Damon Ridley • FSC Securities Corp.
- The efficient frontier fails the test of time by Linda Ferentchak
- Wage growth mixed amid “just right” employment report
- Market high? Pie in the sky by Ian Naismith
- Maintaining a high-profile practice (Marlow Felton, Chris Felton, Transamerica Financial Advisors Inc.)
Marlow Felton, Chris Felton • Transamerica Financial Advisors Inc.
- A Millennial’s perspective: How we really feel about money and investing by Nick Halle
- The continuous bid under the market
- The force of Supply at major tops in the U.S. equity market by Tracy L. Knudsen, CMT
- Working a structured referral process (Don Meredith, Lincoln Financial Advisors Corp.)
So how do you value the share price of stock for a given company? In other words, what is the intrinsic value of a given stock? Generally speaking, a stock is valued based on the company’s current financial state and what the market believes the company’s future financial state will look like. https://carnick.com/
Marlow Felton, Chris Felton • Transamerica Financial Advisors Inc.
- A Millennial’s perspective: How we really feel about money and investing by Nick Halle
- The continuous bid under the market
- The force of Supply at major tops in the U.S. equity market by Tracy L. Knudsen, CMT
- Working a structured referral process (Don Meredith, Lincoln Financial Advisors Corp.)
So how do you value the share price of stock for a given company? In other words, what is the intrinsic value of a given stock? Generally speaking, a stock is valued based on the company’s current financial state and what the market believes the company’s future financial state will look like. https://carnick.com/
Mercer Capital's Value Matters™ | Issue 4 2020Mercer Capital
Mercer Capital's Value Matters™, published 6 times per year, addresses gift & estate tax, ESOP, buy-sell agreement, and transaction advisory topics of interest to estate planners and other professional advisors to business.
The under-performing of value stocks and lowering of interest rates has compelled the investment managers to re-rate their strategies. Download the report by investment research experts at Aranca on value investing here!
Threadneedle investments. perspectivas y visión general de los mercados en 20...Observatorio-Inverco
Sección del Observatorio Inverco con informes de mercado de las gestoras de fondos de inversión. Threadneedle Investments. Perspectivas y visión general de los mercados en 2013. Diciembre 2012.pdf
Five years after the worst economic crisis of our lifetimes, we are still feeling the after-shocks around the world.
Our recent financial past seems to herald one certainty for our collective
financial future: The investment world we grew up with has changed utterly.
Conventional wisdoms shaped by decades of high-return investing — first in equities from 1982 to 2000, then in fixed income markets over most of this century — need to be reexamined, revised, or even scrapped.
John Gutfranski, CFP, AIF, CRPC & Debra White Stephens, CFP – Proactive Advis...Proactive Advisor Magazine
John Gutfranski & Debra White Stephens • Cetera Advisor Networks LLC
- Is modern portfolio theory seriously flawed? by Linda Ferentchak
- Budget deficit on track for six-year low
- Three approaches to client acquisition (Chuck Bigbie, Geneos Wealth Management)
Matthew Gaude • FSC Securities
- Gaining the peer-to-peer advantage: The 2015 NAAIM annual conference highlighted the importance of collaboration by Linda Ferentchak
- Debate over valuations heats up
- Fundamentalists vs. technical analysts by Martha Stokes, CMT
- Marketing the unrealized potential of 403(b) plans (Ryan Finnell, Retirement Tax Advisory Group)
Phylyp Wagner & Matt Quattlebaum • H. Beck
- How often should you review your investment returns? The results may surprise you by Jerry Wagner
- The most scrutinized Fed rate hike ever?
- Recent Q1 highs lacked “oomph” by Tony Dwyer
- Expanding the family business tradition (Jeff Pesta, LPL Financial)
Johnathon Davis • Retirement Tax Advisory Group Inc.
- Profiling ultra-high-net-worth clients by Katie Kuehner-Hebert
- Will weak jobs numbers delay Fed rate hike?
- Why you have way too much invested in U.S. stocks by Meb Faber
- Building a “niche” into a practice focus (Phylyp Wagner, Matt Quattlebaum, H. Beck)
Mercer Capital's Value Matters™ | Issue 4 2020Mercer Capital
Mercer Capital's Value Matters™, published 6 times per year, addresses gift & estate tax, ESOP, buy-sell agreement, and transaction advisory topics of interest to estate planners and other professional advisors to business.
The under-performing of value stocks and lowering of interest rates has compelled the investment managers to re-rate their strategies. Download the report by investment research experts at Aranca on value investing here!
Threadneedle investments. perspectivas y visión general de los mercados en 20...Observatorio-Inverco
Sección del Observatorio Inverco con informes de mercado de las gestoras de fondos de inversión. Threadneedle Investments. Perspectivas y visión general de los mercados en 2013. Diciembre 2012.pdf
Five years after the worst economic crisis of our lifetimes, we are still feeling the after-shocks around the world.
Our recent financial past seems to herald one certainty for our collective
financial future: The investment world we grew up with has changed utterly.
Conventional wisdoms shaped by decades of high-return investing — first in equities from 1982 to 2000, then in fixed income markets over most of this century — need to be reexamined, revised, or even scrapped.
John Gutfranski, CFP, AIF, CRPC & Debra White Stephens, CFP – Proactive Advis...Proactive Advisor Magazine
John Gutfranski & Debra White Stephens • Cetera Advisor Networks LLC
- Is modern portfolio theory seriously flawed? by Linda Ferentchak
- Budget deficit on track for six-year low
- Three approaches to client acquisition (Chuck Bigbie, Geneos Wealth Management)
Matthew Gaude • FSC Securities
- Gaining the peer-to-peer advantage: The 2015 NAAIM annual conference highlighted the importance of collaboration by Linda Ferentchak
- Debate over valuations heats up
- Fundamentalists vs. technical analysts by Martha Stokes, CMT
- Marketing the unrealized potential of 403(b) plans (Ryan Finnell, Retirement Tax Advisory Group)
Phylyp Wagner & Matt Quattlebaum • H. Beck
- How often should you review your investment returns? The results may surprise you by Jerry Wagner
- The most scrutinized Fed rate hike ever?
