BLACKROCK: It's Too Soon For Investors To Restructure Their Portfolios Around Inflation

It's Too Soon For Investors To Restructure Their Portfolios Around Rising Inflation (BlackRock Blog)

The recent uptick in inflation has some investors wondering if they need to prepare for rising prices. But Russ Koesterich at BlackRock writes that "it's probably too early to restructure a portfolio around a big shift in the inflation outlook." Koesterich points out four key things for investors keep in mind.

1. "Consumer inflation is still historically low: …Both the CPI and producer price index (PPI) have only reverted back to their three-year average."
2. "Other measures of inflation look more benign: Core PPI is at 1.8%, its post-recession average. More importantly, the core personal consumption expenditure (core PCE), the Fed's preferred measure of inflation, is at 1.5%, still well below the Fed's target of 2%."
3. "Inflation expectations remain stable: Both the University of Michigan's 1- and 5-year measures of inflation expectations are at, or below, the middle of their respective 3-year range. Ten-year inflation expectations from the Treasury Inflation-Protected Securities (TIPS) market remain stable at roughly 2.25%."
4. "Wage inflation remains subdued: …While most measures of wages have accelerated from last year's lows, they remain subdued. Hourly wages are rising at 2% year-over-year, consistent with the subdued pace we've witnessed since the recession ended. A more complete measure of wages - the Employment Cost Index (ECI) - is growing at 1.8% year-over-year, right in the middle of its post-recession range."

Fewer Women Are Using Financial Advisors (FA Mag)

Only 31% of women in the U.S. use a financial professional, compared to 48% in 2008, according to a Prudential study of 1,407 American women and 606 American men, reports Juliette Fairley at FA Mag. "It's the time factor, that women don't have time, and also the fear factor of addressing one's reality," Marcia Beckford, financial advisor and agency recruiter with Prudential was quoted saying by Fairley. "We're finding that approaching women in a group setting and workshops where they are talking and asking questions among friends or colleagues is one situation in which women are more open to hiring a financial professional."

This Is What Advisors Think Could Boost Productivity (Financial Planning Association)

The 2014 FPA Time Management and Productivity Study asked advisors what they thought could have the most positive impact on their personal productivity. 51% said "more clearly defined processes and systems" would help improve productivity, and 47% said "better planning/scheduling of activities" would.

FPA

Speaking at the CNBC Delivering Alpha conference, hedge fund manager Stanley Druckenmiller, founder of Duquesne Capital Management, said the Federal Reserve's policy is as "baffling" as he's ever seen. Druckenmiller said current Fed policy "makes no sense from a risk/reward perspective" and that it will "end badly."

"I made a living analyzing the future, not the past. The Fed's monetary experiment will be more disruptive down the road than anticipated," Druckenmiller said. "…Every ounce of intuition in my body is that the potential costs have crossed the potential benefits in Fed policies. I don't know what's in the Fed's forecasting record that allows them to make such a bet."

Private Bank's RIA Acquisition Creates Wealth Management Giant (InvestmentNews)

Boston Private Bank & Trust Co is buying registered investment advisor (RIA) Banyan Partners for $60 million. Banyan has $4.3 billion in assets under management (AUM) and the acquisition is expected to double Boston Private's AUM, report Bruce Kelly and Mason Braswell at InvestmentNews. "The acquisition is definitely a game changer for them," Dan Seivert, founder of Echelon Partners told InvestmentNews. "It becomes very different when you pick up a company with Banyan's scale that has a developed management team, and they're also picking up a new leader for their wealth management group."