ETFs Are More Tax-Efficient Than Mutual Funds. Here’s Why.

From: www.thinkadvisor.com

Outflows tend to hurt open-end mutual funds’ tax efficiency, while ETFs tend to be resilient.

Not surprising to any advisor, a key advantage of using ETFs versus mutual funds is the former’s tax efficiency. However, a new Morningstar study explores the sources of ETFs’ tax efficiency verses index mutual funds, and found that ETFs tend to be more tax-efficient…

Common factors affecting retirement income

From: Key Private Bank

When it comes to planning for your retirement income, it’s easy to overlook some of the common factors that
can affect how much you’ll have available to spend. If you don’t consider how your retirement income can be
impacted by investment risk, infl ation risk, catastrophic illness or long-term care, and taxes, you may not be able to enjoy the retirement you envision.

Investment risk

Different types of investments…

Don’t Bother Trying to Pick Stocks

From: us.dimensional.com

New Dimensional research shows that managers usually fall short when they try to outguess market prices. That’s good news for investors.

If markets do a good job of pricing securities, you should expect managers who focus on finding pricing “mistakes” to struggle. Dimensional’s Mutual Fund Landscape 2019 study confirms this principle, showing that most fund managers underperform their benchmarks.1 The results suggest that…

Have you heard these 5 money myths?

From: REAP, LLC. | Retirement & Estate Advisors & Professionals

Has anyone ever made an unfair assumption about your money habits? Was that assumption based on how old you are?

People often look for patterns and trends when it comes to spending and saving, but in reality, your financial approach probably isn’t based on age or decade alone.

What do you think? Do these common beliefs hold true,…

Put Catch-Up Contributions to Work

From: REAP, LLC. | Retirement & Estate Advisors & Professionals

Say you’ve reached your 50s or 60s and wish you’d saved more for retirement. Those work-free years that were once a distant fantasy have almost arrived, and while you’re looking forward to them, you’re also feeling a little nervous.

Why? Well, you don’t want to rely too heavily on Social Security, which probably won’t pay enough for a comfortable…

The Importance of Financial Defense

From: Sound Income Strategies, LLC

The great Alabama coach “Bear” Bryant once said, “Defense wins championships,” and you can bet that almost every great coach in nearly every sport has shared that same philosophy. Just think about some of the great sports dynasties, teams that won championships year after year: the Green Bay Packers under Vince Lombardi, the Boston Celtics under “Red” Auerbach, the Yankees…

The Crisis in Retirement Planning

By Robert C. Merton | Harvard Business Review

Corporate America really started to take notice of pensions in the wake of the dot-com crash, in 2000. Interest rates and stock prices both plummeted, which meant that the value of pension liabilities rose while the value of the assets held to meet them fell. A number of major firms in weak industries, notably steel and airlines, went bankrupt in large…

Pursuing a Better Investment Experience

From: Secure Investment Management

Key Principles to Improve Your Odds of Success

1. Embrace Market Pricing

The market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers—and the real-time information they bring helps set prices.

2. Don’t Try to Outguess the Market

The market’s pricing power works against mutual fund managers who try to outperform through stock picking or market timing….

Retirement Planning: Solving for the Major Risks in Retirement

Whitepaper from REAP Strategist, Horizon Investments

ABSTRACT

Generating income throughout retirement is increasingly the focus of financial advisors and institutions. The shift in focus is due to an aging population and a three-decade-long bull market for bonds that is expected to end. This paper examines different potential asset allocation strategies in the context of retirement spending. Specifically, we want to understand how longevity risk (outliving…

Maximum Drawdown: A New Approach to Managing Investment Risk

Whitepaper from REAP Strategist, Horizon Investments

Ever since Modern Portfolio Theory (MPT) was introduced in 1952, the answer to the question of how investment risk should be measured and managed has largely been codified as volatility or standard deviation. MPT is a framework that, in theory, allows an investor to maximize return for a given level of risk, defined in the MPT framework as…