- Recent Q1 highs lacked “oomph” by Tony Dwyer
- Expanding the family business tradition (Jeff Pesta, LPL Financial)
Johnathon Davis • Retirement Tax Advisory Group Inc.
- Profiling ultra-high-net-worth clients by Katie Kuehner-Hebert
- Will weak jobs numbers delay Fed rate hike?
- Why you have way too much invested in U.S. stocks by Meb Faber
- Building a “niche” into a practice focus (Phylyp Wagner, Matt Quattlebaum, H. Beck)
Chris Gurnee • Foresters Equity Services Inc.
- 85,000 on the Dow: Pipedream or realistic possibility? Book review by David Wismer
- European stocks continue on torrid pace
- Risk on, until it isn’t by Jeanette Schwarz Young
- Managing 403(b) referrals in a tight-knit academic setting (Johnathon Davis, Retirement Tax Advisory Group)
Bob Pearson • Transamerica Financial Advisors Inc.
- Experts need experts: 10 questions to ask third-party money managers by Kellye Whitney
- Do record margins pose market threat?
- “Rule of 240” compounding by Ron Rowland
- Hot-button topics drive seminar attendance (Matthew Gaude, FSC Securities)
Ryan Finnell • Retirement Tax Advisory Group
- A "living in the moment" guide to investing by Jerry Wagner
- Sell in June and go away?
- Market “truths” subject to change by Rob Hanna
- Client appreciation: A sound investment (Jim Bowen, LPL Financial)
Don Meredith • Lincoln Financial Advisors Corp.
- The Millennial obsession by David Wismer
- Global decline in oil prices leads to “Fracklog”
- VIX ETFs not right for investors by Tom McClellan
- A generational shift in target marketing (Bryce Winkel, Transamerica Financial Advisors Inc.)
Jerry Ganz • Packerland Brokerage Services
- Can lower returns lead to more money in retirement? The impact of sequencing and volatility on portfolio value by David Witkin
- Jump in Swiss franc triggers short-term losses and long-term uncertainty
- Crude oil’s message for the stock market by Tom McClellan
- Growing a referral network (Trish Beine, The Strategic Financial Alliance)
Brian Glaze & Larry Ware, CRPC, CLTC – Proactive Advisor Magazine – Volume 5 ...Proactive Advisor Magazine
Brian Glaze & Larry Ware • LPL Financial
- Why hasn’t the Efficient Market Hypothesis disappeared? by Linda Ferentchak
- Climbing U.S. dollar makes exports less competitive
- The seasons of the stock market by Paul Desmond
- Selling proposition: "Plan-based investing" (Jerry Ganz, Packerland Brokerage Services)
Jeff Pesta • LPL Financial
- Is it time to retire your strategy, manager, fund, or ETF? by Dave Moenning
- Dollar strength has uncertain implications
- The Anchored Momentum Indicator by Ron Rowland
- Converting positive feedback into new business (Steve Molesky, Kalos Capital Inc.)
Trish Beine • The Strategic Financial Alliance
- Dissing the investor by Linda Ferentchak
- Ratio of gold to oil hits levels of the 1990s
- What will the next bear market look like: Grizzly or Teddy? by Marshall Schield
- Frequency of client touches leads to referrals (Randy Kerns, Voya Financial Advisors, Inc.)
Mike Jones • ProEquities, Inc.
- Bucket investing with risk-managed portfolios by David Varadi, Jerry Wagner, J.D., George Yang, Ph.D. & CFA
- Employment increases set new record
- Referrals fueled by process management (James Franke • Harbour Investments, Inc.)
Nancy Hairsine • Foresters Equity Services, Inc.
- How do you anticipate the unexpected? by Jerry Wagner
- Record-setting Fed funds rate policy continues
- Building 360-degree relationships with clients and prospects (James Hamer, Global View Capital Management)
John McGonagle • EPI Advisors, LLC
- Understanding the relevance of risk-adjusted returns by Dave Walton
- Strongest jobs gain since 2012 surprises markets
- Building stronger visibility for an advisory firm (Rodger Sprouse, Titan Securities)
Katie Williams, AIF, CRPC, CRPS, CFP • LPL Financial
- Women & investing: Is this time different? Why the message of active investment management should resonate with female prospects by Greg Gann
- Dow Theory says market divergence is troubling
- Sentiment readings as a market indicator by Jeanette Schwarz Young
- The soft sell of cross-marketing (Rod Smith, National Planning Corporation)
Randy Kerns, CIC, ChFC • Voya Financial Advisors Inc.
- Why passive investors get hammered by Mike Posey
- Can it really be earnings season already?
- What oil's plunge and the strong Dollar may mean for 2015 by Jeanette Schwarz Young
- Active management as a practice differentiator (John McGonagle, CFP, CRPC, Asset Architects LLC)
Journal of Applied Corporate Finance • Volume 22 Number 2 A Mo.docxpriestmanmable
Journal of Applied Corporate Finance • Volume 22 Number 2 A Morgan Stanley Publication • Spring 2010 1
It Ain’t Broke: The Past, Present, and Future of Venture Capital
BT
by Steven N. Kaplan, University of Chicago Booth School of Business
and NBER, and Josh Lerner, Harvard Business School and NBER*
he U.S. venture capital (VC) industry is currently
subject to a great deal of uncertainty and contro-
versy. Some observers and practitioners believe
that the VC model is broken and that the U.S.
