment approach–a strategy that leverages the most useful aspects of both quantitative investing and fundamental investing.
Amazon, Salesforce Job Cuts Are Warning Signs for Stock Prices
Tens of thousands of tech sector job cuts may not be enough to reverse the collapse in share prices, given the looming economic downturn could slash companies’ revenues far more than the cost savings they make via layoffs.
The Dangers of Monte Carlo Simulations
Probability-based retirement income strategies are highly sensitive to the capital market assumptions used in Monte Carlo analysis. Seemingly small changes in those assumptions can mean the difference between projecting a comfortable lifestyle and financial ruin.
When Old Rules Break Down, Consider a New Investing Approach
One of the biggest breakdowns has been in the relationship between stocks and bonds. Stock prices and bond prices are usually not correlated, meaning bonds can serve as the cornerstone of a hedge when stock prices waver and drop.
The Latest Look at the Total Return Roller Coaster
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $13,364 for an annualized real return of 5.8%.
Alternative Investments: The Case for Real Estate
Public and private real estate investments present a compelling opportunity in the current environment of high inflation and rising interest rates, according to Daniel Scher and Blair Schmicker from Franklin Equity Group.
The Four Unique Risks in Decumulation
Relative to the accumulation phase, strategies that mitigate the unique risks faced by retirees in decumulation are less understood and researched. By identifying and illustrating those risks, planners can better prepare clients for retirement.
Moving Averages: S&P Down 5.9% in December, Down 19.4% in 2022
Valid until the market close on January 31, 2023.
The S&P 500 closed December with a monthly loss of 5.9% after a gain of 5.4% in November. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "cash" — iShares Barclays 7-10 Year Treasury (IEF), Vanguard REIT Index ETF (VNQ), Vanguard Total Stock Market ETF (VTI), and Invesco DB Commodity Index Tracking (DBC) — down from from last month's quintuple "cash" signal.
Gold 2023 Outlook: Recession and Rates to Remain in Focus
George Milling-Stanley of State Street Global Advisors provides his outlook for gold in 2023, as well as the specific headwinds and tailwinds he expect to drive price activity moving forward.
Zooming in on Fixed Income as We Head into 2023
The Aiguille du Midi, neighboring popular Mont Blanc in the French Alps, is famous for having the highest vertical ascent cable car in the world, a vertigo-inducing ride that is equal parts scary and awe-inspiring.
They’ve Ruled Out Tail Risk
As of Friday, December 16, the S&P 500 Index is down -19.7% from the most speculative level of valuations in U.S. history – exceeding even the 1929 and 2000 extremes, based on the valuation measures we find best-correlated with actual subsequent market returns in cycles across history.
The Outlook for Clean Energy Investing
As the world economy prepares for a true transition to decarbonization, interest in renewable energy has re-emerged as an important topic for investors. This interview features Rene Reyna, who is head of thematic and specialty product strategy for the ETFs and Indexed Strategies teams at Invesco.
New Research on Tax-Advantaged Direct Indexing
As investors increasingly seek out more personalized options, many advisors are seeing direct indexing grow in popularity. Direct indexing is a type of separately managed account or SMA, where investors can express their personal values and tax preferences. The personalization and flexibility afforded by an SMA allows advisors the flexibility to manage each client’s tax situation and reflect their values. Dimensional Fund Advisors recently conducted research into the tax management benefits of an SMA. It found that a multifaceted tax management approach that goes beyond tax loss harvesting and considers tax implications at every step of the investing process can lead to more significant, longer-term gains. Here from Dimensional to discuss further is Kaitlin Hendrix, senior researcher and vice president.
In his latest memo, Howard Marks writes that the investment world may be experiencing the third major sea change of the last 50 years. Events in recent years – especially the spike in inflation and the Federal Reserve’s response – appear to have caused a reversal of the market conditions that prevailed after the Global Financial Crisis and for much of the last four decades. Howard discusses what this potentially new era could mean for lenders, especially bargain hunters.
2023 Outlook for Emerging Markets, “A year of Two halves”
Emerging Markets (EM) assets were subject to three strong headwinds in 2022, namely, China’s zero Covid-19 and real estate crisis, aggressive interest rate tightening from the US Federal Reserve (Fed), and the Russia invasion of Ukraine.
