Is there a little something something between bonds and James Bond?

Well, bonds, at least, are expected back this year, according to schwab.com. 

James? Filming a movie somewhere. Yeah, yeah; unreliable as ever.

Thing is, in the aftermath of an extended period of low yields -- not to mention last year’s to eagerly forget price dip, three tries at what’s on the precipice of a comeback: returns in the fixed income market, according to the site.

So, why so upbeat about returns? It goes like this:

Both nominally and in reality, starting yields are the highest in years;

The bulk of the Fed tightening cycle has wrapped up; and

A deceleration of Inflation’s likely

Following a prolonged dry spell, the bond market’s replete with yields that – compared to other investments – are appealing. A portfolio consisting of bonds; and high quality at that, like Treasuries, can translate -- without an excessively long period – around 4% to 5%.

Bonds, explained Ted Stephenson, professor of Accounting and finance at George Brown College, continue to be part of a diversified investment portfolio – an indispensable one at that, according to usnews.com.

"Regardless of correlation, bonds have done well versus stocks in six out of seven historical recessions. Ultimately, the correlation between stocks and bonds is not as important as relative performance."

As Yogi Berra likely would say: if it wasn’t a challenge, what kind of challenge would it be?

And if he didn’t say it, one too many fastballs must have ricocheted off his glove and against his noggin.

Point is, what with escalating interest rates, an unpredictable economy and relentless inflation starring you in the kisser, it takes work to manage and grow your financial management business, according to forbes.com.

Well, do abet your efforts, to prepare for the first quarter of the new year, 16 members of Forbes Finance Council dispense advice for business leaders.

A few tips:

1. Focus on liquidity 
2. When calculating the cost base, make space for contingencies 
3. Build up Your forecast by customer
4. Consider your insurance model 
5. When it comes to resiliency planning, pay attention

Business plans, marketing strategies, operational processes and business technology aside, your company’s financial side calls for considerable effort, according to ceoworld.com. Not only that, your company’s longevity and expansion seemingly leans on a solid system of financial management.

You can incorporate quality financial management practices without a hitch in a few ways, including by leveraging the most effective financial software and tools; regularly managing your accounting records and creating seamless billing processes. What’s more, you can establish financial goals that are clear and monitor business performance. 

Based on Cerulli Associates' research analysis of mutual fund and exchange-traded product trends in January, institutional investors expect to increase allocations to active investment strategies. According to the data, while mutual funds lost $1.9 billion to start 2023, a few asset classes are generating positive inflows. For instance, taxable bond mutual funds added more than $15 billion of inflows during January, while municipal bond mutual funds added $7.7 billion during the month. This bucked the trend in 2022 in which outflows were $148.7 billion. The release from Cerulli stated, “The gap between active and passively managed funds hit new lows in December 2022; however, [the] Cerulli survey [shows], most institutional investors still want a majority of their portfolios to be actively managed. A noteworthy number of institutional investors indicate increasing their allocations to active strategies in equities (28%) and fixed income (20%).” The release also stated that “Although mutual funds closed 2022 on a “sour note,”—having dropped 4.5% in December—they have so far reversed course in 2023, with assets climbing 5.8% to $17.2 trillion.” The report noted that the data was based on a survey administrated in the second quarter of 2022.

Finsum:According to the results of a recent Cerulli Associates report, institutional investors plan to increase allocations to active strategies as taxable bond mutual funds and municipal bond mutual funds saw a combined $22.7 in inflows during January.

U.S. government and corporate bond ETFs took a hit in February, as Treasury yields rose due to continuing fears over high inflation. According to a February 28 note from Lawrence Gillum, fixed income strategist for LPL Financial, “While bonds are back, 2023 may be bumpy. We don’t think we’ll see another year like 2022 anytime soon, but despite the higher starting yield levels, we could see periods of negative returns.” For instance, according to FactSet data, the Vanguard Total Bond Market ETF (BND) fell 2.7% last month, while the iShares 20+ Treasury Bond ETF (TLT) dropped 4.9% in February. When bond yields rise, prices of debt fall. However, shorter-duration Treasury bonds fared much better than longer-term U.S. debt last month as investors adjusted their rate expectations. For example, the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) posted a small return of 0.3% in February. In addition, two-year Treasury yields, ended February at 4.795%, up from 0.730% at the end of 2021 as higher yields have been attracting investors after rates surged last year.