VC industry needs to shrink.1 In this paper, we put the U.S.
VC industry into its historical context, assess the current state
of the VC market, and discuss the implications of that history
and the current conditions for the future.
We begin by describing the fundamental problem that
entrepreneurs face and VCs need to solve in order to invest
successfully. There is a great deal of evidence to support what
is now a highly developed theory of how the U.S. VC model
provides an efficient solution to this basic problem of entre-
preneurial finance. And there is little doubt that the U.S.
venture capital industry has been very successful. A large
fraction of IPOs, including many that are now among the
most successful public companies in the world, have been
funded by VCs. And, where possible, the U.S. VC model has
been copied around the world.
Next we look at the historical patterns of commitments
to U.S. VC funds and investments in companies by those
funds. U.S. VC investments in companies have represented
a remarkably constant 0.15% of the total value of the stock
market over the past three decades—the period for which we
have reliable data. Commitments to VC funds, while more
variable, have been consistently in the 0.10% to 0.20% range.
These percentages have not changed in recent years.
Third, we consider the historical record on VC fund returns,
paying particular attention to returns of post-2000 “vintages.”
Contrary to the popular impression, we do not find that returns
to VC funds this decade have been unusually low (or high)
relative to the overall stock market. This is true despite the
relatively low number of IPOs. Overall, VC investment and
returns have been subject to boom-and-bust cycles over time.
Based on our historical analyses, we make some observa-
tions about the current situation and consider what is likely to
happen going forward. The level of commitments to and the
investment pace of VC funds since 2002 have been consistent
with the long-term historic averages. At the same time, the
returns relative to the overall stock market appear to have
been roughly average. This does not suggest to us that there
is too much money in U.S. VC, or that the VC model is
broken. Instead it appears to reflect the natural evolution of
a relatively competitive market.
In fact, given the unusual and unexplained paucity of IPOs
between 2004 and 2007, we argue there is more upside than
downside for the VC vint ...
Compared to equities, bonds at first glance can appear like a throwback to your grandparent's days, but this month we take a look at how bonds may help mitigate risk, and the role they play in a well-diversified portfolio.
Can Small Cap Stocks Weather the Storm?Susan Langdon
With recession concerns intensifying in the wake of the COVID-19 pandemic, investors may be wondering whether small cap stocks are poised to struggle. Are small companies more vulnerable now than they have been during other periods of economic distress? And what are the implications for the size premium?
Rich Ralston • WRP Investments, Inc.
- The perils of predictions by David Wismer
- Will September be the cruelest month?
- Why fee-based active management works (Jim Mardock, Transamerica Financial Advisors, Inc.)
Kimble Johnson • LPL Financial
- Does your investing suffer from a lack of dimensionality? by Jerry Wagner
- Bright spots on the housing front
- Opening the 401(k) door (Daniel Namey, H. Beck, Inc.)
Victor Gadoury, CLU, ChFC • LPL Financial
- Active investment managers at NAAIM believe their way is better by Susan Baber and David Wismer
- NASDAQ Composite poised to break all-time levels
- The trend-following play by Dave Landry
- Marketing in a multi-target sales process (Katie Williams, LPL Financial)
Rod Smith • National Planning Corporation
- What is your investment style? by Ron Rowland
- Solid, if unspectacular, full-year 2014 GDP—even as Q4 disappoints
- What volatility derivatives can tell you about the stock market by Lawrence G. McMillan
- Promoting a partnership approach (Brian Glaze & Larry Ware, LPL Financial)
Rodger Sprouse • Titan Securities
- Swimming with the sharks by Linda Ferentchak
- Oil price decline has divergent impact on stock sectors
- Adapting business practices for the next generation of clients (Robert Kinnun, Madison Avenue Securities, Inc.)
Robert Kinnun • Madison Avenue Securities, Inc. (“MAS”)
- Growth of passive index investing increases the need for active management by Linda Ferentchak
- Technology sector tops Q3 earnings season
- Brokerage options: an "instrument-rated" approach to 401(k) plans (Mike Jones, ProEquities, Inc.)
Steve Redelsperger • Cadaret, Grant & Co., Inc.
- Risky business: How to create a better investor behavioral profile by Kellye Whitney
- October lives up to volatility reputation
- Creating tax-advantaged financial strategies (Gary Strawn, Transamerica Financial Advisors, Inc.)
Tu Bui • Transamerica Financial Advisors, Inc.
- Millennials and risk management by Katie Kuehner-Hebert
- High yield sector shows divergences
- Passionate about paying it forward (Nancy Hairsine, Foresters Equity Services, Inc.)
James Hamer • Global View Capital Management, LTD
- What does alpha have to do with the weather? Understanding the "seasonal performance" of actively managed strategies using market type by Dave Witkin
- Conflicting data continues to present mixed economic picture
- Active management: a good fit for cultural attitudes (Jong Oh, FSC Securities Corporation)
Jong Oh • FSC Securities Corporation
- Market philosophy: where active management begins by Linda Ferentchak
- U.S. bull market "long-in-the-tooth" - or is it?
- Technology enhances firm and client communications (Rich Ralston, WRP Investments, Inc.)
Joe Wirbick • J.W. Cole Financial, Inc.
- Diversification and the active manager by Linda Ferentchak
- Germany 2-year bond yield falls to negative territory
- Balancing active and passive investment strategies (Gary Ziegler, Transamerica Financial Advisors, Inc.)
Jay Blanchard • NEXT Financial Group, Inc.
