One of the more difficult lessons we learn as financial advisors is that our clients tend to forget the level of anxiety, and in some cases, absolute terror, that accompany bear markets. This bout of forgetfulness typically accompanies bull markets, or in the recent case, very long bull markets. Those advisors who guided clients through…
Sophisticated investors pay attention when someone brings up the topic of portfolio risk management. Affluent investors are often the most risk averse, perhaps because they have already accumulated enough money during their lifetime to achieve their financial planning objectives. Having reached their accumulation goals, they don’t want to lose their hard-earned gains because the financial…
The conversations we have been having with advisors this year have distinctly changed. During the bull market our conversations were focused on either building a practice or planning for retirement. Now the conversations have shifted towards risk management and preparing clients for the next market downturn. There is growing angst that clients expect advisors to…
Propelled by the authority of Nobel Laureates, their simplicity of execution and the excess returns they produced during the secular bull market of the 1980 and 1990s, passive investment strategies became a cornerstone of the wealth management business. Since the turn of millennium however, they have suffered two important blows: robo-advisors and market volatility. Together…
The current bull market is nearly nine years old and the second longest in history. 2017 was one of the strongest years so far, with some of the lowest volatility in history. This type of behavior is more indicative of a speculative blow-off before a bear market than the start of a new bull market…
All good things must come to an end and so it appears has this bull market. Our research has been signaling caution for more than a year and the trend has finally broken. As we enter 2016, equity markets across the globe are down ~12% and if history is any guide, we can expect the…
Are You Prepared to Tell Your Clients about the Losses You Will Cause? Past is prologue. There is a 100% probability that this bull cycle will be followed by a bear cycle. And like so many cycles before, advisors and investors are taking more risk in these final innings of the cycle instead of becoming…
So far in this series about Pinnacle’s Decision to pursue a more risk-managed investment program, we addressed the following: (1) that following the tech crash, we realized that an investment program like Strategic Asset Allocation that guarantees a loss in bear markets is not ideal for either our clients or our business; (2) that according…
Pinnacle Advisory Group grew up on Strategic Asset Allocation and practiced it successfully for the first ten of its twenty years in business. And why not? We all grew up on Strategic Asset Allocation. During the 1980s and 1990s, we enjoyed the endorsement of Nobel Laureates and rode the back of the secular bull market…
This is the season to impress. Money managers will try to sound smart by predicting what the year ahead has in store for investors. Inevitably they will get some things right and some things wrong – a fact that underlies the need for daily diligence. Indeed, successful money managers are often only modestly more right…