SA For FAs

The International Monetary Fund’s economists just released their semi-annual World Economic Outlook, downgrading global growth and world trade projections. This podcast (6:11) argues that advisors managing clients’ money should probably heavily discount economists’ forecasts and market prices alike, and balance portfolios between risk-on and risk-off tendencies on a permanent basis. The IMF outlook cites numerous troubling uncertainties that could shift the direction of markets, but neither the IMF nor Goldman Sachs nor any other organization’s smartest economists know how to time these shifts.Learn more about your ad choices. Visit megaphone.fm/adchoices

Ronald Surz has just started GlidePath Wealth Management with the belief that investors need advisors and advisors need better models. In this podcast interview (9:28), Surz suggests that Modern Portfolio Theory, now 65 years old, may itself be in need of retirement. His goal is to create the most prudent target-date fund in the country, one that is capable of helping investors navigate the risk zone around retirement and re-inject growth into the portfolio during their later years.Learn more about your ad choices. Visit megaphone.fm/adchoices

Seeking Alpha contributor Victor Haghani takes on the sacred cow of factor investing, noting the investment craze’s five-year underperformance bears watching by money managers. This podcast (5:27) sees value in cutting edge academic finance, but suggests that strategies whose validity have been established over millennia, such as diversification, should take precedence over those of more recent vintage whose findings are more ambiguous.Learn more about your ad choices. Visit megaphone.fm/adchoices

As the moon landing was to America, so too is the giant leap of retirement readiness that occurs through the small steps of your clients. This podcast (5:53) argues that small efforts continue to appear small even at intermediate stages, but lead to mathematically demonstrable large-scale accomplishments if we persist in them.Learn more about your ad choices. Visit megaphone.fm/adchoices

Fidelity Investments has introduced five new index funds, most of them sporting expense ratios of just 5 basis points. Because advisors no longer serve as gatekeepers to products, and those products are becoming nearly free, there’s no reason for investors to turn to an advisor…but for advice. This podcast (5:26) argues that that means that advisors have never been freer to articulate their value proposition. But, at the same time, one lesson of Fidelity’s indexing campaign best not ignored is that part of an advisors’ appeal will depend on fees that seem reasonable to consumers in an increasingly competitive marketplace.Learn more about your ad choices. Visit megaphone.fm/adchoices

An aging society means aging clients, which creates a business concern for advisors. This difficulty actually presents an opportunity for advisors to distinguish their service to this population by acknowledging and counteracting some of the indignities of age that the elderly face. This podcast (5:44) suggests that advisors display a level of service for all of their clients that is rare and distinctive.Learn more about your ad choices. Visit megaphone.fm/adchoices

Asset management firms and investment research services, large and small, are increasingly offering model portfolios for advisors. Does outsourcing the portfolio undermine the advisor’s value or does it free advisors to focus on financial planning? This podcast (5:12) argues that advisors should figure out which approach will result in the best possible outcomes for clients, and make absolutely sure that they can transparently explain to the client what they are doing to add value.Learn more about your ad choices. Visit megaphone.fm/adchoices

In an article in The Atlantic, law professors Ganesh Sitaraman and Anne Alstott propose an intriguing fix to America’s retirement crisis, which sort of nudges workers into saving more without imposing costs on business or government, hence lowering political resistance.This podcast (5:28) suggests that the two law professors’ idea makes for an excellent start toward solving a retirement problem that is only growing. Once in place, it would be desirable for the government to take steps that would incentivize further saving.Learn more about your ad choices. Visit megaphone.fm/adchoices

 An organization that mines the investment wisdom of millionaires reveals that they are not immune from the common misunderstandings about investing. At the same time, a separate study of millennials reflects an honest appraisal of that group’s investment hindrances. This podcast (5:27) suggests that more than a specific educational curriculum, investment success takes a desire to succeed, and persistence, a rare quality for which an advisor can be a valuable resource. Learn more about your ad choices. Visit megaphone.fm/adchoices

Edd and Cynthia Staton writing on Next Avenue tell the story of how moving from Las Vegas to Cuenca, Ecuador has enabled them to live an upscale lifestyle on a Social Security budget of less than $2,000. But for Americans not keen on uprooting themselves, there are countless ways to improve one’s standard of living without leaving the U.S. This podcast (6:38) suggests that an advisor who fails to explore both portfolio growth and expense reduction can’t get a sense of the client’s true preferences. Advisors must also give due consideration to the non-financial aspects of major life changes.Learn more about your ad choices. Visit megaphone.fm/adchoices

