Month: February 2016

Insurance Products May Reduce Your Portfolio Beta Risk

Fixed indexed annuity products have recently found favor among financial advisors and consumers, despite some money managers who have launched a full-frontal assault in the press and through online advertising. But the policy provisions may be the very features consumers are searching for in a market-engaged product with downside market protection. Like all financial products, fixed indexed annuities policies have expenses. The fixed indexed annuity market is substantial and the policy costs are all over the board, so tread carefully and demand full disclosure on all expense charges before making a purchase. Keep in mind there are surrender charges...

Read More

What’s Up with the Protecting the Downside

There is no one more risk-adverse than an investor with money in the market. People hate to lose money on their investments after shedding blood, sweat and tears to earn it and pay taxes on top of it. Shouldn’t a financial advisor be just as aligned with the notion of protecting your money as you are? If the only advice through turbulent times is to hold my hand and tell me to hang in there, why pay an advisory fee? There has to be another portfolio alternative than just buy and hold. If defense wins football championships, then maybe...

Read More

Mitigating Risk & Staying Market Engaged

Who has time to really understand their investments? After all isn’t that the reason most investors outsource their investment decisions to a financial advisor? Taking the time to learn the market is a vocation in itself. But if time is money, then knowing why you bought what you bought is a good part job to pursue. After a market correction, there always seem to be a few brave investors that dig deep into their portfolios to examine what they own. Often—too often—they are surprised to discover knowing what they know now, they would have never invested in the financial...

Read More

Retirement Plans at Par

The period between 2000 and 2009 is known as the “Lost Decade.” During that period, the effective yield on the S&P 500 Index was negative. The market recovered between 2009 and 2014. But market recovery doesn’t necessarily mean retirement plans recovered. This is especially true for baby boomers in or near retirement. After the market “adjustment” last August and the current “oil crisis” market downturn, retirement accounts and pensions may be struggling just to get to back to par. The period between 2000 and 2009 is known as the “Lost Decade.” During that period, the effective yield on the...

Read More

Is Modern Portfolio Theory Old School

Anyone with discretionary money is continuously confronted with the question on how to save or invest it. In today’s low-interest-rate environment, savers are fairly happy with tax-deferred annuities paying 3 percent for a five-year period. The quandary for investors is much more difficult. You first have to develop a financial profile that includes a risk-tolerance test. Once you’ve established your propensity for risk, you can measure that risk against the timeline you’ve set to achieve your retirement strategy goals and build you portfolio accordingly. One of the most popular portfolio management tools is the Modern Portfolio Theory. Modern Portfolio...

Read More