FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
A Florida woman was charged with ripping off immigrant investors so that she could buy a boat and go on a cruise (Think Advisor)
The SEC alleges that Florida woman Lin Zhong and her company used nearly $US1 million of investor funds to purchase a boat, a BMW, a Mercedes, to pay off personal real estate taxes, and even to go on a Carnival cruise.
“Investors were also falsely told that US EB-5 Investments would prepare and provide un-audited financial reports to investors, the SEC complaint says, and that Zhong and EB5 Asset Manager ‘falsely claimed that certain investors’ funds would be held in escrow until the form filed by potential EB-5 investors to petition the US Citizenship and Immigration Services (USCIS) for immigration status received that agency’s approval,” reports Melanie Waddell.
It’s not just the wealthy who spend a lot post retirement (Financial Advisor Magazine)
A new study by the Employee Benefit Research Institute suggests that in the first two years after work 54.1% of retirees spent less or the same as before, while 45.9% spent more. Moreover, out of those who spent more, 28% upped their spending by 20% or more annually.
“It might be tempting to think the splurges are limited to the wealthy who can afford to travel to exotic locales, but the researchers found the spending increases occur across all income levels,” writes Ted Knutson.
Active management is a good idea right now, probably (Advisor Perspectives)
“The growth of passively managed funds adds to market inefficiency by increasing the prevalence of price indiscriminate buyers and sellers. This can create inefficiencies that active managers can exploit,” writes Paul Doyle of Columbia Threadneedle Investments.
“Weakening global liquidity means that there will no longer be a rising tide of liquidity that lifts all boats, and dispersions in the returns offered by individual stocks are likely to increase,” he added.
Tech has historically done well immediately after Fed rate hikes (Charles Schwab)
“Since 1994, the information technology sector has shown the best performance during the six months following an initial Fed rate increase. Energy has come in second, followed by financials, with utilities and consumer discretionary bringing up the rear. Using a larger sample size and going back to 1973, which includes seven Fed rate-hiking cycles, we also see tech near the top six months after an initial hike, but financials near the bottom,” notes Brad Sorensen.
“However, that reverses when we look at a 12-month time period: Over the longer time span, financials move to the top, while tech slides to the middle of the pack. Interestingly, the most consistent result across all categories has been the underperformance of consumer-related sectors — both the consumer staples and consumer discretionary sectors lag,” he adds.
An Oppenheimer & Co. team just switched over to Jefferies (Bloomberg News)
Jefferies Group scooped up a 6-member Oppenheimer & Co. team led by Greg Fisher to run a custody and emerging-market bond business, reports Katia Porzecanski.
The “team is based in Atlanta and includes financial advisers Carlos Alvarez, Matthew Kennedy and Greg Johnson, said the person, who asked not to be identified discussing personnel issues. They started this week and report to Michael Armstrong, global head of wealth management, the person said,” reports Porzecanski.
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