Passive indexing has long been popular among the smaller investors. But wealthy investors often pursue more active strategies, either with active managers or on their own. After all, they didn’t accumulate their wealth by sitting back and doing what everyone else does, right?
But the evidence against active management is strong, with the most managers failing to beat the index over time. So why do wealthy investors tend to shun a passive approach to managing their money?
It’s a foregone conclusion in the markets that the Federal Reserve will raise short term interest rates on Wednesday. But more importantly, investors will be looking for hints for future rate increases.
Why is this so important? The consensus view is for 2-3 Fed increases this year, but anchoring into this expectation comes with risks. For example, in 1994 the Fed surprised investors by increasing rates 6 times, resulting in a 3% loss for bonds that year. Of course, bonds recovered in following years, thanks largely to the long-term trend of falling interest rates since 1981.
For the fourth year in a row Janiczek Wealth Management has been named to Barron’s Top Financial Advisor list*, now for 2017, 2016, 2015 and 2014!
Mr. Janiczek was named one of America’s top financial advisors* in the March 4th, 2017 Barron’s issue. The prestigious list of top investment advisors was also published in The Wall Street Journal by Dow Jones & Company, a division of News Corp on March 9, 2017.
The rankings are based on data provided by over 4,000 of the nation’s most productive advisors. Barron’s draws from all 50 states, plus the District of Columbia. It includes a cross-section of private-wealth advisors—from independents who own and operate their own practices to advisors from the large Wall Street firms. Barron’s states, “This special report lists the top advisors in each state, with the number of ranking spots determined by each state’s population and wealth.
The rankings are based on assets under management, revenues generated by advisors for their firms, and the quality of the advisors’ practices. In evaluating advisors, we examine regulatory records, internal company documents, and 100-plus points of data provided by the advisors themselves.”
Berkshire Hathaway’s Warren Buffett released his annual letter to shareholders last Saturday, a publication that is examined and dissected by investors around the world. And this year’s edition underscores why.
Before its release, the S&P 500 closed at its all-time high (again), continuing its rally that began in November. In fact, in the first 38 trading days of 2016, the S&P 500 has posted a new high 11 times. The Dow Jones Industrial Average and Russell 2000 Index have printed new highs 14 and 3 times in 2016, respectively.
Even the greenest of investors is likely aware that stocks move in both directions, and that periods of upswings have historically been followed by downturns. The Holy Grail, of course, is how to invest through all the ups and downs, and Buffett offers his view:
Now in its 27th year serving high net worth investors (those with investment portfolios of $2 million to $20 million) and ultra-high net worth investors (those with investment portfolios of $20 million+) in Denver, Colorado Springs, Boulder, Aspen, Vail, Beaver Creek, Summit County, Snowmass areas of Colorado and in approximately 24 other States in U.S.A., we are proud our Evidence Based Investing (EBI) and patented Strength Based Wealth Management® (SBWM) system and services helps to “unleash” our clients from the complexities of wealth so they can flourish with their good fortune.
Legacy planning goes beyond mere numbers, aligning traditional estate planning with a family’s goals and values. The process includes defining and expressing what wealth means to a family. It involves identifying the core values that bind the family, and in many cases it involves grooming children and grandchildren to be guardians of not just wealth, but also those values.
The financial markets are now closed for the year and with all of the theatrics the verdict is in. Those investors with the following five characteristics prevail over those who fall victim to a host of mistakes and unsuccessful approaches:
- Investing from a superior position of financial strength.
- Being well prepared for a range of possible outcomes.
- Having an investment philosophy and approach you can confidently stick with and win with through thick and thin.
- Tuning out the noise, taming the emotion and focusing on what you can control.
- Investing for long-term success and, in the process, avoiding anxiety-toxic predictions, moves, comparisons, concentrations and traps.
Nearly eight weeks after his election, emotions about President-elect Donald Trump continue to run high.
There’s no doubt that Trump was a divisive candidate, and he is already saying and doing things that have pleased some and discouraged others. But as investors contemplate the next four years under this president, they should pay attention to facts and numbers and be on guard against emotional decision-making.
It’s common for investors to overestimate the impact that Presidential election results have on investment markets. Prior to the election, many commentators predicted a market crash in the event of a Donald Trump victory. That didn’t happen, of course; to the contrary, the market has risen. That’s an example of the strength and adaptability of the markets: They have a long history of digesting jarring and unforeseen events, and then moving forward.
It’s not happiness that brings us gratitude; it’s gratitude that brings us happiness.
At this special time of the year, we at Janiczek Wealth Managements seek to express the profound sense of gratitude we feel for the many blessings we have received. This year many team members have spent their free time volunteering in the community and organizations that are close to their heart.
Matt Gray spent 2016 teaching a Personal Finance course at East High School through Junior Achievement. Wrapping up the year, Junior Achievement hosted Finance Park; a day-long activity in which middle schoolers learn how to build budgets and manage a career in real-life scenarios. Matt enjoyed spending the day with the children teaching them the importance of budgeting.
Pam Dorn has spent the year mentoring a group of young athletes from ages 5-16. She works with them on goal setting and affirmations. In the last year she has been amazed by the goals that the children have set. Pam worked with a five year old on long terms goals. A five year old mapped out how she wanted to be a Disney princess; brave, kind, smart, humble, pretty and loving. The passion that the young kids have hold a special place in Pam’s heart.
The challenge of performance measurement
Periodic reviews of an investor’s portfolio helps ascertain whether the investment process is working, but more importantly, whether it’s on the right course for the individual investor.
The Beardstown Ladies was a 12-woman investment club that gathered monthly and managed their own stock portfolio. They became celebrities in the mid-1990s when news of their track record went viral: since their 1983 inception, The Beardstown Ladies claimed their portfolio had returned 23.4% versus the S&P 500’s 14.9% return. But in 1998, an audited performance record was released showing the club’s actual returns were actually 9.1% per year.