Creating a model portfolio isn’t exactly like twisting open a water faucet, you know. The old noggin comes in plenty handy. After all, effective investing’s means committing to the choices among a range of investment tools that will yield results, according to forbes.com.

And they’re made of strong stuff, with the gravitas to turn a financial future rife with uncertainty into a secure one. A great starting point: putting together a model portfolio, the site continued.

Substantial discussion’s weaved into creating the portfolio, which consists of a gaggle of diverse assets. It also dispenses the opportunity to leverage diversification as a hedge against your risks.

You’re not only homing in on your financial objectives down the road but must be positioned to address any important immediate needs. Not only that, when it comes to your expenses, it’s essential to have enough liquidity to abet your ability to manage it.  

Well managed stock or “equity” funds pave the way to the best chance for a long term stock market experience on a sustained basis for most people, according to yourarticlelibrary.com. A generally embraced idea: the younger you are the more sprinkled with to equity stocks your portfolio should be.

ESGs? So called Active driven agendas? Two peas in a pod? Um, yep; that is, if you ask Indiana Attorney General Todd Rokita, according to foxnews.com.

Rokita contended that state law places a roadblock in the ability of ESG to impact investments by state government employee pension funds. He furthermore states that BlackRock, one of the world’s largest investment funds, potentially has “run afoul: of state and federal antitrust laws. How? By leveraging ESG in its investments decisions. The company also promotes its "firm-wide commitment to integrate ESG."

He argued that the Indiana Public Retirement System is required to invest the pensions of citizens "with care, skill, prudence and diligence," in an advisory opinion late last month. He also went on to allege that since ESG investments stem from political instead of financial interests, it’s a legal no no for the INPRS to make investments with ESG guidelines in mind.

Looking ahead to future ESSH campaigns, boards would be savvy to expect a settlement – or for activists to prevail – and not withdraw or a failed activist initiative, based on research from diligent.com.

While there was a drop off in the volume of activism activity between 2020 and last year, 13% of the campaigns last year struck gold. In 2020, it stood at 11%. It was indicative of a shift in corporate commitments to ESG, the site continued.

et’s see: an IRS audit. Or this: your taxes are hightailing it north.

Then there’s the old reliable: the volatility of the financial markets.

Ah, yes. Bum, bum and, um, bummer of all.

That said, on the bright side, to leverage the dividends of tax loss harvesting, there’s direct indexing, according to advisorperspective.com.

And what’s with the gold dust direct indexing boasts in light of a topsy turvy market? Well, the investor owns the individual securities rather than a commingled fund, so they take ownership of any losses absorbed on receding stocks, the site continued. So, when it comes to offsetting gains, the investor can tap those setbacks. And, presto, that can go quite a way in paring back the tax bill of an investor.

But it’s not all tinsel town and balloons. On one hand, says experts, fees and accounts minimums might be heading south, on the other, it could be that direct indexing’s will cut a deeper swatch in your wallet and; yes, isn’t there always more: might be more difficult to deal with than passive investing, according to cnbc.com.

Category: Eq: Dividends, 

Keywords: direct indexing, financial... etc.

According to the SEC’s draft strategic plan for the next four years, the agency plans on shifting its enforcement focus regarding Reg BI to “making a recommendation.” The SEC’s Strategic Plan for 2022-2026 states that the agency intends to bring cases that matter to “all parts of the SEC’s mission.” This includes failure to act in a retail customer’s best interests when making a recommendation, among other items. Kurt Gottschall, a partner in Haynes Boone, and a former director of the SEC’s Denver Regional Office told ThinkAdvisor that the language “indicates the SEC is ready to move beyond basic compliance and disclosure obligations to scrutinize the placement of retail investors’ funds in advisory versus brokerage accounts, whether complex or risky products were offered to those investors, and registered representatives’ consideration of costs.”

Finsum:Based on the language in the SEC’s four-year strategic plan, advisors and Broker-dealers will need to pay more attention to compensation arrangements and product placements.

According to a recent report by Fitch Ratings, U.S. insurers are expected to continue to increase their fixed-income ETF holdings. In December, New York introduced new guidelines that allowed a fixed income ETF to receive bond-like capital treatment if the ETF is rated by a nationally recognized statistical rating organization. However, if rated, an ETF can receive this treatment only if it is invested in fixed income securities and cash, is passively managed, and has at least $1 billion in assets under management, among other criteria. So far, Fitch has rated 10 fixed-income ETFs from VanEck, Vanguard, and Invesco. Insurers have previously sought to increase their ETF holdings due to a mix of diversification, increased liquidity, and the ability to adjust overall portfolio allocations. According to SNL data, ETF holdings at insurers jumped from $3 billion in 2016 to $9.8 billion at the end of 2021.

