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When Adjusting Your Portfolio In 2014, Consider Some Of 2013’s Losers (WealthManagement.com)
Instead of chasing investments that had a successful run in 2013, Tim McLaughlin of WealthManagement.com suggests that investors try a contrarian approach and go after “2013’s real stinkers.”
“Take the Nuveen Tradewinds Value Opportunities Fund. The $US562 million fund was the second-worst performing U.S. mutual fund in 2012, according to Lipper data that compared how the fund stacked up against its peers,” he writes. “The fund posted a 2.05 per cent return, underperforming its peer funds by 13.28 percentage points, according to Lipper. But if you’d thrown your cash behind the fund in 2013, you would be up 24 per cent while beating its benchmark and peer funds by 3 points and 1.4 points, respectively.”
The SEC filed 686 enforcement actions in the fiscal year that ended in September. The $US3.4 billion in penalties resulting from these actions were up 10% on the year and were a record high. Many of these actions were against stock exchanges and other participants, with the largest single penalty coming from NASDAQ, which agreed to pay a $US10 million penalty for the Facebook IPO fiasco. “A strong enforcement program helps produce financial markets that operate with integrity and transparency, and reassures investors that they can invest with confidence,” Mary Jo White, Chair of the SEC, said in a press release.
The Top 5 Resolutions Of Financial Advisors In 2014 (ThinkAdvisor)
A survey of 800 advisors by SEI Advisor Network shows the five top resolutions for advisors as they head into 2014. 1. 85% of those polled said their top resolution for 2014 was increasing referrals from current clients. 2. Not center most knowledge about client relationships in a few key people, with 67% citing this as a top priority. 3.Integrate technology into their practice not only because more clients will expect it but because it will increase efficiency, with 59% citing this as a priority. 4. Reaching out beyond their own network in finding new clients, with 59% citing this as a priority. 5. Advisors pledge to be more selective when picking new clients, with 48% citing this as a priority.
Short-Term Investment Results Are Dictated By Luck (Credit Suisse)
Credit Suisse’s Michael Mauboussin thinks short-term investment results are largely dependent on luck, but not necessarily for the reason than one might think. “There is a lot of skill in markets and investors themselves are all very similarly skillful — this is reflected in prices,” Mauboussin said in a video from Credit Suisse.
“As a consequence, that leaves more to luck and is the reason why short-term outcomes can mostly be put down to luck. Having said that, any serious study of past investment performance demonstrates that differential skill does play a role. Some investors clearly have more skill than others. But, by and large, especially in the short-term, luck mostly dictates the results.”
Fidelity Investments think that couples should jointly attend financial planning meetings. 31% of women say their husbands are the primary contact, compared with 13% of men who say their wives are, according to a Fidelity study cited by FA Mag. Men worry about their spouse being unprotected in the event of their death, but their failure to jointly participate in the financial planning process can lead to just that.
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