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Investors Panicking About Market Volatility Should Go Work In The Garden (Financial Advisor Magazine)
Many investors have a tendency to panic when market volatility increases. As a result, the primary focus for many advisors is to keep their clients from making poor investment decisions during market downswings.
Clients should turn off the television and the Internet, and just go work in the garden, says DiGiovanni. “Ninety-five per cent of the time, the best advice is to just sit tight,” instead of worrying he says.
He adds that there are only two times that investors should seriously tune into the market: when the price/earnings ratio drops below 10 (like during the tech bubble burst) or when the price/earnings ratio rises about 25 (like in 2008) because “both are great opportunities.”
Global Private Wealth Is Going To Reach $US369 Trillion In 5 Years (Financial Planning)
Global private wealth is going to grow by 40% up to $US369 trillion over the next five years, according to Credit Suisse Group AG. More than 25% of that growth will come from emerging markets.
“We expect to see a big improvement in the position of emerging economies over the next five years… Asia and particularly China will account for the largest portion of newly created wealth among the emerging markets,” the Credit Suisse report said.
Retirees Should Spend 4% Of Their Money Per Year During Retirement (Advisor Perspectives)
When thinking about spending in retirement, there are two important questions to think about, says Bill Sharpe. First, how much money a retiree has, and second, how long he thinks that he will live. Generally, retirees should spend 4% of the amount of money they have per year.
Some retirees determine their spending based on market moves. “You might assume that if you just lost 40% of your savings, the markets are going to feel really sorry for you and work very hard to go up more than they would others. If you believe there are predictable cycles and you can count them, then that might justify some degree of neglect of the current value of your assets.”
“Personally, I don’t believe that it makes sense to assume that there is sufficient mean reversion in the markets to just say, ‘I’m going to spend that $US40,000 increased for inflation, and it matters not whether I have $US200,000 or $US3 million left,'” writes Sharpe.
“Regional broker-dealers, typically more cash poor than their larger brethren, that are indeed adding value and creating differentiating rep/adviser/client experiences, need to become more creative in how they compete in this arms race,” writes Gary Martino.
Smaller firms should consider offering equity in the firm or parent company to higher producing wealth management groups. Equity has the potential for higher payout in the long-run (which is enticing to potential hires), and also gives new hires the potential to grow with the firm.
“While global growth is likely to remain meager and below trend, it’s not collapsing,” writes Russ Koesterich. “Though growth in most of the developed world, as well as in China, does appear to be decelerating, there are a few bright spots, including India and the United States,” because diverging growth remains a big global economic trend.
Investors should be prepared for slower growth, but not another recession. Koesterich adds that investors should raise allocations to the assets that will still preform well even when growth is tepid.
“In particular, investors may want to take on some selective risk in asset classes that have become less expensive. One example of such an asset class: US high yield,” he writes.
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