- Tackling the herd through sentiment indicators by Linda Ferentchak
- Conflicting data adds to market uncertainty
- Social Security strategies as prospect "hot buttons" (Richard D'Ambola, Questar Capital Corporation)
Richard D'Ambola • Questar Capital Corporation (QCC)
- When history rhymes: Identifying realistic estimates of future investment strategy performance by Dave Walton
- Buybacks slowing while CEO confidence remains high
- Outsourcing to increase productivity (Steve Miller, Transamerica Financial Advisors)
Steve Miller • Transamerica Financial Advisors
- Active management in plain English: An advisor's perspective by Greg Gann
- Spike in VIX briefly shatters market calm
- Making a 10-year succession plan work (John Gutfranski & Debra White Stephens, Cetera Advisor Networks LLC)
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
NO1 Uk Black Magic Specialist Expert In Sahiwal, Okara, Hafizabad, Mandi Bah...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
1. May 14, 2015 | Volume 6 | Issue 7
Active investment management’s weekly magazine
Wage growth mixed amid
“just right” employment report
The Efficient
Frontier fails
the test of
time
Maintaining a high-profile
practice
Illusion of current market highs
Damon Ridley
Beyond MPT
An active way to diversify
2.
3. Advisor perspectives on active investment management
Dubuque, IA 52001 | 800.548.2993 | americantrustretirement.com
A solution different from
any other.
• Open architecture platform
• Active and tactical portfolios
• §3(38) investment management services
• Discretionary trustee services
• 170 PLANSPONSOR Best in Class awards
since 2008
Request a copy of Ten Reasons Why You Should
Partner with American Trust Retirement!
Simply better retirement.
Simply better partner
Mutual funds:
The tip of the iceberg
When most clients hear about active management
they immediately think about an actively managed
mutual fund, the kind of thing brokers have been
telling them about throughout their investment
lives. Our approach is very different, as we actively
manage their entire portfolio,blending different active
strategies in line with risk profiles and investment
objectives. The volatility of the last 15 years has
demonstrated that a different strategy is required—
that strategy is active management.
LOUD & CLEAR
Mike Zimmerman • Lancaster, PA
J.W. Cole Advisors • Sequinox
3May 14, 2015 | proactiveadvisormagazine.com
LOUD & CLEAR
5. o understand the investment Efficient
Frontier, it helps to go back to its origin. In
1952, economist Harry Markowitz pub-
lished an investment model that became
known as Modern Portfolio Theory. One ele-
gant aspect of the model that transformed port-
folio design was the development of an efficient
frontier to balance risk and return. Markowitz
looked at the effect of allocating percentages of a
portfolio between bonds and equities. Graphed
on a risk (standard deviation) and mean return
basis, the result was a fishhook-shaped frontier
that, based on historical data prior to 1952,
showed a blend of 40% bonds to 60% equity
allocation produced a higher return at a roughly
comparable risk level to a 100% bonds position.
The “hook” is the element that makes
the Efficient Frontier so intriguing. It clearly
continue on pg. 11
T
Figure 1
illustrates that a blend of stocks and bonds can
potentially improve the risk/return balance
of a portfolio—achieving higher returns than
a conservative all-bond portfolio without
substantially increasing risk, as measured by
standard deviation.
Figure 1 shows a portfolio composed of
the Barclays Capital Aggregate Bond Index
and S&P 500 Index allocated in 10% portfo-
lio increments using mean/average standard
deviations and returns over the 65-year period
from 1950 to 2014. The circle indicates the
point at which the portfolio is invested in 60%
equity/40% bonds.
Risk for the 60/40 portfolio is slightly more
than a 100% bond portfolio, but annual return
has increased from 6.47% for the 100% bond
portfolio to 9.95% for the blended approach,
indicating a considerably more efficient port-
folio in terms of risk/return. In Figure 1, it
appears that Markowitz’s Efficient Frontier still
holds true 60 years later.
Or does it?
The problem with the Efficient Frontier
is that it is a moving target. If one looks at
the frontier between bonds and equities over
10-year intervals, which is much more repre-
sentative of the average investor’s time frame,
the highest return for the lowest risk ranges
from 100% bonds to 100% equity. That’s not
very efficient.
Figure 2 was first published by Rydex
Investments and has been recreated by the
research team at Flexible Plan Investments
to encompass the period from 1950 through
2014.
Like so many simplistic approaches to the
financial markets, the Efficient Frontier fails
to reflect market reality
Markowitz’s Efficient Frontier
1950-2014
Exhibits developed by Flexible Plan Investments Ltd. research group. Figure 2 is an original concept developed by Rydex/SGI (now a part of Guggenheim Investments). Equity returns are based on the S&P 500 Index, including
the reinvestment of dividends. Bond returns include the reinvestment of dividends and are based on the Barclays Capital Aggregate Bond Index. Index returns do not reflect any management fees, transaction costs or expenses.
May 14, 2015 | proactiveadvisormagazine.com 5
6.
7. Wage growth mixed amid “just right” employment report
he U.S. Bureau of Labor Statistics
(BLS) reported last Friday that total
nonfarm payroll employment increased
by 223,000 jobs in April, with the unemploy-
ment rate moving slightly lower to 5.4%.
Whiletheoverallemploymentnumberscame
in slightly below estimates and prior months
were revised significantly lower, Schaeffer’s
Research said the April employment report “hit
the sweet spot for traders.” The market cheered
both the rebound from March’s dismal numbers
and the unemployment rate drop to a level not
seen since 2008. However, most analysts believe
the job gains were “not enough to prompt a June
interest rate hike by the Federal Reserve.”
Barron’s said the earnings component of the
jobs data was mixed, with the monthly reading
on average hourly earnings up only 0.1%. But the
year-on-year rate was over the key 2% line, up
2.2%. This was a bit weaker than some encour-
aging news in the Employment Cost Index (ECI)
reported in late April, which showed a discernible
uptick in wage pressures. (Note: the Fed’s general-
ly stated inflation goal remains at 2%.)
