1. Is The 60/40 Portfolio Broken?
For decades, the standard representation for a balanced portfolio has been the “60/40”- 60% equities, 40% bonds. Although most investors diversified beyond this model and incorporated small caps, foreign stocks, high yield bonds, and perhaps something more exotic like REITs or commodities, a simple mix of 60% S&P 500 and 40% Barclays U.S. Aggregate Bond is often the shorthand definition of a balanced portfolio. — Marc Odo
2. Has Economic Growth Peaked for the Year?
Last Thusday the Nasdaq closed up 0.7% for its 17th record high in 2021. Not to be outdone, the S&P 500 gained 0.6% to make its 30th record close for the year and the Dow added nearly 1%. The long bond remained fairly steady at 2.1% while WTI crude rose back above $73 a barrel and gold dropped lower to $1,775 an ounce as the VIX fell below 16, near to its pandemic-period lows. — Lenore Hawkins and Chris Versace
3. Can Tesla Stock Stage a Comeback in the Second Half of 2021?
Shares of electric vehicle manufacturer Tesla (NASDAQ: TSLA) were on an absolute tear in 2020 and gained close to 800% last year. However, since the start of 2021, Tesla stock is down 3.4% and is currently trading 23% below its record high. Comparatively, the S&P 500 Index has returned close to 14% year to date. — Finscreener
4. The Micro Case for Transitory Inflation
US inflation continued to soar in May, with the Core Consumer Price Index (CPI) up 0.7% month over month and 3.8% year over year—its highest annual rate in more than 25 years. That worries investors, and understandably so. Even moderately higher inflation erodes the real value of investment returns and often leads to higher interest rates. But is higher inflation here to stay? We don’t think so. — Susan Hutman, Robert Hopper and Eric Winograd
5. Who Is NOT Your Ideal Client as a Financial Advisor?
Every financial advisor is looking for ideal clients. yet only 25% of advisors have a clear definition of who an ideal client is. ( The Future of Practice Management, an inaugural study by the FPA Research and Practice Institute a program of the Financial Planning Association® (FPA®) -December 2013.) That means that 75% of financial advisors don't know who their ideal client is and 100% of them don't know who their ideal client is not. — Grant Hicks
6. ESG Investing: The Great Wall Street Money Heist
Wall Street is once again in the midst of a “money heist” from naive investors. This time in the form of “woke activism” called ESG. ESG refers to the Environmental, Social, and Governance risk theoretically embedded in a business. However, while ESG investing is about taking these risks into account in investment decisions, these are all the things NOT on a company’s balance sheet or earnings statements. Such is the inherent problem. — Lance Roberts
7. When to Have Fee Discussions
At the start of a client/financial advisor relationship there is extensive paperwork that must be completed and acknowledged received, including information regarding fees. The level of understanding of those fees, or if the client is even aware or paying attention to the forms they are signing is a completely different story. Once that newness wears off, how often do clients want to discuss fees? How often do they feel their financial advisor talks about fees with them? — Catherine McBreen
8. "Uber"-ise to Transform a Good Practice into a GREAT Business
The million-dollar-question for financial advisers (literally!) is: “How do I go about leveraging a good professional practice into a great business that is worth heaps?” Answer: Uber-ise it. The inherent assumption in this question is that one already has a good professional practice, so let’s take that as a given for this discussion. The answer to the question lies in understanding how a lever is used to deliver greater power or force than is otherwise possible to shift a weight, and then applying that strategy to the growth of a business. — Tony Vidler
9. Advisors, It's Time to Talk Taxes with Wealthy Clients
Admittedly, there's still a lot of moving parts here, but at least for now, it looks like the Biden Administration and Republicans have an infrastructure agreement in place. Obviously, things can change on Capitol Hill and that's particularly true in today's bitterly partisan environment, but it looks like some infrastructure spending will be happening. Granted, it's on a much more watered down scale than the White House was hoping, but those are the breaks when the climate is contentious and Congressional majorities are razor thin. — Todd Shriber
10. 6 Tips for Financial Advisors To Engage Their Contact List
With the heavy emphasis on social media marketing, many have said that email marketing, and sending email newsletters in particular, is outdated. That couldn’t be further from the truth. Why do I know that? Because the financial advisory business is a relationship business and there’s no better method for cultivating relationships in a digital environment than email marketing. Why? Because it’s inexpensive, easy to manage, gets quicker than most results, and it reaches your clients and prospects where they spend a lot of their time—in their inbox. — Don Connelly
11. How The S&P 500 Could Hit 5K, 2K Or Both
There could be potential for upside, but at what risk? Here’s one investor’s 5-year view. Wall Street forecasts about the future direction of the economy, stocks, bonds and other assets are easy to find. Many investors would probably put it another way: forecasts are impossible to get away from! Here’s another way to look at market predictions, using the real-world tradeoffs that drive what investors really care about. — Rob Isbitts