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5 Things To Know About The Current Bond Market (Morningstar)
There are five key things to remember about today's bond market, according to John Rekenthaler at Morningstar. 1. Despite the run-up in interest rates, the 30-year Treasury yield is up to 3.8%, from 2.8% about six months ago, this is still lower than the 5.2% average since 1926. 2. Being long bonds could be dangerous. "Whereas intermediate-length Treasuries almost never shed 10% in total return during a bond-market sell-off, long Treasuries have done so a dozen times." 3. High quality corporate bonds look good as companies are posting big profits and healthy balance sheets and recession worries have faded. 4. When rates rise stocks are flat and don't lose money because investors have already been anticipating the rise and have absorbed some of the losses. Whereas bonds are "outright losers." 5. Bonds still look more expensive than stocks.
There could be five key regulatory changes to watch for in 2014, according to Nancy Lininger, founder of California-based The Consoritum. 1. Fiduciary standard - "All financial advisors should have full disclosure of services, fees, conflicts of interest, and act in the best interest of the client." 2. Bringing various brokerage and advisory services under "one regulatory regime," though Lininger admits this is more her "ideal futuristic shape of the industry." 3. Some states could prohibit arbitration clauses in broker dealer and investment advisor contracts. 4. Regulators could require some sort of business continuity plan (BCP) from investment advisors and broker dealers in the event of unforeseen risks to businesses. 5. While many firms have already implemented the Federal Trade Commission’s (FTC) Red Flags Rule other groups that don't think of themselves as 'financial institutions' or 'creditors' could also come under the scanner.
5 Creative Presents For Clients Around The Holidays (WealthManagement.com)
Megan Leonhardt at WealthManagement.com created a list of creative presents advisors can get their clients over the holidays. Here are five of the ideas. 1. Pies to help ease the pressure off the Thanksgiving feast 2. A trip to the shooting range. 3. Personal presents like a coffee table book on a destination you might visit with a client when considering an investment. 4. A dinner and a show. 5. Clients' children often get an early acceptance into their schools around the holidays and some advisors gift them a sweatshirt or other memorabilia from the school.
Advisors Avoid Bitcoin Even As It Surges (Investment News)
Even as bitcoin crossed the $1,000 mark last Friday, advisors are staying away from the digital currency, reports Megan Durisin at Investment News. "Because it hit that $1,000 mark, [investors] think it's going to go to $2,000, going to go to $5,000," Phil Christenson, portfolio manager at Phillip James Financial told Investment News. "This is probably the time to ignore it. Other advisors admitted that while they aren't ready to jump on the bitcoin band wagon just yet, they will research it if a client broaches them on the subject.
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