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…
From: Secure Investment Management
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….
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…
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…
Whitepaper from REAP Strategist, Horizon Investments
EXECUTIVE SUMMARY
As a goals-based investment manager, we believe investment problems and challenges are best addressed in the context of an investor’s goals—the purpose behind their investment programs. By aligning investment solutions with investor goals, investors have a better opportunity to measure the actual “real world” outcomes they seek. Each investment-related goal consists of three stages—accumulation (or the Gain…
From: www.morningstar.com
The Morningstar Active/Passive Barometer is a semiannual report that measures the performance of actively versus passively managed funds within their respective Morningstar Categories. The barometer is unique in the way it measures active managers’ success relative to the actual, net-of-fee performance of passive funds rather than an index, which isn’t investable.
We…
By Ocean Park Asset Management
The Ocean Park Diversified Municipal Bond Model seeks to produce satisfying long-term returns while limiting downside risk. Returns are created from interest income as well as increases in bond prices. The interest income from municipal bonds is tax-exempt at the federal level, providing a valuable benefit for clients in relatively high income tax brackets. The Model diversifies a client’s account directly and indirectly among a…
Go to page: Should you take a goal-based financial approach?From: REAP, LLC. | Retirement & Estate Advisors & Professionals
Have you heard of goal-based investing?
This mindset simply involves saving and investing for a particular purpose. You might also call this a SMART approach: specific, measurable, achievable, relevant and time-bound.
Regardless of your investing activities, reviewing your finances and establishing clear goals (along with a plan to reach them) can be a helpful activity for…
From: www.wsj.com
Investors everywhere think a 5-star rating from Morningstar means a mutual fund will be a top performer—it doesn’t
Millions of people trust Morningstar Inc. to help them decide where to put their money.
From pension funds to endowments to financial advisers to individuals, investors rely on Morningstar’s star ratings to help divide $16 trillion among America’s mutual funds, in much the way shoppers use Amazon’s ratings…
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