FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Women Have A Huge Disadvantage In Long-Term Care (Financial Planning)
Women live an average of four years longer than men. For financial advisors, that means that women make more long-term health claims than men, and for longer durations, too. They hold 58% of long-term care policies, and make 67% of the claims.
Because most states have gender-based pricing, single women pay 20-40% more than single men for long-term claims. A single, healthy 55 year old woman will pay an average of $US1,125 for a policy providing $US164,000 in current benefits. A single, healthy 55 year old man will only pay $US925 for the same thing.
Advisors need to take these numbers into account when putting together long-term financial plans for women.
Look Outside The US As Q4 Rolls Around (BlackRock Blog)
Right now the “economic and monetary environment overall remains supportive of equities,” according to Koesterich.
BlackRock analysts recommend looking at stocks and bonds outside of the US. “Increasing international exposure makes sense in general, but even more so these days when most stock market bargains are found overseas,” writes Koesterich.
While US stocks are expensive right now, non-US stocks are relatively cheap. Investors should keep an eye on “stock market bargains” in Japan, according to Koesterich. Additionally, he says that BlackRock still likes China.
The Recent Sell-Off In Junk Bonds Isn’t A Long-Term Trend (AllianceBernstein)
There’s a debate going on right now whether the recent sell-offs were indicators of a major buying opportunity, or are an “ominous” sign of something terrible to come. AllianceBernstein analysts believe that the recent sell-off was a short-term trend.
“As we see it, the decline in high-yield bonds was mostly due to technical influences: outflows from retail high-yield funds teamed up with record-setting issuance to soften markets. Add in a couple company-specific problems… and the high-yield market was down more than 2% in September. Of course, retail flows could continue to exit high yield, pressuring returns. But from our view, most of the selling has been by broker-dealer firms and hedge funds — not long-term investors,” write Rudolph-Shabinsky and Distenfeld.
They add that the on-going market turmoil “may be an investor’s best friend” because it extends the credit cycle, which makes companies “more careful and thoughtful with their resources.”
High-Net-Worth Millennials Still Tend To Keep Their Parents’ Advisors (Wealth Management.com)
Around 49% of the off-spring of high-net-worth individual keep their parents’ advisors, according to a new study by Morgan Stanley and Campden Research. An additional 20% say that it is “somewhat likely” that they will, and only 15% say that it is “not at all likely” that they will.
Just two years ago, 62% of heirs said they were “somewhat or highly likely to fire their parents’ advisor,” and in 2009 a whopping 86% said the same thing. In other words, there is a trend in the post-financial crisis for rich millennials to increasingly rely on the same financial advisors as their parents.
Oil prices have completely crashed in the last few weeks, but investors should still consider some oil-services stocks.
“We think that leading oilfield-services companies have wide economic moats, based on their intellectual property. The increasing complexity and capital intensity of oil and gas drilling is creating significant opportunity for these companies over the next five or 10 years, regardless of where the cycle takes them in the near term,” writes Coffina.
He adds that specifically Morningstar’s picks are Core Labs, Schlumberger, and National Oilwell Varco. The “driver of the moats for all three of these companies would be the intangible assets.” Schlumberger does a lot of research and development, and National Oilwell Varco has “done over 200 acquisitions and has rebuilt how we think about oil rigs and hwo they work.”
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