FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Wirehouses Are Looking For More Female Advisors (The Wall Street Journal)
Women account for just 10 – 30 per cent of the wealth management industry and the industry needs more female advisors, according to The Wall Street Journal. This is because female investors are representing a larger portion of high-net-worth individuals and many trust female advisors more according to the report.
Where We Are In The Stock Market Cycle (Gluskin Sheff)
A recent poll of 48 economists by Bloomberg showed that no one has a recession probability that is higher than 30 per cent. The Fed meanwhile is being “accommodative”.
What’s more? “The correlation between the Fed balance sheet and the S&P 500 at 87% is more than 4x what it has been in the past and now tops the correlation the market has with earnings! Now that is a new normal.”
Photo: Gluskin Sheff
Not Only Is A Correction Likely, The Bull Market Might Be Nearing Its End (Comstock Partners)
Everyone’s been celebrating the recent stock market highs but when investors and the media agree on the market that is usually cause for concern.
“The market’s positive beginning to the year is far from unique, and is not much different than the start of each of the last three years. 2010 began with a gain in the S&P 500 of 9.2% only to be followed by a 15.6% correction. Similarly, the next year started with an increase of 8.4% and then corrected by 19.4%. Early last year the market gained 13.1% before dropping 10.5%. So far this year the market has jumped 9.6%, similar to the gains of the prior three years.
How To Reduce Risk From Stock Exposure (Advisor Perspectives)
“With investor sentiment extremely high and serious domestic and foreign problems still unresolved, we think that not only are the chances for a major correction quite high, but that the entire market rise since March 2009 may be coming to an end.”
Investors that have loaded up on bonds are in a difficult spot because of low yields while those that have loaded up on stocks risk massive losses. Instead, Seth Masters of Alliance Bernstein recommends “a modest allocation to inflation-sensitive assets (sourced proportionally from both stocks and bonds) would significantly reduce the risk of large short-term losses for a portfolio with a 60% allocation to globally diversified stocks and a 40% allocation to diversified intermediate-term municipal bonds, the display below shows.”
A Eurozone Shockwave Is On Its Way (Societe Generale)
Societe Generale analyst expect a Eurozone shockwave in spring and that it will be drive currency markets this year. In Italy there’s political uncertainty around the elections and the concomitant concern “reforms will surely be on the backburner for another six months at least”.
“Germany, now six months into a general election, will not be keen to share further risks and tolerate policy slippage. …It is far too early to dismiss EA [euro area] crisis as a key driver. We fear another shockwave in the spring.”
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