FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Economic Sanctions Are Ineffective For The Most Part (Advisor Perspective)
“[T]he effects of sanctions are often fairly disappointing,” writes Kenneth Rogoff. “So much so, that many scholars have concluded that such measures often are imposed so that governments can appear to domestic audiences to be ‘doing something.'”
Even Russia’s current economic problems seem to be the result of the collapse in oil prices, rather than the economic sanctions imposed by the West.
However, one instance where sanctions actually worked is South Africa in the 1980s. Additionally, sanctions “helped bring Iran to the bargaining table,” but still, “it is not clear how long its government will be willing to defer its nuclear ambitions.”
Finra Doesn’t Publicize All The Red Flags (The Wall Street Journal)
Finra doesn’t publicize all the regulatory red flags it has about brokers, and state regulators have started requesting more expansive disclosure, report Jean Eaglesham and Rob Barry.
“The Journal found at least 38,400 brokers have regulatory or financial red flags that appear only on state records, which in most cases aren’t available without contacting state regulators. Of those, at least 19,000 had completely clean BrokerCheck records,” they report.
The Solar Stocks Are Plunging Right When The Industry Has Become A “Juggernaut” (Financial Advisor Magazine)
Many industries have been struggling to generate serious growth in the slowing global economy, but the solar industry is on fire. Nevertheless, in recent months, solar stocks have plunged.
“The pullback in solar stocks — and the solar ETFs — comes at a time when industry conditions are booming. That disconnect, due in large part due to a misperception about the impact of falling oil prices, creates a great entry point for investors focused on this industry’s long-term trajectory,” writes Rick Roberts.
Advisers Need To Start Making Cybersecurity A Priority (InvestmentNews)
Only 30% of financial advisers are planning on investing in cybersecurity next year, according to the InvestmentNews Outlooks 2015 survey. Additionally, advisers didn’t even list cybersecurity as a major concern.
“However, if anyone is listening to the Securities and Exchange Commission, state regulators and the Financial Industry Regulatory Inc., all of them want financial firms to better arm themselves against cyberattacks,” writes Liz Skinner.
“I talk again and again about the consumer being 70% of the US economy, and as they spend, business has to follow suit,” says Bob Johnson. “So, we love it when the adjustments are based on bigger consumer spending; we’re not so happy when it’s inventory based.”
That being said, Johnson believes that 5% GDP is not sustainable for the long-run.
“I do not, and I may be a little bit unusual there. I’m thinking that it will be 3% or less in the fourth quarter. I think the consumer will continue to do well and will be part of the number,” but the 3rd quarter growth was aided by government and the fact that the US is growing while everyone else is shrinking.
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