Retirement

This morning's seasonally adjusted 1.314M new claims, down 99K from the previous week's revised figure, was worse than the Investing.com forecast of 1.375M.

The global pandemic may be just what’s required to address the environmental crisis once and for all, says former U.S. Vice President Al Gore.

Here are the red flags that your client is sneaking and creeping around with another advisor.

What does the ratio of unemployment claims tell us about where we are in the business cycle and our current recession risk?

An increasing number of people, especially more mature and sophisticated clients, are looking for a one-stop-solution to automate estate planning.

If you missed Part-1 of our series on the “Theory Of MMT Falls Flat When Faced With Reality,” start there. In Part-2, we complete our analysis of the theory and the potential ramifications. The premise of our discussion was this recent explanation of “Modern Monetary Theory” by Stephanie Kelton. As discussed previously, economic theory always sounds much better than how it works out in reality.

This commentary has been updated to include Thursday morning's release of Nonfarm Employment. June's 4.8M increase in total nonfarm payrolls had revisions that resulted in 90K more jobs than previously reported. The Investing.com consensus was for 3M jobs gained and the unemployment rate to decrease to 12.3%.

While the “annuity puzzle” is well-documented in the academic literature, there is no “mutual fund puzzle.”

I read The Black Swan shortly after it came out. The financial crisis and Great Recession were brewing, and I was already beginning to predict a recession. We sensed something big was coming but didn’t know the details. Rereading my September 2007 review of Taleb’s book is an eerie glimpse into the past. It’s also a good reminder that more big events lie ahead.

As you read this, the Financial Planning Association is engaged in one of the most consequential initiatives in its history, and for some reason this important program is getting zero publicity.

The sharp decline in interest rates this year has created the opportunity to realize tax savings on appreciated fixed income positions even when clients are in a high tax bracket.

Much was written about a strategic “opportunity” to do a Roth conversion when the coronavirus caused the stock market to decline by more than 30%. The tactic was based on a tremendous tax savings that you would receive. But this is not always the case.

Those who have been methodically and faithfully contributing as much as they can to traditional IRAs, 401Ks, and other tax-favored plans, can find themselves in a higher tax bracket in retirement once their RMDs kick in.

This morning's employment report for June showed a 4.8M increase in total nonfarm payrolls, which was above the Investing.com forecast of 3M.

After years of losing both clients and clout in financial markets, signs are emerging that hedge funds are back in favor in the U.S.

We have heard from five prospects that our site looks “dated.”

After years working with those age 65-plus in their transition to the Medicare system, I’ll share some ideas and tips that will lead to some great conversations between you and your clients – and, likely some added revenue for your practice.

COVID-19 headlines dominated equity market action last week, with the S&P 500 suffering a near-3% decline; although all is not grim. The number of virus cases has been spiking in states that opened earliest—including my new home state of Florida, which went from a mid-60s average age for confirmed cases to the current mid-30s average age.

Incredible as it may sound to nearly all observers – once they learn what MMT says – its basic economic tenets are agreed to by most knowledgeable economists. The dispute is not really over its core economic model; it is over fears of its perceived political implications.

If you haven’t heard of Modern Monetary Theory, or “MMT,” you will soon. If you recently lost your job due to the economic shut down, and received a stimulus check, you are already a beneficiary. As we will discuss in Part-1 of this two-part series, MMT’s theory falls flat when faced with reality.

Personal Income (excluding Transfer Receipts) in May rose 1.56% and is down 5.5% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 1.46%. The real number is down 6.0% year-over-year.

With the release of this morning's report on May Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal -4.91% month-over-month change in disposable income was at -5.00% when we adjust for inflation. This is a decrease from last month's 13.07% nominal and 13.59% real decreases last month. The year-over-year metrics are 8.28% nominal and 7.69% real.

The health crisis creates opportunities to unite historically disparate investor groups to help build economic and market sustainability and resiliency.

The latest proposed rule change may make it harder for ESG funds to attract interest from retirement plans.

While technicals for the asset class remain a headwind in the near-term, bank loans may provide an attractive opportunity and relative value.

Let me help you learn from my mistakes. I’m a tech nerd. I go all-in when I find new tools that can improve my business.

The COVID-19 crisis poses a big challenge for employers to rationalize the benefits they offer to employees. With budgets stretched and every dollar scrutinized, tough choices loom on DC plan offerings, in addition to programs like financial wellness.

If you were told that someone would offer you $750 for indebting each of your clients’ children, you would think they had lost their mind. But this is how student lenders operate.

Rich hedge fund managers are talking about it. So are not-so-rich millennials. And fast-twitch gamers, and bored sports fans and -- in all likelihood -- some 15-year-olds you know.

Automatic enrollment initiatives build on one of the most important findings in behavioral science.

If not for yourself, make a succession plan for the best interests of your clients and team members.

The tumultuous environment illustrates why a risk tolerance assessment exercise inspires confidence in clients.

Get the ins and outs of green bonds in this two-part series. Let’s start with the basics.

Returns for most fixed income asset classes are positive so far this year, but the numbers mask the rocky road markets have traveled since January.

Looking to generate income from your nest egg? Make sure you don’t get it all from just one basket. Karen explains two funds designed to provide income that aren’t over reliant on any one source.

Target-date portfolios that use carefully chosen defensive equities are best equipped to protect from coronavirus market turmoil and volatility in general.

A brief monthly update on what's happening in the municipal bond market.

Over the course of history, during world wars, pandemics, financial crises, and deep recessions, municipal bond defaults have been an extremely rare occurrence. There have been less than 700 rated municipal bond defaults in the over 100 years of public finance existence. As a point of comparison, we saw over 117 corporate defaults in 2019 alone.