According to The Wall Street Journal, U.S.
labor costs “accelerated in early 2015, a sign
that the job market may be tightening and
beginning to generate a long-awaited pickup
in workers’ wages.” They pointed to labor costs
rising 2.6% in Q1, from a 2.2% increase in the
third and fourth quarters of 2014. “This is hard
evidence and a reliable index that says we are
seeing some acceleration in wages as a result of
a tighter job market,” though “it probably still
T
has further to go,” said Stuart Hoffman, chief
economist at PNC Financial Services Group.
The Journal’s reporting found that “a
number of big U.S. companies have an-
nounced pay increases in recent months,
seeking to attract and retain workers in a
tighter market.” These include McDonald’s,
Walmart, Target, and Aetna and may “signal
that the U.S. economy has finally improved to
the point where workers’ wages, which have
been stuck at roughly 2% annual growth for a
half-decade, are beginning to climb.”
Bespoke Investment Group takes a look in the
chartatacombinationofweeklyhoursworkedand
wage increases, showing a less encouraging picture.
The combined increase year-over-year for both was
at 1.8% in April, perhaps reflecting the continued
trends of lower-paying industries adding jobs and
younger workers growing in the employment
ranks. The employment-to-population rate was
unchanged at 59.3%, said Barron’s, where it “has
been stuck for four months.” For those fortunate
to have jobs, “workers have just about kept up with
inflation.”
WEEKLY PAY: HOURS WORKED X HOURLY WAGE (YOY%)
7May 14, 2015 | proactiveadvisormagazine.com
TOPPING THE CHARTS
8. Beyond MPT
An active way to diversify
By David Wismer
Photography by Mike Morgan
8 proactiveadvisormagazine.com | May 14, 2015
9. Damon Ridley
Greenbelt, MD
President, Ridley Wealth Strategies
FSC Securities Corp.
Damon Ridley is CEO of Ridley Wealth Strategies
based in Greenbelt, MD, and is an Investment Advisor
Representative offering securities and advisory ser-
vices through FSC Securities Corporation (FSC).
He has extensive experience in the financial services
industry, having worked previously for ING Financial
Partners (now Voya Financial Advisors) and Ameriprise
Financial Services Inc. He has a B.S. in Finance from
the University of Southern California (Marshall School
of Business) and certification in financial planning from
Georgetown University (McDonough School of Business).
Mr. Ridley grew up in the Philadelphia area, where he
was a skilled athlete, especially on the football field.
He was a walk-on prospect for the famed USC football
team as a cornerback, but eventually decided to focus
his energies on his studies in business and finance. He
still is a “fanatic” follower of college football, “especially
when the Trojans are contending for another national
championship.”
Ridley Wealth Strategies offers a full menu of finan-
cial services to both individuals and small businesses.
Mr. Ridley says that he “enjoys working with financially
motivated individuals who wish to place their financial
house in order, so they can concentrate on what is truly
important in their lives.”
Mr. Ridley and his wife reside in Maryland in the
Baltimore-Washington corridor and have two children,
ages 8 and 14. They enjoy “spending quality time with
the family” and seeing their children engage in a variety
of activities. Their son is a talented athlete and honors
student and they look forward to helping him navigate
the college selection process. Mr. Ridley also mentors
local high school students, teaching them about financ-
es and entrepreneurship.
Proactive Advisor Magazine: Damon,
when did you become interested in active
investment management?
Damon Ridley: It was the 2000-02 time
frame, when we were in the middle of what
began as the dot-com meltdown. This was a
very difficult time for advisors and investors—
we had not seen anything quite like it with the
creation of a whole new investment sector of
technology companies. It became pretty appar-
ent to me that there was the traditional diver-
sification of Modern Portfolio Theory (MPT),
and then there was the opportunity to pursue
a more active way to approach diversification.
What I mean by that is that many of the
tenets of MPT are fundamentally sound over
the long term, but it made very little sense to
me to stick with investment sectors in the short
run that were seeing huge continuous losses,
while other sectors were faring much better. So,
even if one were primarily long-only in orienta-
tion, there appeared to be better ways to more
actively manage money than plain vanilla MPT
and traditional asset allocation and rebalancing.
That was really the genesis of my thinking
around active management. To put it as simply
and logically as possible: Why keep money in
an area that is going down when there’s another
area that’s going up at the same time?
Where did that take your investment
thinking?
In my advisory capacity, this made me in-
tensely curious to find other potential strategies.
I started to look for other ways to add alpha and
be able to reduce a client’s risk exposure.
What’s interesting to me is the fact that
clients often have a very common sense way of
viewing investments and their feelings about
risk—they just do not have the experience,
tools, or expertise to act upon those feelings in
a disciplined or effective way. Investors inher-
ently know it is not a good thing to see their
portfolios go down 20, 30, or 40%. Why do so
many advisors think that is acceptable?
I was determined not to be one of those ad-
visors, and my outlook changed over the years
to align very nicely with the common sense
views of most clients. The difference is that I
have the technology and relationships with
active money managers to be able to effectively
implement the investment strategies that can
work well for clients over time.
I educate clients on the purpose of active
management: Reducing the amount of risk
in their portfolios. Not necessarily to greatly
enhance returns or beat the market each and
every year, but to actually enhance total port-
folio returns over time by minimizing large
drawdowns, volatility, and fluctuations. Clients
can reasonably expect to remain within a range
of returns, depending on their objectives and
risk profiles.
