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U.S. equities now account for 49% of the global stock market. “A portfolio investing solely within the U.S. stock market thus automatically excludes over one-half of the global opportunity set,” writes Christopher Philips at Vanguard.
He thinks U.S. investors should consider a 20% allocation to international securities. “Allocations closer to 40% may be suitable for those investors seeking to be closer to a market- proportional weighting or for those who are hoping to obtain potentially greater diversification benefits and are less concerned with the potential risks and higher costs,” Philips writes. “On the other hand, allocations closer to 20% may be viewed as offering a greater balance among the benefits of diversification, the risks of currency volatility and higher U.S. to non-U.S. stock correlations, investor preferences, and costs.”
How Advisors Can Draw Female Clients (The Wall Street Journal)
A Boston Consulting Group study found that by 2014, women would control $US30 trillion of the world’s wealth. And advisors not making an effort to involve women are missing out on a huge opportunity, writes Jacqueline Ko Matthews of Virginia-based PJMint. “Not only do women represent a giant segment of the investing population, but evidence shows that they tend to be very good long-term investors; the kind of investors that make great clients,” she writes.
So what do advisors need to do to appeal to women? “Women want facts, they want to understand how products work, and they want to be engaged. Women don’t want to answer a questionnaire about age and risk tolerance and then wait for an adviser to come back to them with a recommendation about how they should allocate their assets.”
“There are more hints of a melt-up in stock prices, that could be a more serious threat than any geopolitical blowup to my prediction that the secular bull market could run for another two years or longer,” writes Ed Yardeni. On Tuesday the forward P/Es for the S&P 500 was 15.4.
“Bullish sentiment has rebounded sharply during the past few weeks. The Bull/Bear Ratio compiled by Investors Intelligence fell from a recent high of 4.23 during the week of December 24 to 2.40 during the week of February 11. Over the past three weeks, it has bounced back to 3.62.”
JP Morgan Securities Is Recruiting Aggressively (Investment News)
JP Morgan recently hired six advisors that collectively managed over $US1.2 billion. And now they’re cranking it up a notch by hiring recruiters to help. JP Morgan Securities has now signed the ‘Protocol for Broker Recruiting’ reports Mason Braswell of Investment News. This offers advisors some legal protection when they take client information with them while changing firms.
“I think they were just trying to maintain after the great recession,” Rick Rummage, a career consultant told Braswell. “Now they’re making sure their deals are competitive and making sure their platform is competitive along with their product offerings because at the end of the day, people have to know they’re in the market, and most advisers didn’t.”
We Could Be Up Another 26% (S&P Capital IQ)
The S&P 500 hit a new intraday high on Thursday, exactly five years after it hit an intraday low of 666.79 on March 6, 2009. “Should this bull market celebrate its sixth birthday, and perform similarly to prior sixth-year bulls, we could be up another 26% to beyond 2340,” S&P Capital IQ’s Sam Stovall earlier this week. Of course, past performance does not guarantee future results.
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