Read Harold Evensky's latest NewsLetter.

As our pandemic-related troubles continue, stock dividends have been shrinking. The negative trend presents a challenge, especially for retirees and others who depend on their portfolio income.

Month-over-month nominal sales in May increased by 17.7  (17.69% to two decimal points). Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, increased by 17.8% (17.75% to two decimal points).

Over the last several years, we have recognized what has been going on with negative or near negative interest rates in Japan, and is now bleeding into parts of Europe. We never imagined that those troubles from afar would be any more than banter amongst economists and financial doomsdayers. The reality of those environments have now made it to the shores of the good ol’ USA.

Investors often think of municipal bonds, which are sold by local and state governments to fund public projects like building new schools and repairing city sewer systems, as being totally tax-free—but that’s not always the case.

Franklin Templeton’s 2020 US Retirement Income Strategies and Expectations survey revealed the importance of having a plan to help reduce financial-related stress—particularly relevant amid today’s uncertainties. Our Felix Touchard discusses some findings of the survey, and how respondents feel about their financial future.

The SEC’s Reg BI and the CFP Board standards will be enforced June 30. Those rules and standards abandon core principles of the Investment Advisers Act of 1940 that have protected investors for decades.

Reg BI takes effect June 30 and will encourage the acceptance and transmission of conflicts of interest. This rulemaking is a historic, giant step backwards in securities regulation.

The way to get people to think about death is to imagine that by doing so they will never die. Recognizing this universal character trait will lead to more productive planning outcomes.

I’m doing some wild things to stir up my Zoom calls. These ideas may be too radical for you. But humor me, read on and let me know what you think.

The selloff this week was “perfectly normal,” according to the math. Find out why it makes sense to have a long-term investment horizon.

Why did stocks rise over the past month despite grim economic news? The Federal Reserve’s massive liquidity injection is one reason.

Puerto Rico’s debt attracted investors throughout the U.S. for its higher yields and because the securities are tax exempt in all 50 states. Bondholders now wonder if they will ever get repaid.

The Fed has increasingly unorthodox policy options if the economy remains mired in a protracted downturn.

We've updated this series to include the May release of the Consumer Price Index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $42,6256, down 4.2% from 45-plus years ago.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.

Companies see suspensions as a way to boost cash flow and avoid or limit job cuts -- although furloughs and layoffs have been plentiful this year.

Rationalizing high valuations won’t improve future return outcomes.

This year marks the 100th anniversary of the renowned investment firm Tweedy Browne. The firm was originally a broker, and one of its clients was Benjamin Graham. I interviewed six members of Tweedy, Browne’s investment committee.

Between mid-February and late March 2020, we saw a “take no prisoners” market crash. Anything with a whiff of perceived risk crashed, in direct proportion to its perceived risk. The only assets that soared—because of tumbling interest rates—were long Treasury bonds, and with them, the net present value of pension obligations.

With the recent market rally, stocks are again near their all-time highs. But we face a perilous economy, coupled with the threat of a resurgence of the coronavirus. Here’s what I tell clients who are dead-certain that the stock market is due for a significant correction.

If your clients are in need of additional funds during this pandemic, Congress has made one source more available if you are fortunate enough to have an account balance in your retirement plan and your plan has adopted the new provisions allowed by the CARES Act.

What strategies should donors use to make high-impact, tax-efficient gifts?

From a performance perspective, I give robos an “A” for being average, and hope that future research can make more meaningful statements as to how robos truly impact investor outcomes.

Warren Buffett “should have kept airline stocks because the airline stocks went through the roof today,” President Trump said this week. It’s a good thing that investors chose not to follow Buffett’s lead, as airline stocks are up 50% since his exit.

Bruce Bond is co-founder and CEO of Innovator Capital Management. Having cofounded PowerShares Capital Management in 2003, he is recognized as one of the pioneers of the ETF industry. I spoke with him about the explosive growth in flows to defined-outcome ETFs.

Scott Minerd, Chairman of Investments and Global CIO, and Mike Milken, Chairman of the Milken Institute, discuss at a Goal 17 Partners web event the government and private-sector response to COVID-19.

Over diversifying an LDI manager roster may have important hidden costs.

In normal times, COBRA coverage presents challenges for those who are eligible for Medicare. Throw in COVID-19 and your clients face perilous decisions about their health care.

As the economic fallout from COVID-19 threatens peoples’ livelihoods and erodes their short-term savings, it follows that their long-term financial security is also at-risk. What does it all mean for retirement savings and what steps can we take to build a more resilient system?

Critics says the Labor Department is inappropriately using the coronavirus to loosen restrictions on 401(k) investments.

The concept of define-outcome investing has evolved from the use of options in conventional portfolios to structured notes and now to turnkey funds and ETFs that offer built-in downside protection with participation in the market upside. Those ETFs and related products have become extremely popular in this environment, where advisors and their clients are tuned in to the higher level of market volatility and the fear of a large market downturn.

For many of your high-earning clients, 529 plans still make sense.

Wounds heal but scars last. That’s an old lesson from history and will also be the case as far as COVID-19 is concerned. We already know from empirical evidence in China that consumers are in no rush to come back on the streets of the big cities, and why would it be any different elsewhere?

How do you market to prospects in emotional lockdown, conserving not only their money and toilet paper, but their engagement with anything or anyone around them?

The advisory industry is unaware that the traditional asset-location rules (i.e, put bonds in tax-deferred accounts and stocks in taxable accounts) don’t work in our low interest rate environment. The exact opposite is appropriate for most retirees.

For planners to help clients identify and articulate their values, goals, and purposes planners need a deep understanding of the interplay between technical and personal decision-making factors.