The secondary important benefit to this is
that clients will be more likely to stick with
their strategy consistently, therefore avoiding
the pitfalls inherent in the sequence of returns
and taking advantage of the compounding
effect of those returns.
How do you educate clients on the
investment process?
I think the large mutual fund companies,
good as they may be in many areas, have
continue on pg. 10
so strongly and effectively marketed to the
American public the idea of passive investing
that it is important to start from square one
with many clients. I discuss why having large
portfolio drawdowns is such an issue, especially
for those close to or in retirement—and I
demonstrate the math on that.
We also talk about things like DALBAR
research, which shows how the average investor
on their own tends to make large mistakes with
their portfolios and consistently underperforms
the market by a large margin. Then we get into
those benefits I mentioned of an integrated
and active investment approach: That an
“There are better
ways to actively
manage money than
plain vanilla MPT.”
May 14, 2015 | proactiveadvisormagazine.com 9
10. Securities and advisory services offered through FSC Securities Corporation, member FINRA, SIPC, and a Registered Investment Adviser. Ridley Wealth Strategies is not affiliated with FSC Securities Corporation or registered as a
broker-dealer or investment advisor. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of
future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.
actively managed portfolio can deliver compet-
itive and smoother returns, that risk and draw-
downs can be mitigated, and that over time they
can expect to see compounded growth with less
worry about day-to-day fluctuations.
Theywillgaintheknowledgethatprofessional
money managers are watching their investments
constantly, using sophisticated techniques on
their behalf. When the market gets more volatile,
they will know that active management attempts
to minimize and narrow those fluctuations. A
comfort level then starts to occur with the client,
hopefully helping them stay invested throughout
the whole process.
What else do you find important in
working with clients?
Clients are more educated today and they
are used to having fast and easy access to infor-
mation. You need to be able to provide a flow
of information to them, not just about their
specific investments, but also how they are track-
ing toward their financial goals on a holistic basis.
I also believe in keeping clients informed about
bigger trends and events in the markets, whether
that is through emails, seminars, or blog posts via
our website or social media.
The single most important thing, however,
is building the personal connection with a client
and understanding their unique circumstances.
They fall all over the spectrum in terms of age,
occupation, assets, and lifestyle. It is critical to
use the financial planning process to get at their
needs and objectives.
My philosophy is that the planning pro-
cess helps educate clients about their total
financial situation and the investment advisory
process educates clients about the strategy
and the vehicles to help achieve their goals.
My role is to have both of these aspects work
hand-in-hand, becoming a financial coach for
many aspects of my clients’ lives.
continued from pg. 9
Damon Ridley
10 proactiveadvisormagazine.com | May 14, 2015
11. Figure 2
The inefficient frontier?
Seven time periods, seven different frontiers
Figure 2 depicts the efficient frontier of
equity and bond portfolios illustrated in
10% increments. Equity returns are based on
the S&P 500 Index, including the reinvest-
ment of dividends. Bond returns include the
reinvestment of dividends and are based on
the Barclays Capital Aggregate Bond Index.
Index returns do not reflect any management
fees, transaction costs, or expenses. Standard
deviation is used as a measure of risk. This is
a statistical measure of the historical volatility
of an investment, computed over each 10-year
period. The higher the number, the more vola-
tility is to be expected.
In decades that include a major bear market,
bonds tend to outperform equities. In 1970-79,
the fishhook disappears as 100% bonds and
100% equity portfolios achieve roughly the
same return but with equities at more than
double the volatility. In 2000-09, the fishhook
is inverted and bonds dramatically outperform
equities, moving the point of lowest risk/highest
return to 70% bonds/30% equities.
Efficient Frontier
continued from pg. 5
Figure 3
Allocation to achieve lowest risk/highest return
Note: Lighter shade represents the fixed-income allocation; the darker shade is the equity allocation.
These discrepancies illustrate the problem with
trying to use simplistic 60/40 portfolio designs and
expecting a predictable return. Financial markets
rarelyfittheassumptionsofmean-variancemodels.
Fifty-plus-year averages almost always fail to match
actual results of shorter periods. If the optimal
portfolio is defined as one that achieves the greatest
return with the least risk, there isn’t a single 10-year
period that matches the 60/40 allocation. Each
decade has a different “efficient frontier,” with
the lowest risk/highest return portfolio varying as
shown in Figure 3.
Another way to utilize the Efficient Frontier
portfolio approach is to develop an allocation of-
fering the maximum expected return for a given
level of risk. According to the Efficient Frontier’s
traditional curve, using the 65 years of data from
1950-2014, the appropriate allocation is 70%
bonds/30% equity at an 8% standard deviation
risk level.
Once again, each decade produces a different
value for a portfolio with an 8% standard devi-
ation/risk level. The 2010 decade actually offers
two options: An 80% bond/20% equity portfo-
lio has a roughly equivalent risk level to a 30%
bond/70% equity allocation as seen in Figure 4.
The lasting value of the Efficient Frontier
concept is the fishhook curve. With the exception
of the 1970s when the curve flattens out, there is
a point on each frontier where diversification re-
duced risk beyond that of the perceived lower-risk
investment (i.e. bonds) and improved returns.
continue on pg. 14
Financial markets rarely
fit the assumptions of
mean-variance models.
11May 14, 2015 | proactiveadvisormagazine.com
12. - A custodian that makes your life as an RIA simpler.
The importance of full
market cycle returns
Selecting a manager by using too short of a period
or one that only includes a discrete type of market
(bull or bear) may be misleading—and costly—
over the long term.
Spring cleaning: Time to
throw out some old asset
allocation advice
Architects design buildings for the once-in-100-years
event; why don’t financial advisors do the same with
portfolio design and asset management?
Dog days of the U.S.
expansion
While the expansion is now over 70 months old
and in the mature phase, slower growth means it
may have more headroom than is typically the
case at this point in the cycle.
