Wealth Management Blog | WrapManager (11)

When is the Right Time to Hire a Tactical Money Manager?

Posted by Michael J. O'Connor | CWS®, Vice President Investments

January 19, 2018

When is the Right Time to Hire a Tactical Money Manager?

Let’s start with a more basic question: what is a tactical money manager? To answer that, an investor must first understand “tactical asset allocation,” which is an active management portfolio strategy that aims to capitalize on certain anomalies and/or events in the markets.

Many tactical money managers try to actively trade around such anomalies to gain a leg-up and produce what’s known as ‘alpha’ in a portfolio. Often times, the tactical money manager sees a situation in the market – whether it be bullish or bearish – and attempts to navigate a portfolio through it, with the aim of making a profit or avoiding a loss. In many cases, the manager may allocate back to the original asset mix once the ‘event’ passes, but not always.

Calculating the Impact of Expense Ratios on Returns: Doug's Quiz Corner

January 19, 2018

How Does An Expense Ratio Impact Returns? Consider this scenario: Your friend Martha has just invested $100,000 in a mutual fund that has an expense ratio of 1.50%. She has discovered an alternative investment that is very similar to the mutual fund she purchased but has an expense ratio of 1%. She is considering switching to the lower cost investment but isn’t sure if 50 basis points in an expense ratio will make much of a difference in her returns going forward. Assume both investments return 8% per year, each year for the next 10 years before expenses. What is the difference in ending dollar value between the mutual fund with an expense ratio of 1.5% and the alternative investment with an expense ratio of 1% at the end of 10 years? [+] Read More

BlackRock Evaluates Tax Overhaul Winners and Losers

January 18, 2018

Investors need to look beneath the surface to identify the longer-term winners... The Tax Cuts and Jobs Act is poised to boost a U.S. economy already running at full capacity. A windfall from lower taxes and incentives for capital expenditure could spur more consumer and business spending and corporate deal-making. A likely convergence in tax rates could create winners and losers, rippling across sectors and companies. Read an excerpt of BlackRock's evaluation below, or download the complete commentary. [+] Read More

Financial Planning for…Pet Owners?

January 17, 2018

For about 85 million Americans, owning a pet is a joy and marvel of everyday life. Indeed, according to the 2017 - 2018 National Pet Owners Survey, about 68% of US households own a pet. This marks a remarkable 56% increase from pet ownership levels in 1988, the first year the survey was conducted. That’s a lot of furry and fuzzy (and fishy and flighty) friends across the country. Many of these pets are considered a part of the family because of the companionship they offer. According to a 2015 poll, 95% of pet owners in America think of their animal as a member of the family; even going so far as to buy them birthday presents! This perhaps explains why for many, no amount of money can replace the happiness and health benefits of owning a pet. [+] Read More

JP Morgan Guide to the Markets for 1Q 2018

January 11, 2018

JP Morgan Quarterly Guide to the Markets JP Morgan’s Guide to the Markets for the first quarter of 2018 is now available for your review. The comprehensive 71-page guide includes 65 pages of charts illustrating: Trends across equities, the economy, the fixed income sector and international investing Returns and valuations by style and by sector Fixed income yields and returns Annual returns and intra-year declines of the S&P 500 Investor allocation by region The power of compounding The retirement savings gap [+] Read More

A New Era of 401(k) Millionaires

January 10, 2018

Fidelity Investments recently produced research that unveiled a surging population of 401(k) millionaires: women. According to Fidelity’s findings, the share of women who have accumulated $1 million or more in retirement plans has doubled over the last 12 years (based on data from 15 million retirement plan participants in Fidelity 401(k) accounts). As of the end of September 2017, about 20% of Fidelity’s 401(k) millionaires were women, which is up from less than 10% in the same period in 2005. What does it take to grow a 401(k) to $1 million and above? Many things, but if we were to narrow it to just three, it would be: consistent saving, smart investing, and time. The women in Fidelity’s research have leveraged all three to become millionaires. [+] Read More

The Final Tax Bill – Special Report

December 28, 2017

On December 22, 2017, President Trump signed into law the tax legislation known as the “Tax Bill.” The majority of the tax law’s provisions go into effect in January with just a handful delayed until 2019 or after. The signature provision of the law – and where the biggest tax cut was dealt – fell to corporations, where the tax rate was cut from 35% to 21%. A cut this sizable could have a direct impact on corporate earnings, which could flow-through to stock prices in the near to medium term. [+] Read More

JP Morgan Recaps Year-End Economic Data

December 28, 2017

JP Morgan's weekly update offers a snapshot of changes in the economy and potential implications for investors. This week's investment themes include: • Earnings growth, coupled with slowly rising interest rates, makes stocks look attractive in relative terms. • High-yield bonds look more attractive than Treasuries, but a diversified approach to fixed income investing seems appropriate given Fed tightening. • International exposure is warranted given growth prospects abroad, and a weaker dollar can enhance foreign returns. [+] Read More

Have you heard of the “January Effect”?

December 27, 2017

You many have heard people speak about the "January Effect," but what does it actually mean? In short, the January Effect is a concept suggesting that the first month of the year tends to experience a seasonal increase in stock prices. Some even take the anomaly a step further, suggesting that a positive January means a positive calendar year. With January around the corner, does the “January Effect” concept hold water? Let’s investigate. [+] Read More

Nuveen Reviews 2017 Predictions and Looks Ahead to 2018

December 21, 2017

As the year draws to a close, it appears more of our predictions are correct than not... We have been describing 2017 as a “Year of Transition." We expected improving economic growth, accelerating corporate earnings and rising interest rates. We also predicted rising volatility amid equity market leadership changes. Depending on movements of a few basis points for the 10-year Treasury yield, we are likely to get either 7 or 7½ of our 10 predictions correct. Read an excerpt of Nuveen's 2017's predictions in review, or download the entire investment commentary as a PDF. [+] Read More