The Wall Street Journal recently asked Morningstar to conduct a study on “five-star” mutual funds, to get an idea of how many were able to maintain their top rating over 10 years (July 2004 – July 2014). What they discovered will likely surprise you. Of the 408 mutual funds reviewed, the majority of them no longer had five stars. This and another study by S&P Dow Jones Indices underscore the common fallacy that investing in a five-star mutual fund increases the likelihood of a positive long-term outcome.1 Determining which funds to invest in should go well beyond a five-star rating system. In fact, you need a financial advisor who is dedicated to your needs and specializes in independent and ongoing assessment of investment options. High net worth investors should consider separately managed accounts instead of mutual funds given potential tax and visibility benefits. [+] Read More

It’s that time of year again—time to look back, review your investments and look forward to the coming year. Below are a few areas and tips to review with your Wealth Manager during your upcoming quarterly review. Be sure to provide as much information as possible so that any needed adjustments can be made to your investment plan, accounts and investments. Tax Planning Strategies Capital losses are deductible against capital gains. In 2014, up to $3,000 in net capital losses may be deducted against ordinary income. If you had net capital loss amounts in excess of $3,000, you may carry the excess forward indefinitely.1 [+] Read More

JP Morgan’s quarterly Guide to the Markets provides a wealth of information about the economy, stocks, fixed income and international markets, mainly displayed in easy to understand charts and graphs. It represents a one-stop shop for information that is often hard to find and scattered among multiple sources. These are just a few pieces of information you will find in the Guide: The current state of the US and international economies Interest rates and inflation Annual returns and intra-year declines Fixed income sector returns Outlook for US, international and emerging stock markets Download the Guide Here [+] Read More

Your Financial Advisor is there to keep an eye on your investments and make adjustments to keep your finances on track. But if your journey through retirement is going to stay on track, you should regularly check in with your Financial Advisor as your life and the economy change. These reviews (at least quarterly) give you an opportunity to evaluate your goals and make adjustments to your investment and retirement income plan. They also help make sure your investment strategies are still appropriate for you. It is also a good time to take care of housekeeping items such as updating beneficiaries. Tasks like these may seem minor, but they could have a big impact on your finances if they’re neglected. It doesn’t take long to review your investment plan with your Financial Advisor. Just an hour or two per quarter can keep everyone on the same page and help you to meet your goals. [+] Read More

For all the talk there’s been over the last two-plus years of a looming stock market correction, one has yet to take hold. The S&P 500 had a banner year in 2013, is up this year +4.15% through August 1,1 and has been in a fairly steady climb since 2012. For two years, the market has resisted a correction in the 10% - 20% range.2 In July, however, the S&P 500 posted its first monthly loss since January, and on July 31 saw its biggest point drop since April.3 It’s possible this weakness marks the beginning of a stock market correction, though no expert can know with certainty. What we do know, however, is that corrections are a normal part of bull markets, and there are steps you can take when one occurs. What to Do During a Stock Market Correction Corrections are generally defined as relatively short-lived pullbacks in the market in the 10% - 20% range, something we haven’t seen since the summer of 2012. As you can see below, over the last 34 years the market experiences average intra-year declines of -14.4%. Past Stock Market Corrections and Declines (Click chart for larger version) Source: Standard & Poor’s, FactSet, J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during the year. For illustrative purposes only. *Returns shown are calendar year returns from 1980 to 2013 excluding 2014 which is year-to-date. Guide to the Markets – U.S. Data are as of 6/30/14. [+] Read More

If you want to add more yield-producing investments to your portfolio, one option for you could be master limited partnerships (MLPs). They could help increase your portfolio’s overall yield and improve your retirement income strategy. MLPs – which invest largely in oil and gas assets – are experiencing a revival and currently pay attractive yields relative to traditional income producing assets, like dividend-paying stocks and US Treasuries:1 Asset Class Yield and Correlation (Click chart for larger version) Source: Newfound Research LLC. Yield on a given day is calculated using smoothed 12-month trailing dividends. Yield presented in the table is computed as of 3/31/2014. Correlation is calculated as Pearson correlation of monthly returns between the asset class ETF and the S&P 500 ETF “SPY” from ETF inception to 3/31/2014. [+] Read More

John Bogle, the founder of Vanguard Funds, has a piece of advice for investors: “Don’t be captivated by the siren song of the market.” Here’s a tip we’d add: turn off CNBC.1 Watching too much CNBC (and other financial news networks) can lead to information overload and result in short-term thinking and reactionary investment decisions, neither of which helps investors succeed over the long-term. As Bogle puts it, “impulse is your enemy.”1 With a nearly 24-hour financial news cycle, it’s easy to get caught up in latest trends and excitement of the market, but often what you see on CNBC is little more than dramatized financial reporting designed to invoke emotion. We think you can be a better investor by simply turning it off. Here are 5 reasons why. [+] Read More

As we enter the second half of the year, there are three main things you should be factoring-in to your portfolio strategy: 1) The Possibility of a Stock Market Correction A significant amount of time has passed since the last sizable market pullback (10% or more), and history tells us one could be on the way.1 2) You May Not Have Enough International Exposure International stocks have not rebounded as quickly as US stocks during the recovery, and the case for international growth looks strong at the moment. Yet, many US investors remain under-allocated to international equities.1 3) Adjusting Your Portfolio from a Risk-Managed Perspective This is a constant with investing, but as we enter the 5th year of this bull market it becomes increasingly important. Consider tactical money manager strategies with the ability to go to cash in the event of a prolonged market downturn.1 [+] Read More

The first half of the year was positive for stocks and most of the fixed income markets, and economies around the world showed signs of continued recovery and expansion – a good start to the year.1 Global Economy Performance and Outlook (Click chart for larger version) Source: J.P. Morgan Global Economic Research, J.P. Morgan Asset Management. Forecast and aggregate data come from J.P. Morgan Global Economic Research. Historical growth data collected from FactSet Economics. Guide to the Markets – U.S. Data are as of 6/30/14. As we look ahead to the back half of the year, there are three topics many investors are wondering about. We break those down below and assess what we think the market impact could be. 3 Factors that Could Affect the Investment Landscape Will Interest Rates Start to Rise? Interest rates are currently near historical lows, and actually fell slightly in the second quarter.1 However, Federal Reserve policy discussions indicate they could potentially tick higher over the course of the year. As always, it’s important to understand how rising interest rates would affect your fixed income portfolio. [+] Read More