L NKS WEEK
proactiveadvisormagazine.com | May 14, 201512
13. Market high?
Pie in the sky
Ian Naismith founded Investment Portfolio Solutions in 2012 and has been trading the markets since the early 1990s. He licenses trade signals and portfolio construction
consulting to financial institutions. A member of the National Association of Active Investment Managers (NAAIM), Mr. Naismith has also served as board member and
president. www.linkedin.com/in/investmentportfoliosolutions
0
500
1000
1500
2000
2500
3000
3500
4000
4500
3/24/2000
S&P 500 market high
1527.57
5/7/2015
S&P 500 closing
(near current “market highs”)
2088.00
5/7/2015
S&P 500 “target real high”
(Adj for 1980-based CPI
& U.S. dollar since 3/24/00)
4051.01
Source: Ian Naismith, Kensington Analytics LLC
1527.57 2.40 .905 4051.01
(3/24/00 high)
X / =
(rounded
compounded effect of
6% annual inflation that
has been underreported
since 3/24/00)
(depreciation
of the U.S. dollar
since 3/24/2000)
(dollar-depreciated,
underreported
phantom-inflation-
adjusted high)
S&P 500 “REAL HIGH” FORMULA
hile the talking heads on your favorite
financial news network are likely
touting the new highs (I guess—I gave
up watching that stuff years ago), other forces
have silently been at work for years undermining
the real rate of return. It is my opinion that the
goofing of the CPI calculation by the Bureau of
Labor Statistics over the past few decades has
reduced major payout stress of the Social
Security annual Cost of Living Adjustment
(COLA) increases for existing and future Baby
Boomers. This is especially provocative after the
1990 CPI adjustments.
The notion that CPI is a true representation
of price change over time for a “standard of
living” lost its validity long ago. Without ex-
plaining in detail what has formed my opinion,
you can find plenty of data and analysis of the
CPI manipulations via construction and the
form of calculations on various sites.
So, let’s break it down in the numbers.
This is a promise—the following premise and/
or calculations can be scrutinized—there are so
many factors that could be argued for measur-
ing the “true high”—but, conceptually I hope
this sheds some light as to how “off” the “new
highs” really are. The 5/7/15 S&P 500 close
was a nice round number of 2088.00 and the
U.S. Dollar Index (DXY) close was 94.64.
Now, if I were a lucky person and bought
the S&P 500 at the close on 3/24/00, which
was its “all time high” at that point, I would
have bought one unit at 1527.57 with a DXY
value at close of 104.56. Then I held to now.
Needless to say, the next 14 years or so would’ve
been “a long, strange trip.”
So, not adjusting for dividends (because the
index calculations are not), you would have had
a 36.7% increase in your S&P unit or a little
morethan2%annualreturn.Prettygood…not.
Here is where the CPI manipulation comes in.
W
Isn’t the main goal of investing in equities and
equity indexes like the S&P 500 to outpace
inflation? How has the net return of the S&P
500 dividend stream, less fees/expenses, been in
the last 15 years? Pretty thin.
Between the market high in 2000 and today,
the BLS-posted official CPI is an estimated 6-7%
lower than if the CPI had been calculated with
1980-based CPI methodology. That is a huge
amount of unaccounted-for additional inflation.
The S&P 500 unit growth now looks pretty paltry,
right? Now, let’s pour on the U.S. dollar effect. The
basket has not changed since 1999, so the 2000
high example is a currency apples-to-apples time
comparison. Although the U.S. dollar has rallied
for the past year, it is still -9.5% off of 5/24/00.
Low equity returns, depreciating dollar—don’t get
too bummed out!
Finally, my interpretation of what the S&P
500 “real high” should be is illustrated above.
This calculation requires a perfect world: a tax-
free, fee-free S&P 500 total return of 6.71% per
year to equal the combined effects of the depre-
ciating dollar and unreported phantom inflation
since 3/24/00. So, our “high” of 2088 is actually
only 51% of where the real “high” should be.
Look at the bright side—on 7/1/14, the
real high was 4578.53 when the S&P 500 was
1614.96, so we are gaining ground.
Proactive Advisor Magazine presents weekly commentary provided by well-known market analysts, financial authors, investment newsletter publishers, and economists. The opinions expressed
each week represent their personal perspectives and not necessarily those of the magazine.
ILLUSION OF THE CURRENT “MARKET HIGHS”
May 14, 2015 | proactiveadvisormagazine.com 13
HOW I SEE IT
14. Therecanbenoassurancethatanyinvestmentproductwillachieveitsinvestmentobjective(s).Therearerisksassociatedwithinvesting,includingtheentirelossofprincipalinvested.Investinginvolvesmarketrisk.The
investment return and principal value of any investment product will fluctuate with changes in market conditions. Guggenheim Investments represents the investment management businesses of Guggenheim Partners,
LLC. Securities offered through Guggenheim Funds Distributors, LLC. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim Partners, LLC. x0516 #17180
Explore how a tactical approach may help
maintain diversification.
How diversified are investor portfolios? The answer is that, when diversification
is needed most, portfolios may not be as diversified as investors assume. In this
paper, we will explore the concept of portfolio diversification, the impact of
evolving financial markets, and why we believe tactical management is playing
an increasingly pivotal role.
Request your free copy.
Call 800.258.4332 or visit guggenheiminvestments.com/dilemma
The Diversification Dilemma
Tactical Management and
Today’s Evolving Markets
By Douglas C. Mangini, J.D., Senior Managing Director
Chicago | New York City | Santa Monica
continued from pg. 11
Efficient Frontier
Linda Ferentchak is the president of Financial Communications Associates Inc. Ms. Ferentchak has worked in financial industry communications since
1979 and has an extensive background in investment and money management philosophies and strategies.
