How Financial Advisors Can Ask Their Clients About Charitable Giving Without Offending Them

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Advisors Need To Talk To Their Clients About Gift Giving (The Wall Street Journal)

As we near the holiday season more investors are going to start thinking about charitable giving. While some advisors are wary of offending a client that doesn’t or doesn’t “feel expert enough in tax planning and other financial aspects of philanthropy,” they should still broach the subjects with their clients reports Veronica Dagher at The Wall Street Journal. Advisors can do this by reviewing the previous year’s gifts with clients and going over the ones they were most satisfied with, Cassidy Burns of Minneapolis-based Riverbridge Partners told the WSJ. They could also review all the clients assets since some assets “offer tax advantages as charitable gifts.”

Investors Need To Identify Valid Strategies And Learn To Act When Whatever Drove Them Out Of Fashion Stops Getting Worse (The Aleph Blog)

“There are valid theories on investing, and they work on average,” writes David J. Merkel of The Aleph Blog. “Strategies trend. There is an underlying kernel of validity; it makes economic sense, and has worked in the past. But any strategy can be overplayed, even my favourite strategy, value investing.”

Merkel thinks the key is to be aware of what is “out of fashion, and to be ready to invest when that which drives a strategy to be out of fashion stops getting worse.” One example could be when you see headlines proclaiming the death of a certain strategy.

That said, Merkel identifies 10 valid strategies that investors should watch. “1. Value 2. Price momentum 3. Long-term mean revision 4. Insider buying 5. Neglect (low volume relative to market cap) 6. Accounting quality (net operating accrual) 7. Low equity price volatility (which isn’t working now, because it became too popular). 8. Shrinking assets 9. Shrinking shares (buybacks) 10. High gross margins as a fraction of assets (‘Quality,’ a quantitative measure of moats.)”

For A Real Impact From Alternative Investments, Investors Should Increase That Allocation To At Least 20% (Morningstar)

Speaking at the InvestmentNews Alternative Investments Conference in Chicago, Nadia Papagiannis, director of alternative fund research at Morningstar said investors should start with an allocation of at least 5% into alternative investments. But for this to truly register on their portfolio they need to increase this to 20%.

“If I were doing it, I would pick an equity long-short strategy, a managed-futures strategy and a market-neutral strategy as a kind of bond substitute, and I would equal-weight them into the portfolio,” Investment News quotes Papagiannis saying. “Prior to 2008, a lot of investors were too heavy into equities, and now a lot of advisers are telling me their clients are too heavy into bonds.”

The State Of The Global Economy In 19 Anecdotes (Deutsche Bank)

Contrarians Should ‘Sell Stocks Till Your Hands Bleed, And Then Sell Some More’ (Morgan Stanley)

Ever since the Fed refrained from tapering its asset purchase program, some analysts have revised up their S&P 500 price target. But Morgan Stanley’s top economist Joachim Fels says that “if you happen to be a contrarian, you should probably sell stocks till your hands bleed, and then sell some more.”

“If you happen to be a contrarian, you should probably sell stocks till your hands bleed, and then sell some more. Why? All the five seasoned investors representing large pools of money on the panel I moderated at our 4th annual Global Economics & Strategy Day in Frankfurt on Friday were constructive on equities, and almost all of the around 200 investment professionals in the audience seemed to agree. …While I have a strong contrarian streak, I confess I side with the consensus at the moment, along with our own strategists who are constructive on developed-market equities.”

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.