“The way you can outperform, the way you can say your company is adding value is through manager selection. And the way we did manager selection is through picking mutual funds. So I think that’s where everybody started, and actually where a lot of the industry remains. But it was after that 2000-2001 bear market,…
“ . . . they’re very low cost. They’re highly liquid. ETFs are transparent, so you always know what’s in them. They’re very tax efficient. And, you know, you kind of get instant diversification, too. So depending on what you buy, there’s a lot of different options of ETFs . . .” – Carl Noble…
Pinnacle’s investment team has been working diligently to reallocate our active portfolios to a neutral position. Here are ten things you need to know about neutral allocation. 1) There is no such thing as “neutral volatility” for the vast majority of investors. Mirroring the benchmark portfolio and rebalancing it to it is considered the best…
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…
The Pinnacle investment team has been working diligently for the past eight weeks to gradually move our managed portfolios to a neutral asset allocation. This leads to the question, what the heck is a “neutral” asset allocation and why should I care? Interestingly, a large percentage of the traditional investment world (by traditional, I mean…
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…
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…