Jerome Powell is set to testify before the House Financial Services Committee today, and the mood among stock traders and asset managers is glum. Morgan Stanley, for example, has cut its allocation to global equities, and cites the Fed as the key item that can make its stock call wrong.This podcast (5:32) argues that the substantially larger and more sensible bond market is a more reliable signal of confidence in the current market paradigm than the schizophrenic stock market.Learn more about your ad choices. Visit megaphone.fm/adchoices

A Healthview Services whitepaper makes the case for financial advisors to incorporate healthcare into their clients’ retirement plans with seven key points. This podcast (6:23) relates Healthview Services’ view that advisors who provide their clients customized projected healthcare costs see increased retirement savings of as much as 25%. The reason is that people rank healthcare as their number one retirement concern, and a non-discretionary one at that. Making it real with personalized projections becomes a powerful motivator to save.Learn more about your ad choices. Visit megaphone.fm/adchoices

The headline of an article appearing on Slate last week screamed: “The Single Most Reliable Recession Indicator of the Past 50 Years Has Officially Started Blaring.” But should we be worried about the inverted yield curve based on a small sample size of historical events? This podcast (5:38) argues that, paradoxically, today’s low yields may signal we needn’t worry about a near-term market crisis. Rather, dramatically rising yields would signal that investors are demanding compensation for a heightened level of perceived risk.Learn more about your ad choices. Visit megaphone.fm/adchoices

New retirement research Brookings makes some advisor-relevant points regarding how we look at longevity; how we frame lifetime income; and how we situate such income in a portfolio.This podcast (5:38) reports that public-policy-oriented academics manage to arrive at a reasonable financial strategy for advisors to consider for their retired clients: namely, a healthy component of aggressive investments supplemented by, and made possible by, a guaranteed income component.Learn more about your ad choices. Visit megaphone.fm/adchoices

Economists, investment strategists and market commentators make it sound as though our portfolio moves depend on a view of U.S.-China trade talks and the like. But advisors generally understand that the key criterion is the client’s objective, be that growth, income or capital preservation. This podcast (5:05) argues that, because of the economy’s perplexing twists and turns, most investors benefit from tilting in one direction, but hedging in another.Learn more about your ad choices. Visit megaphone.fm/adchoices

On this sneak peek episode of Let’s Talk ETFs, Seeking Alpha’s newest podcast dedicated to the burgeoning ETF space, host Jonathan Liss is joined by ExponentialsETFs CEO Phil Bak, to discuss Phil’s ‘aha’ ETF moment, after which he was hooked on ETFs for good. Tune in every Wednesday starting July 10 for full-length episodes of Let’s Talk ETFs. Subscribe now to make sure you don’t miss a single episodeLearn more about your ad choices. Visit megaphone.fm/adchoices

According to a recent survey by the Transamerica Center for Retirement Studies, 38% of Americans use a financial advisor, primarily for retirement investment recommendations, general financial planning and calculation of savings goals. But isn’t this all available free on the internet? This podcast (3:55) argues that advisors’ greatest vulnerability – the free advice on the internet – is intimately linked to their greatest strength, the personal relationship which the internet cannot duplicate.Learn more about your ad choices. Visit megaphone.fm/adchoices

In this podcast interview (15:13), Evan Powers, a financial advisor and principal of Cypress Financial Planning, explains his view that, with 3 million stock indexes in the world vs. just 40,000 stocks, just choosing the benchmark is 70 times more active a decision than choosing a stock. He also details where passive investments are generally superior and where a case could be made for active management. And he discusses emerging markets, REITS, comprehensive planning and where he’s currently finding value in markets.Learn more about your ad choices. Visit megaphone.fm/adchoices

This week we’ve explored whether retirement investors are too conservative; what we should invest in reading; Vanguard’s assessment of its own retirement-plan investors; and whether REITs are sufficiently similar to physical real estate. This podcast (6:41) suggests that if ideas are worth considering, then they’re worth reviewing, to wedge them a bit deeper into our active awareness.Learn more about your ad choices. Visit megaphone.fm/adchoices

A reader asks: Do REITs function in an asset allocation as physical real estate does? My answer is no: The research literature indicates a very high correlation of returns between REITs and small-cap value stocks. But this podcast (6:30) “thinks aloud” about ways to import the characteristics of physical real estate into one’s portfolio, without the hardships of being a landlord. While I see no ideal solution, I would look for low-volatilty, income-oriented value investments that play out over a long time period, as physical real estate does.Learn more about your ad choices. Visit megaphone.fm/adchoices