Wealth Management

(New York)

This article chronicles the actions of financial advisers leading up to and following the Fed’s rate hike. The piece says that clients had been very worried about how rate hikes would affect their portfolio, but that advisers had been steadfast is reassuring them, with one telling clients to stay focused on the “long term”. Some advisers in the piece outlined their approach to hikes, saying “We have preferred to be defensive, so we have stayed short-term … Clients have made less yield, but this protects them when the inevitable rate increase happens”.  Some advisers plan to send out special messages to clients reassuring them about the impact of rate hikes.


FINSUM: This is a good piece for advisers to read, as it gives some insight as to how peers are handling the situation, including client “fretting”.

Source: Wall Street Journal

(New York)

One thing is clear—even if they are not wealthy now, Millennials are going to be a major part of wealth management in the years to come. This article explains where the generation is getting its investment advice. As most advisers already know, Millennials generally abhor financial services, holding a fundamental mistrust of all things “finance”. However, they still need financial advice, and this piece shows that they are seeking it within their own networks as well as through informal “help” classes which are being put on by independent groups and financial services companies. Younger financially experienced people usually lead the events, as they are seen to connect better to the younger audience. In addition to explaining this emerging “event” approach to financial planning for Millennials, this piece has some very interesting charts and stats on where the generation is getting its investment advice.


FINSUM: Advisers are going to need to tap into the Millennial market if they want to keep their businesses going in the future. This piece gives some good information about the generation’s approach to wealth advice.

Source: Wall Street Journal

(New York)

Barron’s has published a piece covering two investment ideas for 2016. The first idea is a variation of the old “Dogs of the Dow” approach, where one would by the ten highest yielding stocks on the Dow. This variation includes buying the ten highest and ten lowest-yielding stocks, to create a mixed basket of winners and losers. The strategy is predicated on two things: mean reversion, where cheaper stocks will eventually improve, and momentum, where hot stocks will keep on moving higher. While relying on these two principles simultaneously seems a conundrum, the strategy has a favorable history, as buying both the worst and best stock subsectors would have yielded returns well in excess of the market. The other idea in the piece is buying distressed debt, as experts in the space say that there has not been this much opportunity since the collapse of Lehman.


FINSUM: The stock idea is an interesting one, though it does seem to rely on a logical conundrum. Despite that though, the strategy does appear to have done well historically.

Source: Barron’s

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