FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
How Emotions Can Lead Investors Astray (BlackRock)
“Each person has a different perspective on the markets. But many admit that buying low may never feel ‘right.’ Oftentimes, emotional instincts drive investors to do the exact opposite. Being aware of your emotional state is important to making clearly reasoned investment decisions,” according to BlackRock. Using hypothetical emotions and a hypothetical $100,000 investment they show how emotions can misguide investors.
91% of advisors expect business to be better in 2013, that in 2012, but they’re not as optimistic about the economy, according to a poll at SEI Advisor Network’s conference in Dallas. 41% expect “slow but consistent growth,” 40% expect a near-term correction, and 13% expect a recession.
A Valuable Lesson From Pre-Retirees That Dumped Stocks In Early 2009 (Fidelity Investments)
A new report from Fidelity shows that 1.6% of pre-retirees, or the 55+ age bracket, that ditched stocks from their 401(k) by Q1 2009 and never rebalanced saw their balances grow 25.9%. Their average balance grew from $80,2000 to $101,000. Meanwhile, the average balance for pre-retirees nearly doubled from Q1 2009 to $255,000.
“There is a valuable lesson to be learned from the minority of pre-retirees who abandoned equities altogether and experienced significantly less progress,” said James MacDonald, president, Workplace Investing, Fidelity Investments in a press release. “It underscores the combined importance of a proper asset allocation and savings behaviour as they planned for retirement within all that life entails.”
Emerging Markets Capital Flight Has Been The Big Story This Week (Bank of America)
Emerging market equity funds saw $2.9 billion in weekly outflows this week, the biggest in 18 months.
Broker Dealer Reportedly In Violation Of Capital Requirements (Investment News)
Independent broker-dealer Allied Beacon Partners reportedly told its advisors that its capital reserves were below levels required by industry standards to continue operations, according to Investment News. This means that Allied brokers can now sell, but not buy securities for their clients. Two Allied Beacon subsidiaries have been the subject of investor lawsuits in the past.
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