FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
How stocks react to an election year (Stock Trader’s Almanac)
Stock Trader’s Almanac says the final year of a term used to be the second best performing of the presidential cycle, but the 8-year terms of Bill Clinton, George W. Bush and Barack Obama have altered those results. In fact, the market has performed worse during the eighth year of a presidential term than any other year, losing an average of 13.9% since 1920. Additionally, 2015 was the Dow’s first losing year ahead of an election year since 1939. The next two years saw double-digit losses amid the outbreak of World War II.
The Fed kept policy on hold (Business Insider)
In a 10 to 0 vote, the Federal Open Market Committee kept its benchmark interest rate between 0.25% — 0.50%, as expected. According to the statement, the Committee is “closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation, and for the balance of risks to the outlook.” Because this was an “off-cycle” meeting, there’s no accompanying Chair Yellen press conference nor staff economic projections.
Ray Dalio says the 75-year debt supercycle is ending (Business Insider)
Dalio, the founder of Bridgewater Associates, says central banks will soon be unable to stimulate growth using cheap debt. In an op-ed article for the Financial Times, Dalio said debt supercycles typically lasted 50 to 75 years and that the end of today’s cycle is near. Dalio pointed to 1935 as an example, saying this scenario was referred to as “pushing on a string.”
Betterment’s 401(k) platform is live (PR Newswire)
Robo-advisor Betterment has announced the launch of its 401(k) platform, Betterment for Business. The plan invests its participants in “a globally diversified portfolio of index-tracking exchange-traded funds (ETFs) .” Betterment Founder and CEO Jon Stein said in the press release, “Betterment for Business is the only turnkey 401(k) service that includes personalised investment advice for all plan participants. The era of expensive, impersonal, unguided retirement saving is over.”
Morningstar named its “Managers of the Year” (Investment News)
Morningstar has crunched the numbers from over 1,000 fund managers to come up with its list of “Managers of the Year” for 2015. The team of Keith A. Lee, Robert E. Hall, Kempton M. Ingersol, Damien Davis, and Andrew J. Fones won the award for Domestic Fund Manager of the Year after their Brown Capital Management Small Company fund rose 8.8%. Meanwhile, Robert Lovelace and his team won International-Stock Fund Manager of the Year after their American Funds New Perspective Fund gained 5.3%. Fixed-Income Manager of the Year was awarded to Jerome Schneider after his PIMCO Short-Term Fund returned 1.37%. Finally, the awards for Allocation Fund Manager of the Year and Alternatives Fund Manager of the Year went to Vanguard’s duo of Michael Reckmeyer and John Keogh, and Vanguard’s team of James Troyer, Michael Roach, and James Stetler .
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