Still Too Early For A Fed Pivot
The Fed’s mandate is stable prices and maximum employment.
Optimal Risk Levels for PLIB Strategies: Personalization is Key
More balanced risk strategies in PLIBs are likely to be optimal (e.g., 40-50% equities), although the ability to personalize the risk level is important based on the household situation and preferences.
GMO’s New Asset Management Platform
When I heard that the investment management firm GMO had created a retirement planning tool to mitigate “sequence of returns” risk I looked forward to learning about it. After setting aside a stumbling block or two in its white papers, I found it to be the best platform for financial advisors I have ever seen.
Top Money Managers See Global Stocks Gaining in 2023
Some of the world's biggest investors predict that stocks will see low double-digit gains next year, which would bring relief after global equities suffered their worst loss since 2008.
The Sum of All Fears Is Falling With the Dollar
It’s been a spectacular year for the US dollar. Using the popular broad dollar index, it managed to rise to its highest level since 2002 by the end of September. Since then, the greenback has endured a peak-to-trough fall of more than 9% and continues to trend downward.
Why Emerging Market Debt?
After a challenging 2022, it is time for investors to look forward to opportunities. Emerging Markets (EM) debt stands out as one place where investors can potentially take advantage of an underutilized asset class that offers attractive yields and diversification.
Newsletter Volume 15, No. 5
“95 years ago, your crystal ball reveals: Russian debt default, LTCM fail, DotCom implosion, 9/11 attacks, financial crisis and great recession, pandemic killing millions, 3 market crashes. Would you put your money into stocks? No? You missed a 10X return.”
What Really Matters?
In his latest memo, Howard Marks weaves together some of the themes he’s explored in 2022 to explain what he believes really matters in investing and what doesn’t. He discusses the disadvantages of short-term thinking, the difference between volatility and risk, and the one word he believes defines the essence of investment excellence.
Buy Bonds, Sell Stocks
Stocks are overbought and overvalued relative to bonds.
More Bearish Market Action Before The Bull Can Run
Following the weaker-than-expected October inflation report, stocks surged on hopes the Fed will “pivot” sooner than later. As we discussed recently, a “policy pivot” is not necessarily bullish but instead suggests more bearish market action will come first.
Contrasting Protected Lifetime Income Benefits (PLIBs) Against Other Annuities (Part 2)
This article explores the efficacy of PLIBs against a retirement income strategy that does not include an annuity, as well as strategies which allocate to either a SPIA, a DIA, or a GLWB. I used a utility framework for this analysis.
What's Behind the Drop in Treasury Market Liquidity?
With the year winding down, investors might think they’ve seen it all. But one element of market dysfunction that’s largely flown under the radar is increased friction within the US Treasury market. Treasuries are experiencing a liquidity decline on the back of economic uncertainty and higher volatility, with large blocks of government debt increasingly hard to trade.
An Interview with Keith Fitz-Gerald
This week, around my trip to a far-too-cold Denver, then to Dallas, and ultimately Tulsa to spend the Thanksgiving holiday with family, Keith and I did a 45-minute "interview" via Zoom. Less an interview, perhaps, than the two old friends catching up. I was surprised how many topics Keith and I aligned on perfectly, though our few disagreements about what comes next made for a great debate.
Three Income Themes for Multi-Asset Investors in 2023
In one of the most challenging years for markets, 2022 brought persistently high inflation, aggressive central bank tightening and heightened geopolitical risks, leaving investors with few places to hide.
Amundi Downgrades ESG Funds as Sector Faces $85 Billion Hit
Amundi SA is removing the European Union’s highest ESG designation from virtually all funds that once carried it, as it joins a growing list of investment firms that have been wrong-footed by a change in regulatory guidelines in the bloc.
The Case for Annuities in Today’s Market
Advisors and their clients need to manage pressures they have not seen for 20 years: market volatility, inflation, rising interest rates and potentially higher taxes. With fixed income not holding up as a low-risk part of the portfolio, it is time to look at other strategies to protect client portfolios.