Finsum:While longer-duration bond ETFs faltered last month due to continuing fears over inflation, shorter-duration Treasury bond ETFs such as the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) fared much better.

If you’re an advisor and looking to generate more leads for your business, a strong website is a must. Its where potential clients can find you. Susan Theder, chief marketing, and experience officer at FMG Suite recently laid out the five most important pages every advisor website must have in an article for Financial Advisor Magazine. According to Theder, the most important page is the Home page. It gives people their first impression of you and should answer the following questions: Who do you serve, what problems do you solve, and what’s your visitor’s next step? Another must-have page is the About Us page as it’s the “place they go to meet you virtually.” But it shouldn’t look like a resume. Instead, it should include your story, why and how you got into the business, and information about your support staff. Next is the Services page, where you can list your service offerings, but you should write it from the client’s perspective. Include the challenges they are likely facing and outline how you will solve them. The fourth page is the Blog page, where you can share content to demonstrate your expertise. The fifth and final must-have page is the FAQ Page, where users can find answers to the most common questions a potential client may have.

Finsum:In a recent article for Financial Advisor Magazine, Susan Theder of FMG Suite laid out the top five pages an advisor website must have, including a home page, an about us page, a services page, a blog page, and an FAQ page.

Technology-driven real estate investment manager Cadre recently announced the launch of an individual retirement account (IRA) solution, allowing investors to allocate their IRA funds into commercial real estate (CRE) through the Cadre platform. The firm expects the new investment option to continue to expand access to CRE, which is a tax-advantaged asset class with longer investment periods and attractive risk-adjusted returns relative to equities. The new product provides a solution for IRA investors who just experienced a challenging year in the market. CRE typically features more stability and longer holding periods than traditional IRA investments like equities. For instance, during recent market drawdowns like the Great Financial Crisis and Dot-Com recession, equities lost an average of 36% in value, while private real estate averaged a 31.86% gain over the same periods. According to the firm, this makes it a fit for investors hoping to harvest returns for retirement. Ryan Williams, Founder and Executive Chairman of Cadre stated, “I founded Cadre to provide more individuals with a tax-efficient tool that institutions and ultra-high-net-worth investors have traditionally used to build wealth.” By equipping investors with the ability to invest their IRA dollars, we aim to expand access to diversified, robust retirement portfolios – and by extension, generational wealth.”

Finsum:With investors experiencing deep drawdowns in their equity funds during market downturns, real estate investment manager Cadre has launched an IRA option for investors to access commercial real estate, which typically features more stability.

Orion Advisor Solutions recently unveiled significant enhancements to its technology during the opening session of the firm’s flagship Ascent conference. Founder and CEO Eric Clarke addressed an audience of 1,600 advisors and revealed the firm’s new Story Paths advisor-facing technology for its Orion Custom Indexing solution. The new technology will allow advisors to easily select from one of several user paths which allows the advisor to customize portfolios or tax transition legacy assets within a handful of steps and minutes. The announcement comes as consumer demand for more personalized services has increased with assets in direct indexed SMAs ballooning to $362 billion. Orion’s Custom Indexing solution, which was launched in 2018, allows registered investment advisors to differentiate their offering with personalized, professionally managed, low-cost portfolios. Clarke stated, “While other direct indexing solutions cater almost exclusively to wirehouse advisors, we set out to build a solution with a heavy emphasis on customization that meets the needs of the independent advisor.” The new Story Paths workflow enables advisors to create truly custom portfolios at scale, whether they’re aiming to track a traditional index, replicate a factor-tilted exposure, or overlay to an existing internal or third-party separately managed account. In addition, the new technology will streamline the portfolio customization and tax transition process to a matter of minutes compared to the industry normal of multiple days.