Finsum:Since New York introduced new guidelines that allowed a fixed income ETF to receive bond-like capital treatment, insurers have been increasing their fixed income ETF holdings. 

When an investor owns a target date fund, the asset mix shifts over time. For younger investors, the portfolio emphasizes equities and allocates less to long-duration fixed income. When investors get older and approach retirement, target-date funds reduce the equity exposure and add duration to fixed income. Tyler Thorn, a multi-sector portfolio manager at PGIM Fixed Income, told Pension & Investments that this is the opposite of how duration should be managed. He believes that a target-date fund’s duration goes in the wrong direction. He stated, “Instead of starting low and rising with age, it should start high and decline with age.” Thorn believes that younger investors need more duration exposure since they will be spending a lot more in the future. Thorn also believes that if these changes were implemented, they could make the 60/40 portfolio more viable.

Finsum:A PGIM Fixed Income manager believes that the 60/40 portfolio can be fixed if bond duration was managed differently.

According to an analysis of patent filings, compiled by GlobalData, there is a shrinking number of cybersecurity-related applications in the banking industry over the past three months, compared to the previous year. The most recent filings show that the number of related patent applications in the banking industry was 596 in the three months ending July. This is down from 1096 during the same period last year. This indicates cybersecurity innovation in the retail banking industry is dropping off. Capital One Financial was the top innovator in the banking sector in the latest quarter. The company filed 125 related patents in the three months ending July, down from 230 in the same period last. Visa was second with 109 patent applications. One company that has increased research is Truist Financial, which saw a 35.7% growth in related patent applications in the three months ending in July.

Finsum:While cyber crimes are on the rise, cybersecurity innovation in the banking industry is falling.

According to Straits Research, the cybersecurity insurance market is projected to grow 19.52% annually and reach $38.7 by 2030. Cybersecurity insurance is a policy that individuals or companies can purchase to reduce the financial risks of conducting business online. The policy transfers certain risks to the insurer for a monthly or quarterly fee. Many companies purchase cybersecurity insurance to cover expenses resulting from digital assets loss. These costs can include the cost of notifying clients of a security breach and the cost of fines for noncompliance with regulations. North America, which holds the largest market share, is expected to grow 15.32% annually. The North American market saw more data compromises in 2021 than any other year before it. The European market is forecasted to generate $13 billion by 2030, growing at an annual rate of 23.17%

Finsum:With security breaches hitting an all-time high, the cybersecurity insurance market is projected to grow 19.52% annually and reach $38.7 by 2030.

NDVR, a Boston-based advisor that combines technology and dedicated financial advisors to build and manage custom portfolios for high-net-worth investors, recently announced new capabilities that allow it to create hyper-customized portfolios reflecting the socially responsible investing values of individual clients. These new capabilities are part of the firm’s Unified Equity strategy, which includes direct indexing, active factors, tax-loss harvesting, and SRI. The company builds portfolios that directly reflect the values of its clients while targeting a combination of growth, volatility, and future cash-flow requirements. To incorporate SRI, NDVR will utilize data generated by the non-profit shareholder advocacy organization As You Sow's Invest Your Values screening platform. NDVR’s custom portfolios are designed to deliver what the firm calls Construction Alpha™, the aggregate performance enhancements expected from investment alpha, cost savings, and tax efficiency.

Finsum:NDVR, an advisor that offers customized portfolios through direct indexing, announced that its portfolios will now reflect the SRI values of individual investors.

Based on research published by Mattison Public Relations in London, more than half of the companies in the FTSE 100 now have board-level ESG committees. The data was compiled by reviewing the latest annual reports from all 100 companies. While the overall percentage was 54% of FTSE 100 companies, the research showed that the percentage varied by industry. For instance, 100% of oil, gas, and mining companies had board-level ESG committees, while only 13% of the non-bank financial services sector had these committees. Companies in the non-bank financial services sector include insurers, asset managers, and retail investment platforms. Within the 54%, 56% were made up entirely of non-executive directors. This would allow those companies to add directors with ESG expertise to provide greater oversight of the companies' ESG performance.

Finsum:Based on recent research, 54 companies in the FTSE 100 now have board-level ESG committees to evaluate a company’s ESG performance.