Posts tagged: russel

Five key ways advisors deliver value

“For the past five years, we’ve created an annual report that holistically analyzes the real value advisors deliver  to their investor clients in their portfolios, in vital services advisors provide. Today’s advisors may be challenged to articulate the material value they deliver. That’s why it’s so important to provide a simple, easy-to-follow equation that shows the full value of an advisor’s services. It’s as easy as ABC, and then some:


Value of an Advisor = A+B+C+P+T


A is for Annual rebalancing

When markets are rising, it can be easy to underestimate the importance of disciplined rebalancing. We believe rebalancing is vital, because it is designed to help investors avoid unnecessary risk exposure. Imagine you have a hypothetical balanced index portfolio that has not been rebalanced. In certain market conditions, it could end up looking more like a growth portfolio and expose the investor to risk they didn’t agree to. The annual rebalancing an advisor provides can help keep that from happening.

We believe there are two reasons that many end investors don’t rebalance if left to their own devices:

1. Because it’s an easy thing to forget to do. Investors know they’re supposed to do it. We also know we’re supposed to change the batteries on our smoke alarms once a year. But do we really do it?

2. Because, in many cases, rebalancing may be the equivalent of buying more of what’s been hurting my portfolio and selling what’s been doing well. It may run counter to what an investor’s gut feelings are telling them they need. Rebalancing takes discipline. Advisors can help deliver that discipline and help position investors for long-term success. Read more »


Is a bear market looming?

“So far 2016 has proven to be an uneven year for investors, with some roller-coaster market swings that left more than a few stomachs churning. For markets to dive into bear territory (down 20%) and stay there, it’s almost imperative that we tip into recession or depression. Take a look at this chart:

Represented by the S&P 500® Index from 1926-2015. Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Indexes are unmanaged and cannot be invested in directly.

It shows calendar-year S&P 500 index returns from 1926-2015, and the rates of return. The years with the worst returns – drops of 10% or greater – almost invariably correlate to some kind of financial calamity. The exceptions are 1966, which was just a bad year for stocks, and 1941, the dawn of World War II. The very worst years (1931, 1937, 2008) correlate with the start and middle of the Great Depression, and the recent Great Recession”.

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