The importance of simplifying accounts
Posted by Whealthcare Planning LLC on Wed, 05/27/2020 - 09:08
There are many reasons you may have multiple investment and banking accounts.
- Job changes resulted in multiple retirement plans located at different institutions
- You started investing in companies or mutual funds by directly buying a small number of shares over a long period of time
- A family member gifted shares of stock to you
- A bank offered great rates on savings or loans that you just could not pass up
- You don't trust the financial services industry, and decided to keep multiple accounts to decrease the risk of an institution going out of business or someone stealing your money
These all seemed like good ideas at the time, but there are many reasons you should simplify.
Sticking to Principles
Posted by Dimensional Fund Advisors on Tue, 04/28/2020 - 11:15
Financial downturns are unpleasant for just about everyone. For investors, sticking to core principles can help.
A famous American football coach once said, “You don’t rise to the occasion, you sink to the level of your training.”1 The implication is that, in times of great stress, the most reliable recipe for success is sticking to a set of fundamental principles.
From February 20 to March 20, the S&P 500 Index returned –37.4%, with daily returns ranging from –12.0% to +9.4%. A drop of nearly 40% in the stock market combined with a spike in volatility can make many investors reconsider their investment approach. Some might suddenly find stock-picking approaches more alluring. After all, who has not heard the claim that a volatile market is precisely the environment in which many traditional active managers thrive? But is there any truth to this claim?
What is the Fed doing and what does it mean for fixed income?
Posted by Contributors David Lebovitz, Alex Dryde, Jack Manley - JPMorgan Asset Management on Thu, 03/26/2020 - 08:46
What has the Fed done?
The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity. In addition to lowering the Federal Funds rate to a range of 0-0.25%, the Federal Reserve has restarted its quantitative easing program (QE), expanding the mandate to include commercial mortgage backed securities (CMBS) and putting no limit on the size of asset purchases. The Fed has also restarted the term asset backed securities loan facility (TALF), included municipal bonds as eligible collateral at the Money Market Mutual Fund Liquidity Facility (MMLF) and Commercial Paper Funding Facility (CPFF), and created both the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCP).
No 401(k)? No Problem
Posted by Kaitlyn Klernan, FINRA on Wed, 02/26/2020 - 13:59
Saving for retirement can be daunting, so it’s no surprise that employer-sponsored retirement plans can be a key stepping-stone into the world of investing—and to a healthy retirement nest egg.
While that’s great for those with access to an employer-sponsored plan, such as a 401(k), 403(b) or 457 plan, those without access to a plan at work may find themselves struggling to figure out where to begin saving for the future.
That’s particularly true for millennials. About 72 percent of non-investing millennials are employed full-time, but don’t have access to an employer-sponsored plan, or are not employed full-time, according to a recent study by the FINRA Investor Education Foundation and CFA Institute. That compares to just 21 percent of millennials currently investing with retirement-only accounts.
But the lack of access to an employer-sponsored plan or to full-time employment doesn’t mean you can’t save for retirement. In fact, saving for the future can be one of the best ways to use your money, no matter your current employment status.
“While employer-sponsored retirement plans are fantastic tools to help people save for retirement, there are plenty of options for those who don’t have access to one,” said Gerri Walsh, President of the FINRA Foundation.
Here’s a look at your options:
What does the coronavirus mean for investors?
Posted by Alex Dryden, Jennie Li, Meera Pandit - JPMorgan Asset Management on Tue, 02/04/2020 - 08:07
Financial markets have fallen sharply on concerns of the coronavirus, a respiratory illness first identified in Wuhan, China, spreading globally. While the headlines have been worrying, and no loss of human life is insignificant, it is important to understand the facts. The framework we have adopted for discussing this virus is to consider the three components of a pandemic—contagion, severity and treatment—and how the evolution of those components can shift the market narrative.
How Markets Work and the FAANG Mentality
Posted by Dimensional Fund Advisors LP on Fri, 01/03/2020 - 08:16
Is the market getting by with a little help from the FAANGs? And does their performance stand out historically? Investors may be surprised that it's common for a subset of stocks to drive a sizable portion of market returns.
The stocks commonly referred to by the FAANG moniker—Facebook, Amazon, Apple, Netflix, and Google (now trading as Alphabet)—have posted impressive gains through the years, with all now worth many times their initial-public-offering prices. The notion of FAANG stocks as a powerful group holding sway over the markets has sunk its teeth into some investors. But how much of the market’s recent returns are attributable to FAANG stocks? And does their performance point to a change in the markets?
Three Possible Paths for Fed Interest Rate Policy in 2020
Posted by Eric Winograd, Sr. Economist at AllianceBernstein on Wed, 12/18/2019 - 11:23
The US Fed held rates steady in December and plans to continue that stance through 2020. But a lot can happen to change the Fed’s mind—after all, it entered 2019 expecting to hike rates and ended up with three cuts. What does 2020 have in store?
The outlook is unusually cloudy. Geopolitical events like the US-China trade war could reignite, and the looming US elections, with every House seat, 35 Senate seats and the presidency on the ballot, could leave the US economy and financial markets on volatile ground.
Given the substantial amount of uncertainty, we don’t think it’s practical to put a single forecast on the Fed’s policy actions for 2020. We think a better approach is to establish a range of scenarios and what the Fed might do in each case. As the year progresses, we can better evaluate which path the US economy is on and update expectations accordingly.
As we see it, there are three main paths that could influence the Fed’s next moves (Display).
What Happens When You Fail at Market Timing
Posted by Dimensional Fund Advisors on Mon, 12/09/2019 - 14:16
It’s hard to predict the best days in the markets, and the cost of missing them can be high.
Resources We Use To Stay Current for Our Clients
Posted by Elizabeth Thorley on Mon, 11/11/2019 - 14:17
When Megan Rinaudo joined our firm earlier this year as a financial advisor, she immediately asked me for resources that would help her continue to expand her knowledge of financial investing and the myriad of factors that affect its various outcomes.
As I prepared a list for her, it occurred to me that clients might be interested in knowing what resources I use to keep up-to-date and to be in the best position to offer sound financial advice. I’m not talking strictly about investing, either. Wealth management is about looking at a bigger financial picture, not just buying various investment products. Understanding many factors helps me to do appropriate analyses and make recommendations based on my findings.
Quantifying the Value of Financial Advisors
Posted by Elizabeth Thorley on Thu, 10/10/2019 - 11:47
In a successful financial advisor-client relationship, one would hope the value of the advice would be self-evident. In other words, if clients didn’t recognize a benefit of the relationship, they likely would not remain clients.
However, can that value be quantified? Some relatively recent studies by prominent financial organizations were designed to do just that.