Figure 4
Allocation to achieve an 8% risk level
Note: Lighter shade represents the fixed-income allocation; the darker shade is the equity allocation.
*The 1980s were a particularly volatile decade with the lowest average standard deviation at 12.25%.
Thus, no allocation would have met an 8% standard deviation.
The brilliance of Markowitz was his recogni-
tion of the potential for diversification to reduce
portfolio risk without unduly depressing returns.
However, he created the Efficient Market Theory
before computers and the multitude of investment
vehicles were developed that allow today’s invest-
ment managers to slice and dice the market into
endless allocations and change those allocations
quickly and cost efficiently. The market was in
many ways much simpler: a world without instan-
taneous transactions, global influences, data-driven
computer models, and the ease of analyzing and
investing in a great number of investment choices.
It is time to rethink the Efficient Frontier to
accommodate new investment approaches to
achieve reduced risk and improved returns.Today’s
investment managers have the ability to go beyond
simplistic formulas to create financial security for
their clients by using investment approaches that
take advantage of the enormous potential and
flexibility of the financial markets.
By developing allocations based on market
conditions and incorporating the use of strategic
diversification, today’s active managers can manage
risk while dynamically optimizing portfolio alloca-
tions. This is where a total portfolio approach to
active management comes into play.
14 proactiveadvisormagazine.com | May 14, 2015
16. Active Management
There is a great deal of confusion surrounding the term “active
management” created by the business press. When one reads a headline
in any given year that “active managers” are underperforming or overper-
forming their benchmarks, this typically is referring to “active” managers
of a mutual fund—who are being measured against a specific index or
competing funds within that style.
Within the field of true active portfolio management, this narrow and
misleading definition really has little significance.
Active investment management is not about exceeding a specific
benchmark or “beating the market.” Active management seeks favorable
risk-adjusted returns in any market environment, generally employing
sophisticated algorithms and models to capture gains and protect against
losses in a wide variety of sectors, asset classes, and geographies.
It is about controlling risk in the markets, finding new ways to
dynamically diversify, and smoothing out the long-term volatility typically
found in any asset class. Active managers tend to rely on quantitative
approaches for asset allocation, exposure to the market, and adjustments
to portfolios based on current market conditions. When it comes to
evaluating returns, they generally will not compare to the S&P 500 or
global total market indexes, but are far more interested in risk-adjusted
returns and in meeting their portfolio objectives.
In theory, it is fundamentally about a long-term approach to portfolio
management that is diametrically opposed to “buy-and-hold.”
Fee-based revenues remain strong among advisors
101
Dynamic
Strategic
Diversification
Tools Models
Strategies
5 reasons to consider active management
Buy-and-hold is dead(ly)—While bull market runs are impressive,
history shows it is not a matter of “if” but more a matter of
“when” for the next bear market. Investment expert Kenneth Solow
sums it up: “Patiently waiting for stocks to deliver historical average
returns does not rise to the level of an investment strategy.”
Bear market math is daunting—It takes longer than most in-
vestors think to recover from bear markets—a gain of 50% is
needed to overcome a 33% portfolio loss.
Risk first: Always—As one prominent active manager has said,
“No one would ever jump into a car without brakes, so why
would investors even consider having an investment strategy that did
not have a strong defense?”
Active management aligns with investor psychology—Behavioral
finance studies have documented the tendencies of investors to
operate on the destructive principles of “fear and greed.” Disciplined
active management takes emotion out of the equation.
Does “set it and forget it” really make sense?—For retirees or
those approaching it, the “sequence of returns” dilemma can
have a devastating effect on future income needs. Active management
offers a prudent path to achieving the twin goals of asset preservation
and compounded capital growth.
Resources for Advisors
Websites
Proactive Advisor Magazine: Active investment management’s weekly magazine, providing
advisor perspectives, topical issues in active management and commentary on strategy and
tactical tools. www.proactiveadvisormagazine.com
National Association of Active Investment Managers (NAAIM): Peer-to-peer networking
in the active investment management community, providing best practices among successful
advisors and advisory firms. www.naaim.org
Market Technicians Association (MTA): Leading national organization of investment analysts,
stock market analysis professionals and certified market technicians. www.mta.org
Advisor Perspectives: Audience-generated and vendor-neutral forum where fund companies,
wealth managers and financial advisors share their views on the market, the economy and
investment strategy. www.advisorperspectives.com
Whitepapers
“Bucket Investing with Dynamic Risk-Managed Portfolios,” Flexible Plan Investments
goto.flexibleplan.com/download/whitepaper-bucket-investing.pdf
“Comparison of ETFs and Mutual Funds—The True Cost of Investing,” Guggenheim Investments
guggenheiminvestments.com/rydex
“Understanding Leveraged Exchange Traded Funds,” Direxion Investments
www.direxioninvestments.com
“Small Accounts, Big Opportunities,” Trust Company of America
www.trustamerica.com/resources
“Why Gold? Seven Enduring Reasons,” Flexible Plan Investments
goldbullionstrategyfund.com
“The State of Retail Wealth Management, 5th Annual Report,” PriceMetrix
www.pricemetrix.com
2012 2013 2014
Fee-Based Assets (% of Total Assets) 28% 31% 35%
Fee-Based Revenue (% of Total Revenue) 45% 47% 53%
Average Fee Accounts per Advisor ($000s) $258 $293 $293
Average Assets of New Client HHs ($000s) $475 $477 $538
Source: PriceMetrix Insights – The State of Retail Wealth Management 2014 – 5th Annual Report (Aggregated
data representing 7 million retail investors and over $3.5 trillion in investment assets.)