Week ending December 14th, 2018

Happy Friday, readers! Experienced advisers will likely agree that helping clients accept equity market volatility is one of their biggest challenges. Simply put, most advisers have learned how to cope with and understand the role of volatility, but their clients have not. The disparity between adviser and client perspectives highlights the importance of open, frequent communication—and of establishing and following a carefully constructed investment plan.

Dealing With Volatility

Managers’ Long-Term Outlook Gives Context for Current Volatility

Despite slowing global growth, disparate inflation rates, and continued normalization of U.S. monetary policy, economists with Vanguard and J.P. Morgan Asset Management believe that a near-term recession will be avoided. Read more >

J.P. Morgan Offers 2019 to 2029 Capital Market Assumptions

If they do not embrace immigration in a big way, developed economies are likely to run into labor shortages that will curtail their growth potential; emerging markets will likely benefit from demographic trends. Read more >

Active Management Insights from Putnam CEO Bob Reynolds

As the firm launches a new initiative to educate investors about active management opportunities, Putnam CEO Bob Reynolds says he is optimistic that an improved retirement landscape will take shape in 2019. Read more >

Stock Market Volatility Brings Predictable 401(k) Trading Spike

Preliminary data shared by Alight Solutions shows the firm’s 401(k) trading index spiked on Monday October 29; investors making moves shunned growth assets and paid premium prices for fixed income. Read more >

Strategic Perspective Is a Key Commodity During Bouts of Volatility

As recently as mid-2016 it was common to hear advisers describe significant market volatility as the new normal, but since then the global equity markets have been remarkably stable and generous; so it makes some sense, experts agree, that investors are feeling jittery as volatility returns to the fore. Read more >

MOST POPULAR STORIES

Warn Your Clients: Don’t Abuse Coronavirus Hardship Withdrawals

Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.

Reliance Trust Reaches Deal on 401(k) Excessive Fee, Self-Dealing Suit

Admitting no wrongdoing, Reliance Trust will pay $39.8 million to settle the case.

A New World and New Opportunities for Alpha

Pandemic-driven volatility has once again highlighted the relative virtues of active and passive management.

Nestle Sued Over Fees for Managed Accounts, Recordkeeping

The lawsuit contends that, in most cases, the managed account service added no material value to participants, creating asset allocations 'not materially different than' those of the age appropriate target-date options for participants.

How to Diversify Retirement Plan Committees

With representation being top of mind in 2020, companies are reconsidering the makeup of their workforces and their retirement plan committees.

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