Stocks Have A Long History Of Rallying After Midterm Elections
Oct 14, 2014, 00:39 IST
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Midterm Elections Have Investors Rattled, But There's Good News Right Around The Corner (Charles Schwab)
Investors are a bit unsettled by the uncertainty surrounding midterm elections, but there's good news coming up, writes Charles Schwab's Liz Ann Sonders. The election will be over in one month, "meaning that political ads will stop; and attention can be turned to the coming year of potential action on such things as corporate tax rate reform."
Generally, the year after midterm elections tends to be positive, and S&P500 typically have posted positive returns for 12 months following. This has been the case every single time since 1950.
There Are Several Ways To Get Your Potential Clients To Trust You (Financial Planning)
The most important factor in building trust is consistency. "You don't have to be the Ritz-Carlton, but your service has to be consistent," says Rothberg, a senior VP for advisor education. She recommends "instituting a 24-hour callback policy for client requests, and 48-hour follow-through - progress reports every two days until any request is completed."
Additionally, it's important to be personally involved and know the client's connections. Research shows that advisors who could name the clients' family dogs had twice as many assets under management.
And there's one small trick that advisors need to know for when they host events for clients and prospects. Advisors should seat their prospects next to the clients who are their "biggest fans."
Investors Should Avoid Certain Times Of Day When Trading In ETFs (Vanguard)
Investors should avoid certain times of the day when trading ETFs, according to Vanguard's Rowley. Market makers price the ETFs off of the value of the underlying securities, and typically at the open or the close of the market the bid-ask prices are "a little unsettled," he says.
"For example, you could have market news before the market opens. And as those stocks start their trading for the day, market makers are unsure how the market might react to that news. So the underlying securities might have a bit wider, more volatile bid-ask spreads. Well, as the market starts to digest that news and those bid-ask spreads start to tighten, ETF market makers will see that as an ability to tighten their spreads as well," he says.
Investors Should Broaden Their Horizons With A Multi-Sector Mind-Set To Stay Out Of The Bond Liquidity Trap (AllianceBernstein)
Investors should broaden their horizons with a multi-sector mind-set because liquidity "is episodic and can affect different sectors in different ways," writes Douglas Peebles.
"...segregating one's allocations into single-sector funds - high yield, emerging markets and so on - can be dangerous; if liquidity dries up in one sector, investors can quickly find themselves trapped," he says.
According to Peebles, "a holistic and dynamic multi-sector approach that lets investors tap into a broad universe of fixed-income assets offers better protection should liquidity in a specific sector dry out."
Waiting To Claim Social Security Is The Smartest Decision (Investment News)
People should wait to claim their social security benefits. The earliest age at which a person can claim benefits is 62, but those who wait until 70 "can raise lifetime monthly benefits by 76%," writes Franklin. Nevertheless, only 5% of retirees wait until 67 or later to claim benefits.
"Following a good Social Security strategy for one year is 10 times more valuable than investing a $200,000 portfolio with a manager who generates 100 basis points in alpha (extra return)," according to David Laster and Anil Suri at Merrill Lynch Wealth Management.
"Since the life expectancy for a 62-year-old male is 81 years, the break-even approach suggests it pays for a man with average life expectancy to delay claiming until at least age 66... And since the average life expectancy of a 62-year-old female is 84 years, it makes even more sense for a woman to wait before claiming," they add.