Wealth Management

In an article for AdvisorPerspectives, Edward Perks of Franklin Templeton shared his reasoning for why fixed income should outperform equities in the near term. 

First, he sees that inflation is trending lower, but there still needs to be more progress before the Fed would actually start cutting rates. Further, he acknowledges recent stress in the banking system but doesn’t see it spreading to other sectors and becoming a more significant issue which would force rate cuts. 

This should lead to a positive scenario for fixed income with longer-term rates bending lower, short-term rates plateauing, and inflation gently moving lower. However, he does believe that the economy will keep slowing so that corporate earnings will soften into the second-half of the year and 2024. 

Due to these factors, he recommends a 60/40 allocation with a larger tilt for fixed income over equity. It’s also possible that the allocation could change even more if the economy stumbles into a recession. The firm is particularly bullish on investment grade credit as it offers compelling value with strong upside especially if Franklin Templeton’s base case economic scenario plays out. 

Finsum: Franklin Templeton is quite constructive on fixed income but less so for equities. Here’s why it’s recommending a 60/40 allocation tilted towards bonds.


In an article for BankRate, Karen Bennett discussed whether CDs or annuities are the best option for someone saving for retirement. Both are low risk compared to other options, however there are some important differences.

A CD pays a guaranteed rate of return for a certain amount of time, but the funds are completely locked up for the entire term at which point the principal is returned. However if the money needs to be accessed early, then there is likely to be a penalty which negates the earned interest and even potentially cuts into the interest. 

In contrast, an annuity is a contract that guarantees a certain amount of income for an upfront cost. Typically, annuities last for the remainder of one’s life, or it can be for a pre-set length of time. Typically, the counterparty in an annuity is an insurance company. Annuities also come in many forms. They can be structured to allow one to build wealth in a retirement account, or it can be like life insurance and pay out a benefit upon death. 

Some differences to consider are that annuities typically pay higher rates than CDs, offer similar amounts of security, higher taxes on income from CDs, and higher penalties for annuities if you need to access your principal. 

Finsum: Annuities and CDs are low risk ways to build wealth for retirement. Here are some differences to consider. 

In an article for ThinkAdvisor, Dinah Wisenberg Brin shared some tips from experienced financial advisors on the best way to integrate model portfolios into your practice. The category has seen rapid growth in recent years with nearly $400 billion in assets as of January 2023 which was up more than 20% over the previous year.

In many ways, model portfolios level the playing field between large and small firms. While some clients will always require a personal touch, model portfolios can be valuable in serving clients who have more typical goals and circumstances. Additionally, model portfolios allow advisors to focus more on enhancing the client experience and growing their business rather than managing investments. 

Another advantage is that they give smaller practices the ability to leverage tools and resources of major asset managers. These portfolios are also scalable and also leads to more optimal and efficient asset allocation. 

However, one clear disadvantage of model portfolios is that they cannot be customized especially in terms of allocations, time horizon, and risk tolerance. Therefore, they may not be appropriate for clients who have special circumstances or unique goals. 

Finsum: Model portfolios are a new innovation and are exploding in popularity. Find out if they are a good fit for your clients. 

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