WrapManager's Wealth Management Blog

Investor sentiment shows more signs of fatigue than euphoria... Equity markets have greeted positive earnings reports largely with indifference. Investor sentiment shows more signs of fatigue than euphoria, even as stock markets have repeatedly reached new highs this year. Yet we see solid fundamentals and returns in the second half, with the latter largely tracking earnings growth. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug discusses returns on foreign investments. [+] Read More

There are countless studies out there trying to answer questions about how – and why – men and women invest differently. Do men tend to take more risks? Are women better at committing to a long-term strategy? Should advisors take different approaches with men and women as a result? A comprehensive study performed by Merrill Lynch offers a somewhat surprising, but also no-nonsense explanation when it comes to finance and investing—men and women aren't all that different. Human beings, no matter what their gender, all share a common trait that can affect how we make investment decisions – our emotions. On the other hand, the strengths of a good investor, such as patience, analytical attention to detail, and long-term focus are common across both men and women. In this post, we will take a look at some of the findings of Merrill Lynch’s research paper, titled “Women and Investing: A Behavioral Finance Perspective.” Perhaps the most important finding of them all, however, comes straight from the lead researcher and Head of Behavioral Finance at Merrill Lynch Wealth Management, Michael Liersch: “What should really drive investment decisions are your financial priorities, and those are very personal. They have nothing to do with gender.” [+] Read More

Risks Appear Tilted to the Upside for Stocks Although economic data was positive and earnings continued to be strong, U.S. equities were mixed last week. Markets appear to be in a holding pattern, with investors waiting for more news on Federal Reserve balance sheet normalization and tax policy. For several months, volatility has remained low while equity prices have grinded unevenly higher. This has prompted many investors to look for signposts that could cause a change in direction. Possible dangers could include the end of emergency zero-interest-rate policies, high global debt levels, slow productivity growth or political instability caused by such issues as widening income inequality or rising protectionism. Read an excerpt of the complete commentary below, or download the entire investment commentary as a PDF. [+] Read More

The Federal Reserve (Fed) met on July 25 and 26 with little fanfare, since they did not end up raising interest rates. In a statement, the Fed said the job market continues to strengthen, but inflation remains somewhat of a concern. Inflation metrics have fallen below the 2% threshold the Fed considers healthy, and as such the central bank will be “monitoring inflation developments closely.” The Fed gets quite a bit of media attention, and it got us thinking: for many normal investors and retirees, the Federal Reserve is probably an institution shrouded in mystery. What is the Federal Reserve? How did they come into existence? Are they as important as everyone says they are?1 There is no way we can cover all of that ground in this post, but we figured offering four little-known facts about the Federal Reserve could at least help readers get to know the institution a bit better. Here they are: [+] Read More

Most investors would readily admit that past experiences in the markets tend to influence their decision-making over time. At best, our mistakes can inform us what to avoid in the future. At worst, we allow certain experiences to create unproductive biases in our mindset. A good example of such a bias could be the tendency of Depression-era investors to avoid stocks altogether following that time period, given the scars left behind from such a difficult experience. The problem with such a bias, can be the creation of an even bigger opportunity cost in its wake—the opportunity cost of not participating in the gains that followed. [+] Read More

We see stability in commodities prices but are selective in related stocks and bonds. Industrial metals have generally outperformed their commodity peers this year, with copper prices hitting a two-year high last week. A big reason for the rally: production has been falling from last year’s levels. This is a result of firms cutting capital expenditures after multi-year price slides. Read an excerpt of Richard Turnill's weekly commentary below, or view the entire weekly investment commentary here. [+] Read More

"Dividend‐ growth stocks remain more attractive than most high‐dividend‐yield stocks..." Investor and consumer confidence remained optimistic in the second quarter as capital markets continued an upward advance and volatility remained dampened. The global economy continued to gain momentum as all the world’s largest economies showed signs of growth while the U.S. consumer remained in good shape. Despite an encouraging backdrop there are some areas that continue to struggle such as traditional retail and energy, which we will continue to monitor as we construct our portfolios. [+] Read More

There are thousands of money manager strategies out there, but not every money manager is a good fit for every investor. If you’re trying to find the money managers or investment strategies that are right for you – and that could help you reach your investment goals – you might feel totally overwhelmed going through all the different options. We’d like to help clear some of the confusion for you. Each quarter WrapManager’s Investment Policy Committee (IPC) compiles a short list of money manager picks in order to help investors like you discover and evaluate different money manager strategies. These investment strategies encompass a wide range of asset classes and investment disciplines so you are introduced to as many new strategies as possible. This quarter, the WrapManager IPC has selected four strategies. [+] Read More