Index returns in November 2013 continued the pervasive trend of this calendar year: U.S. equity outpaced the other major markets. Now might be a good time to remind clients about how in the long-run, diversification can be a healthy antidote to the natural human tendency to want more of a well-performing asset class.
As the end of the year approaches, it would be wise to begin resetting performance expectations and to consider the power of mean reversion. It is unlikely that asset class performance will continue to fall outside of the normal range. Every year, advisors and their investors should plan for the most likely scenario and build a plan around it.
Russell recently announced an upcoming reallocation of many of our strategic investment portfolios. These changes can be summarized as reallocating assets away from core U.S. fixed income to potentially higher returning (and more risky) assets such as equities and high yield bonds.
Whether advisors are looking to sell their firm or grow their business through a strategic acquisition, having a solid understanding of the drivers of valuation is critical. In our view, the common “2x last year’s revenue” approach is overly simplistic and risks disappointing both the potential buyer and the seller. We’ve identified three drivers of enterprise value to focus on instead.
The investment menu of a defined contribution plan can be one of the most important decisions impacting Americans’ retirement readiness. However, the breadth of fixed income offerings is generally limited to domestic funds – potentially exposing plan participants to benchmark and manager concentration risks.
Since the Global Financial Crisis, defensive equity investing has garnered attention from many investors as a way to potentially lower risk without necessarily sacrificing equity returns. But not all defensive strategies are created equal.
Two important points often get lost in discussions about leadership reversals between U.S. equity, Non-U.S. equity and Emerging Markets. #1: the opportunity set for diversified investors has changed materially over the last forty-some years. #2: Although it may be possible to make the right leadership call every now and again, the impact on the overall portfolio of making the wrong call can be damaging, potentially wiping out gains from prior correct calls.