After falling precipitously in the first quarter, the S&P 500 Index added 20% during the second, making for the best quarter since 1998 and the best second quarter since 1938. What comes next is anyone’s guess.
It is common to hear that private equity (PE) has been the best performing asset class in recent years for institutional investors, but a new academic analysis challenges that idea.
Endowments and foundations broadly embrace tactical approaches to asset allocation, though some clearly do it better than others, often by relying on outside expertise.
Easing the impact on savings rates was the fact that personal consumption expenditures were down by 7.5% during the month of March, according to the Bureau of Economic Analysis.
Data from leading retirement plan recordkeepers shows 401(k) and IRA accounts have seen smaller losses than many broad market indices, thanks in no small part to the efforts of plan sponsors and their advisers. Corporate pensions have also fared better than their public counterparts.
Despite periods of volatility in the past decade, retirement plan investors have benefitted from a strong equity market and their commitment to investing in tax-qualified vehicles.
“Stocks are trading at a very high price-to earnings ratio, and we don’t see that as sustainable,” says Jon Barry, senior retirement strategist at MFS.
“We think 2020 will be another year of slow growth—durable enough to avoid recession but disappointing to those looking for improvement,” says Bob Browne at Northern Trust.
Are earnings estimates too high? Is the trade progress substance or show? How long can a recession be avoided? What might the election mean for the economy?
According to the firm, “Sensible Fees” funds will enable investors to pay a low index or ETF-like base fee—only seeing a higher active management fee when fund performance objectives exceed the benchmark.
Investors must rethink “safe havens” in their portfolio now that bonds simply can’t offer the same combination of portfolio protection and positive income.
The vast majority of today’s retirees still draw the lion’s share of their income from Social Security and pensions; however, in coming years the balance will very quickly tip to private savings sources such as 401(k) plans.
Managed accounts, target-date funds, hybrid funds and risk-based models are all prevalent in today’s defined contribution retirement plan marketplace.
Brexit uncertainty. An inverted yield curve. A burgeoning trade dispute between the U.S. and China. Slowing global growth and shifting currency valuations. Is it all enough to spark a recession?
“We just had an asset-allocation meeting and we spent probably half of it talking about global trade tensions and the China-U.S. relationship,” says Bob Brown, CIO at Northern Trust. “This is a big deal for the markets. The two largest economies in the world have changed the nature of their relationship.”
Advisers are used to addressing their clients’ behavioral biases when it comes to market risks and returns, but a new white paper suggests they need to do more to understand and overcome their own mistakes.