3 reasons why now is a good time to talk to your clients about inflation
Three reasons why we should still be talking about inflation (CFA Institute Blog)
David Allison offers three reasons in particular why investors should still be talking about inflation right now: 1) It's always important for advisors to manage expectations of their clients by discussing how different levels of inflation could affect their portfolios and financial plans. 2) The popular inflation hedges are historically cheap right now. 3) Inflation influences the stock-bond correlation, and investors shouldn't necessarily count on a negative stock-bond correlation in the future.
"Conversations about inflation risk may be difficult to start in today's economic environment. But investors and their advisers would be better served having a difficult conversation now, rather than a panicked one later," concludes Allison.
Even if you get a poorly-timed windfall, you can still end up on top (The AB Blog on Investing)
The AB Blog on Investing put together an interesting hypothetical scenario of a retiree coming into an inheritance of $7 million on January 1, 1999. The two things to note are that 1) our imaginary hero faces two bear markets, and 2) since he is a retiree, his time horizons appear to be short.
Despite the two market downturns, our hypothetical retiree's conservative 60/40 portfolio would've never fallen below his "core-capital needs," writes Seth J. Masters. Indeed, the retiree's wealth ended up rising well above his core needs during the market recovery from early 2009 to midyear 2015. (You can see this below on the chart: The darker line is above the lighter line already during 2010.)
It's a reminder that sticking to a sound long-term plan can be successful, even during the worst of market downturns.
There are 4 major themes from the third quarter earnings reports (Charles Schwab)
"Four key themes appear to have emerged from third quarter earnings reports: overall global growth is solid and improving, the growth trajectory in China is mixed, there are no signs of a turnaround in industrial manufacturing, and wage inflation is emerging in some labor intensive industries," writes Jeffrey Kleintop.
Overall, this suggests that "while some things haven't changed, like the weakness in manufacturing and mixed growth in China, the overall global economy seems to be solid to improving with signs of wage inflation in some industries paving the way for global markets to welcome interest rate hikes by central banks in the United States and United Kingdom in 2016," he added.
Japan stumbled, but there are bright spots ahead (Advisor Perspectives)
Japan's third quarter results "took a step back" and were mostly disappointing, writes Burt White of LPL Financial. But the good news its, it has limited energy exposure as the country is an importer, rather than producer.
"Although economic growth has been choppy and earnings have fallen short of expectations during the third quarter, we continue to see brightening prospects for Japanese earnings and Japanese stocks over the rest of 2015 and into 2016," writes White. "We have been encouraged by recent progress in Japan. Monetary policy stimulus - with more likely on the way - is supportive of the Japanese stock market. A weaker yen currency should help Japanese exporters, which are a bigger driver of the Japanese economy and a bigger component of its stock market than in the U.S. And low fuel prices are especially helpful for corporate Japan."
A Texas insurance agent cheated some elderly clients out of $4.6 million (Financial Advisor Magazine)
A Texas insurance agent, Bobby M. Collins, was charged with cheating elderly clients out of $4.6 million of their retirement money. He has agreed to pay $733,000 to settle the charges.
"Collins convinced at least 36 investors to buy high-yield, unsecured notes through his unincorporated retirement planning business BMC Retirement Planning," reports Karen Demasters. He then "used the money for mortgage and luxury car payments, and to make principal and interest payments to earlier investors."