Finsum:Orion recently unveiled new enhancements to its direct indexing technology that will allow independent advisors to create truly custom portfolios at scale within minutes.

Investors have continued to pile into ESG funds amid a strong political backlash and new regulations, but what impact does ESG have on expected returns? In their book, Your Essential Guide to Sustainable Investing, Larry Swedroe, and Sam Adams presented the answer to that question from research that included studies from 2017, 2018, 2019, 2020, and 2021. They found that in both U.S. and international markets, ESG strategies’ returns were well explained by their exposures to the Fama-French factors of market, size, profitability, investment, momentum, and value; and multifactor alphas were not significantly different from zero. This indicates that any benefit from incorporating ESG strategies into a portfolio is already captured by other well-defined and known equity factors, meaning investors could not improve their Sharpe ratios by using ESG strategies. They also found that return and risk differences of ESG funds could be significant and were mainly driven by fund-specific criteria rather than by a homogeneous ESG factor. In addition, across four fund categories including index, active, exclusion-based, and non-exclusion based, the majority of observations displayed higher volatility than the broader market. Swedroe and Adams also noted that environmental and social scores did not contribute to performance. However, if investors want to have their cake and eat it too, then they should tilt their portfolios to sustainable firms with exposure to the Fama-French factors of size, investment, profitability, value, and momentum.

Finsum:In their book, Your Essential Guide to Sustainable Investing, Larry Swedroe, and Sam Adams presented evidence that ESG strategies don’t provide any return benefit unless they’re tilted to Fama-French factors of market, size, profitability, investment, and momentum.

Following the bouncing…fixed income ETFs? On the heels of last year, during which fixed income funds took a licking, they’re rediscovering their mojo. That stems at least partially from  an inverted yield curve, according to cnbc.com.

In January in alone? Well, bond exchange-traded funds accumulated $20 billion. By contrast, all of last year, the total came to around $200 billion in bonds.

“There’s now income within the fixed income ETFs that are available,” Todd Rosenbluth, head of research at VettaFi, told Mike Santoli on CNBC’s “ETF Edge.” “We’ve seen higher-quality investment-grade corporate bond ETFs. We’ve seen high-yield fixed income ETFs see inflows this year, as well as some of the safer products.”

A rebound, seems to be in -- of all places -- the air, for bonds this year, in bonds, according to schwab.com. The returns in the fixed income markets, according to schawb.com. 

Despite a host of challenges – including a tumultuous global economy and an unstable U.S political climate, also a factor abroad – this year, there are opportunities for the bond market that translate into handsome yields for investors at lower risk than has been the case for years.

Volatility? For at least the immediate future, when it comes to the market, it seems to about the only stable thing going.

Volatility’s on pace to remain on the high side – with the volatility index averaging about 25, according to jpmorgan.com. As the Fed over squeezes into weaker fundamentals, the S&P’s expected to again test last year’s lows.

“In the first half of 2023, we expect the S&P 500 to re-test the lows of 2022 as the Fed overtightens into weaker fundamentals. This sell-off combined with disinflation, rising unemployment and declining corporate sentiment should be enough for the Fed to start signaling a pivot, subsequently driving an asset recovery and pushing the S&P 500 to 4,200 by year-end 2023,” said Dubravko Lakos-Bujas, global head of Equity Macro Research at J.P. Morgan.

“We all know it’s been a tough year for investors. We’ve been through monetary tightening and persistent inflation across global economies,” said Ryan Murray, CFP, with Vanguard. “We’ve seen an unprecedented period of volatility in the bond market, where such fluctuations are highly unusual.”

Give the inherently unpredictability of markets, in the face of extreme volatility, shucking aside your long term plan will certainly cross the minds of investors, he noted. “But it’s important not to let emotions get the better of you or push you to make a reactive decision that could put your hard-earned savings at risk.