BURTON MALKIEL: The Most Important Thing Investors Can Do To Set Their Portfolio Right (Reuters)
Princeton's Burton Malkiel along with Charles Ellis, founder of Greenwich Associates, and Jay Vivian, former managing director of IBM's Retirement Funds, now serve on the investment advisory board at Rebalance IRA. Beth Pinsker at Reuters asked what investors could do to "set their portfolios right."
"People should control the things that can be controlled," Malkiel said. "You can't control the market, but you can control the costs. Rebalancing can add to your long run return. And finally, save, save, save."
He separately noted that investors should look at fees and their cost to investors since they also "compound over time. The fact is, looking at what you've got left after 30 years, the difference between making 7 percent or making 5 percent after fees is that you've lost 50 percent of your growth to fees. This is not a little deal - this is a big deal," he said.
Merrill Lynch Appoints Director Of Gerontology To Help Advisors Address Aging (FA Mag)
Gerontology refers to the study of the social and biological aspects of aging. And with the coming generational shift of clients and a large number of baby boomers entering retirement, Bank of America Merrill Lynch, has brought Cyndi Hutchins on board, as Director of Gerontology for Merrill Lynch. Hutchins has been an advisor at Merrill Lynch for 15 years and recently went back to school for a masters in Gerontology. "Adding value to client relationships today means having meaningful discussions about longevity, how to smoothly transition into retirement, what it means to go from being a son or daughter to being a caregiver, and how to plan for the unexpected," she told FA Mag.
Financial Advisor Now 41st Best Job In 2014 (Investment News)
An annual list of the 100 best jobs ranked by the U.S. News and World Report showed that the job of 'financial advisor' had fallen to 41 in 2014 from 32 last year and from 23 in 2012. In terms of the best 'business' jobs for the year, financial advisor came in fourth. Jada Graves at U.S. News told Liz Skinner at Investment News that the tumble in the broader list could be attributed to the additional jobs added to the list this year. Their feature placed the median annual salary for financial advisers as $67,520.
Jim Chanos Has A New Strategy For Shorting Stocks (The Wall Street Journal)
Jim Chanos, president of Kynikos Associates, told the Wall Street Journal's Dennis K. Berman that he has a new strategy for shorting stocks. This strategy focuses on companies that make large stock buybacks, as this could actually be a sign of weakness. "Corporate CEOs, with their massive share-buyback programs are in effect investing in the stock market rather than in expanding business opportunities at their companies. Either they expect higher returns from the market, or lower returns in their business, or some combination of both. Given their questionable track record in timing the market, this may be a cause for concern," Chanos told the Journal.
Here Are 4 Key Reasons Why Corporate Profits Will Accelerate In 2014 (Goldman Sachs)
After a 30% return on the S&P 500 in 2013, many expect the stock market to correct or post moderate gains this year. This is partly because they expect record profit margins to reverse. But Goldman Sachs' Jan Hatzius doesn't believe that profits will tumble in 2014. "Eventually, the pendulum will swing back in the direction of lower profits, but probably not until the labor market has recovered sufficiently to push up hourly wage growth up to 4% or more."
In fact, Hatzius points out four key reasons that profits will pick up in 2014. 1. There will be a significant rise in U.S. GDP and productivity growth which should provide corporate profits with a boost. 2. Better economic growth outside the U.S. 3. Inflation will pick up moderately. 4. A modest increase in wages.