Let’s start with an example. Say you hire a money manager on January 1 of a New Year, and your objective is to give that manager one-year to prove his or her worth. After one year, the manager produces a +20% return for your investment portfolio. That’s fantastic, right? Not necessarily! What if that manager’s focus/approach was to manage a portfolio of global stocks, but the MSCI World (an index that tracks global stocks) was up +40% that year? In that case, his or her performance was not so great comparatively. That’s an example of how you can use ‘benchmarking’ as an investment tool—it gives you a metric to measure a manager’s performance on the basis for which you hired them. Looking at the performance of different asset classes can help make the point clearer. [+] Read More

Volatility has persisted throughout the start of 2016, to the point where it almost feels relentless. Coping with volatility is rarely easy for investors, and the fact that we’ve experienced the worst 10-day start to a calendar year1 has many wondering if it makes sense to shift away from equities for now. No one can say with certainty whether the stock market will recover quickly and finish the year positive. But what we can control is how a portfolio is allocated in a volatile environment. For investors, we think it is less about: “should I go to cash and/or be more defensive?” and more about: “is my portfolio diversified sufficiently (to help reduce volatility), and should I consider including a tactical strategy in place designed to take defensive action in a prolonged downturn?” In other words, we think it is more important to have confidence in your asset allocation versus trying to forecast what's ahead for the markets. [+] Read More

The beginning of the year is a good time to closely review your investment plan and make an assessment of how well it’s working for your family. Are you on track to meet your goals? Is your advisor managing your investment portfolio pursuant to your needs (producing sufficient income and/or growth)? And above all, are you happy with the service? A good rule of thumb in our opinion is that if you think your overall experience can be better, then it should be better. There’s really no need to ‘settle’ when it comes to choosing a financial advisor you can trust and who meets your expectations. You’ve worked hard to build your nest egg, and you deserve an advisor who can help you grow it and meet your retirement income needs over time. Here are four warnings signs that your current advisor may not be that person. [+] Read More

For all the media coverage garnered by the Federal Reserve (Fed) and the potential for interest rate hikes, you rarely encounter basic explanations of how the Fed actually functions. Simple questions, like: How and when was the Federal Reserve formed, and for what reason? How are meetings structured/scheduled, and what are the guidelines for making decisions? The Federal Reserve is arguably the most watched financial institution in the world, yet we’d venture to say that even many expert advisors are unaware of some of the basic ins-and-outs of how it works. We’ll cover a few of those here. (In)Frequently Asked Questions about the Federal Reserve How and when was the Federal Reserve formed, and for what reason? [+] Read More

Recent market volatility has likely raised fresh doubts with some investors about where the market is headed from here. The S&P 500 and the Dow Jones both fell over 10% in just a few trading days late in August,1 and concerning headlines about growth in China have persisted over the last few weeks (though the market has recovered a bit over that time). But don’t let the volatility lure you away from your long-term investment strategy. As investors, it’s tempting to experience declines (especially when they happen quickly like in August), and to want to react—to take your portfolio more defensive or to sell out of stocks altogether. It’s human nature, but it can also hurt more than it helps. The repercussions of ‘reacting’ can indeed have a significant impact on the investment returns you generate over time. Take a moment to study the chart below. As you can see, with $10,000 invested over 20 years, you would have over $65,000 had you stayed invested even throughout two bear markets. But if you missed just the 10 best days over that time, you would have an eyebrow-raising $30,000 less. That’s more than half of what you could have earned, in just 10 days! Miss the 40 best days, and you actually end up losing money. [+] Read More

For many people approaching retirement age, there may be trepidation about how to properly plan for your retirement lifestyle. Unfortunately, without having a trusted advisor along for the ride, the journey toward retirement can feel a lot like planning a trip to the moon without an engineer. There are many unknown aspects about what will happen once you actually retire. How will your new-found freedom affect your spending habits? What will be the state of the economy at that point in time? Will you stay where you are, or travel, or permanently relocate? Hire an Advisor A good first step to successful retirement lifestyle planning is to find a financial advisor that can help to answer questions you have about how your investments can work for you as you approach retirement and beyond. As your employment situation changes, your income will fluctuate and the tax laws regarding your income will also likely change. A knowledgeable advisor will be able to tell you which changes will directly impact you based on your current situation, in conjunction with your CPA, can help formulate a plan to take advantage of the best tax breaks and plan investments accordingly. [+] Read More

Corporate earnings had a rough go of it in the second quarter—total earnings for S&P 500 companies were down -2.1% from the same period last year, on -3.4% lower revenues.1 It would be one thing if earnings were falling while revenues went up, which would indicate companies may have spent more over the quarter on fixed investments, more hires, or higher wages, for example. But the data clearly shows that top line revenues are falling alongside earnings, which means there could be an issue with softening demand. As you can see from the chart below, earnings also fell from the fourth quarter of 2014 to the first quarter of 2015. With earnings getting weaker as market volatility increases and China worries build, investors may wonder if a more cautious portfolio strategy is warranted from here. [+] Read More

When it comes to a retirement planning strategy, no person is an island. The decisions you make regarding your retirement will affect other people, and their plans will affect your strategy. Therefore, it’s critical to consult with members of your family, your spouse, professionals you work closely with, and your financial advisor as you develop your retirement planning strategy. Let’s take a closer look at the reasons behind this collaborative approach to your retirement plan. Work with Your Spouse If you're married, the most important person you should consult with on your retirement plan is your spouse. Together, you have tackled financial issues for years, and together you’ll plan for the future. Whether or not your spouse has worked in the past will greatly impact your retirement planning strategy. How much will your spouse collect in Social Security payments? Does your spouse have a pension, 401(k), or IRA that you’ll need to factor into your strategy? How is your spouse’s health? Will your spouse’s health care impact your future financial needs? [+] Read More

One of the many aspects of WrapManager that I love so much is the diversity of our clients from a geographic standpoint. We have clients all over the country. Given that WrapManager is headquartered in San Francisco, however, we do not have the opportunity to see a lot of our clients in person as much as we would like. Because of this WrapManager has always strived to be at the forefront from a technology standpoint, especially when it comes to services like Go to Meeting or Join Me, to allow us to bring our clients onto our computers for quarterly reviews. I commonly say that using a service like Join Me allows a client to feel like they are looking over my shoulder at my computer screen together with me. We have local clients that even prefer to utilize this technology during our quarterly reviews because it allows them to see our screen comfortable in their own home. [+] Read More