WrapManager's Wealth Management Blog

The stock market felt a sting last week, with the Dow dropping 3.5% and marking its worst week since November 2011. A majority of the decline took place on Friday, when the Dow fell some 320 points, or almost 2%. The S&P 500 slid 2.6% on the week, which was its largest weekly decline since May 2012, and technology stocks followed suit as well with the NASDAQ selling off 1.7% and posting its worst week since last August. The sell-off last week has naturally caused some investors to wonder, is this pullback the start of a stock market correction? Below, we’ll address that question for you and look at past stock market corrections. Corrections Are a Normal Part of Bull Markets That’s not WrapManager making that statement - history makes it for us! As you can see in the chart below, the average intra-year decline for the S&P 500 since 1980 is 14.4%. Put another way: for the last 34 years, the average drop within a given year for the S&P 500 is 14.4%. [+] Read More

If you were to ask us to answer that question in short, here’s what we would say: Remain calm, patient, and try not to make decisions based on emotion. As we've written before on stock market corrections, they can be rather unnerving, but at the same time they are a normal part of rising markets, and they’re usually short-lived. It’d be great if the market always went up in a straight line, but unfortunately it does not and there are often pullbacks along the way. So, knowing that corrections will likely occur quite a bit over time, what’s the best investment strategy for handling a stock market correction? We go back to the statement we made at the beginning of this post. Remain Calm Often times when the market starts to decline, you’ll see a lot of news headlines that invoke worry about the state of things. A top headline today on Bloomberg, for instance, read: “US Stocks Retreat Following Worst Week Since 2012.”1 That certainly doesn’t make many people feel warm and fuzzy about the market. [+] Read More

The world’s largest asset manager, Blackrock, conducted an investor survey in 2013, asking 17,600 people in 12 countries how they felt about the markets and their personal financial situations. There are a lot of data points to consider, but one in particular stood out to us: about 50% of respondents are concerned they are going to outlive their savings.1 Many of these respondents could feel concerned simply because they don’t know where they stand. An investment plan can provide a little clarity (and perhaps a wake-up call) to investors wondering if their nest egg is going to last throughout retirement. Think of an investment plan as a manual, there to help you keep track of your progress toward building a successful retirement. What Exactly is an Investment Plan? An investment plan is a comprehensive report that takes a detailed view of an investor’s assets, liabilities, current spending needs, future spending needs, investments, asset allocation, and goals, and uses all of that information to project/estimate how “on-track” an investor is to reaching their objectives. [+] Read More

International money manager Cambiar Investors' fourth quarter investment commentary reviews their outlook for the international equity markets and the performance of their International and Global equity portfolios. From the commentary: "Global equities continued their dramatic ascent into the fourth quarter, with many indices closing 2013 at their high of the year. A diminishing sense of crisis, coupled with growing evidence of improving economic activity, awakened investors’ animal spirits, and global equities were the direct beneficiary of this increased optimism." Download Cambiar Investors' Full Commentary Here Get Free Research Reports on Cambiar Investors [+] Read More

Dividend money manager Federated Investors is out with their latest investment commentary, which discusses their outlook for the economy and the performance of their Strategic Value Dividend Managed Account Strategy. From the commentary: "December capped a year-long rally in U.S. stocks that saw the major indexes reach record highs.The advance was fueled by a domestic economy that, nearly five years after the recession, finally appeared to be gaining enough traction to allow the Federal Reserve to begin easing off the gas." Download Federated's Full Commentary Here Get Free Research Reports on Federated Investors [+] Read More

Before we discuss the three items, we’d like to be clear about something first and foremost—there’s nothing really “magic” about a “magic number.” Many investors place a lot of focus on setting a “magic number” (the amount of assets that, in theory, gives a person the ability to retire while maintaining the same standard of living and meeting all of their needs) and reaching it, but it’s important to understand that reaching that number in and of itself doesn’t solve every retirement income need. An investor has to constantly assess their asset levels relative to their needs throughout retirement. 3 Important Factors to Determining a Retirement Nest Egg Target 1) Be Conservative When Establishing Your Life Expectancy According to the Social Security Administration, a man reaching 65 today can expect to live, on average, until age 84. For a woman, that number is 86. But those are just averages—about one in every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. [+] Read More

For investors seeking income-producing alternatives to fixed income/bond investments, many turn to dividend focused strategies. WrapManager evaluates and conducts research on many dividend focused money managers, though one in particular has stood out in recent years: the Brookmont Dividend Equity Strategy. It could be a solution for an investor looking to allocate a portion of their portfolio to a dividend focused strategy. [+] Read More

During our working years, the amount of income we earn is ultimately what shapes the spending and lifestyle choices we make. Over time, we become accustomed to living a certain way and having certain resources available to us and our families. These parameters are what create a person’s standard of living. Retirement is different, of course, since we derive retirement income in different ways and from different sources. As a person makes the shift from the working world to the retirement world, an important question must be addressed: do you have the resources and assets needed to maintain the same standard of living in retirement as you did during your working years? Is your nest egg big enough? Almost Half of American Households Won’t Have Enough Retirement Income Research suggests that when it comes to maintaining a standard of living during retirement, many investors could be in trouble. [+] Read More

With uncertainty surrounding the current and future interest rate environment, some investors are seeking potential alternatives to holding bonds in their portfolios. Dividend strategies surface as a popular alternative, given they can provide income and the potential for equity-like returns. When searching for dividend strategies, many investors inquire about money manager Zacks Investment Management, which has appeared on our Monthly Top Ten Most Researched Money Managers. For investors wanting to learn more, below we’ll provide information about Zacks’ Dividend Strategy and its investment objectives. (This is for informational and comparison purposes only. WrapManager is not affiliated with Zacks Investment Management, and it has not approved for use nor entered into contracts with them.) [+] Read More