How Financial Advisors Are Compensated

The fees that investors pay to financial advisors for their advice and services come in two basic forms: transaction fees and ongoing fees. While advisors may differ in what fees they charge, they are required to fully disclose them. Transaction Fees These fees are generally one-time fees assessed at the time a transaction is made. Examples of transaction fees include: Commissions Paid on the purchase and sale of a stock.¹ Mark Ups / Mark Downs [...]


Four Really Good Reasons To Invest

Forty-six percent of Americans do not own any stocks or stock-related investments, such as mutual funds, according to a recent Gallup poll.¹ Individuals may cite different reasons for not investing, but with important long-term financial goals, such as retirement, in the balance, the reasons may not be good enough. Why Invest? Make Money on Your Money You might not have a hundred million dollars to invest, but that doesn’t mean your money can’t share in [...]


Investment Challenges Of The Affluent Investor

High-net-worth investors face investment challenges that some would consider unique to their financial status. The fundamental tenets of investing apply equally to them as with any other investor, but the affluent investor needs to be mindful of issues that typically arise only from substantial wealth. Let’s examine a few of these. Being Too Conservative — When an individual has more assets than they think they’ll ever spend, there can be a tendency toward conservative investment. This [...]


Don’t Be Your Own Worst Enemy

One of the most well-known investors of the 20th Century, Benjamin Graham, said that “the investor’s chief problem—and even his worst enemy—is likely to be himself.”¹ What Graham understood—and modern research is catching up to—is the idea that we all have emotions and biases that affect our decision-making. The innate wiring built to survive pre-modern times can be counterproductive in our modern world, especially when it comes to investing. Let’s take a quick look at [...]


The Utility Of Sector Investing

There is a growing popularity among individuals to broaden their investment strategy beyond conventional allocations and investment styles. Some see sector investing as a way to seek new opportunities for enhanced portfolio performance.1,2 Sectors are made up of companies grouped by similar businesses that range from natural resources to financial services and from technology to consumer staples. In any given year, one sector may outperform another. For example, in 2017, technology rose 34%, while energy [...]


The Anatomy Of An Index

Did you know that more than $7.8 trillion in assets are benchmarked to the Standard & Poor’s 500 Composite Index, including $2.2 trillion in index assets?¹ The S&P 500 is ubiquitous—we see it on the TV news, read about it in the newspapers, and very likely see some of our own investments’ performance compared against it. For an index that represents approximately 80% of the value of the U.S. equity market, it may be worthwhile [...]


Investing With Your Heart

Some individuals believe that return on investment shouldn’t be the only criterion for how they invest their money. For them, the social impact of investing is just as important—perhaps, more important. The history of socially responsible investing stretches at least as far back as the mid-18th century, but its more modern form began taking shape in the 1960s, amidst the fight for civil rights and the emerging anti-Vietnam protests. More than $8.7 trillion is managed [...]


The Ivory Tower Changes Wall Street

For as long as there has been a stock market, investors have sought a reliable framework to determine the future direction of prices. Success has been elusive. But thanks to the work of three American economists, we operate today with a better understanding of what determines an asset’s price than the generations of investors that came before us. For their work, Eugene Fama, Lars Peter Hansen, and Robert Shiller were awarded the 2013 Nobel Memorial [...]


A Taxing Story: Capital Gains And Losses

Chris Rock once remarked, “You don’t pay taxes, they take taxes.”¹ That applies not only to income, but also to capital gains. Capital gains result when an individual sells an investment for an amount greater than his or her purchase price. Capital gains are categorized as short-term (a gain realized on an asset held one year or less) or as long-term (a gain realized on an asset held longer than one year). Long-Term vs. Short-Term [...]