FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
5 investment rules (Financial Planning)
Financial Planning says you should follow these five investing rules. 1) Make sure you are not straight up gambling. 2) Don’t take both sides of a bet. 3) Do not borrow at a higher rate than you are lending at. 4) Always go with the lower cost fund, compared to the higher cost fund. 5) Make sure your cash is federally insured.
The Federal Reserve is hoping to avoid a repeat of 1937. At that time, the US was believed to be emerging from the Great Depression, and the Fed hiked interest rates. As it turns out, the economy was on shaky ground, and the rate hike caused the economy to roll back over. According to CNBC, “traders at the Chicago Mercantile Exchange aren’t pricing in a hike until December.”
The bond market could become less liquid when rates rise (Charles Schwab)
It is widely believed the Federal Reserve will raise interest rates at some point in 2015. Charles Schwab thinks liquidity risk is the biggest concern for bond investors. According to Schwab, “The fear is that if too many investors try to exit their bonds, bond funds or ETFs at the same time, it will either make it difficult for investors to get a reasonable price on the bond they’re looking to sell or clog up the bond market’s pipes altogether and cause a steep drop in prices.” In order to protect your bond investments, Schwab says, pay attention to liquidity, know your time horizon, monitor cash levels in your bond funds and avoid selling at fire-sale prices.
Baird lands a group from Wells Fargo (Think Advisor)
Baird announced it has landed a team of six advisors from Wells Fargo. The group, led by managing director Don Barry, brings $US1.1 billion in assets under management and almost $US5.5 million in yearly commissions. “The advisors joining our team are extremely talented with decades of industry experience and an excellent cultural fit with Baird’s unique values,” noted Steve Stroker, regional director of Baird’s Private Wealth Management business.
Mike Tyson’s former advisor was charged by the SEC (Financial Advisor)
Brian J. Ourand, the man who used to manage Mike Tyson’s money, was charged with misappropriating “at least $US670,000 from three high-net-worth individuals.” Ourand’s former firm, SFX Financial Advisory Management Enterprises, and their COO, Eugene Mason, were issued a cease and desist order for failing to keep Ourand under control. Mike Tyson had previously filed a lawsuit against Ourand and SFX taking $US5 million from him and causing him to lose out on future income.
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