WrapManager's Wealth Management Blog

U.S. STOCKS: SMALL- AND MID-CAPS’ HOME-COURT ADVANTAGE For those concerned about developments overseas, U.S. small- and mid-cap stocks, which are positioned to benefit from strength in domestic consumer spending, may be worth considering. Bracing for “Brexit”? Challenged by China? You’re not alone. A scan of recent headlines underscores the challenges in the global investment landscape. The United Kingdom is facing a fractious vote (June 23) on whether to leave the European Union. China is grappling with a slowing economy. The eurozone is hindered by sluggish growth and the prospect of more fiscal drama with Greece. Japan is trying to jump-start its moribund economy and counter deflation. The list goes on. [+] Read More

Planning for a multi-decade retirement requires planning and tax planning should be one of your major considerations. Wise retirement investors create a plan that will provide adequate income year after year, but if you don’t take taxes into consideration, your income may be significantly reduced over the long run. [+] Read More

Federated Investor's Chief Investment Officer, Equities, Stephen F Auth, CFA, oversees all of Federated's equity and asset allocation products globally. Below you'll find an excerpt from the week of May, 24 2016. If you're interested in reading the full report, download it here. [+] Read More

On Wednesday, April 6, the U.S. Department of Labor finalized what they’re calling the “rule to address conflicts of interest in retirement advice.” Many advisors have been concerned about what the rules would actually entail, and how it might affect their business models. According to a survey of 485 financial advisors conducted by Fidelity, 73% are concerned the rule will have a negative impact on the way they do business. In short, the rule states that any advisor/broker that handles retirement accounts must adhere to the fiduciary standard (to note: WrapManager already adheres to the fiduciary standard, so we do not anticipate any significant changes to how we operate). That means that no matter what the product involved—stocks, annuities, mutual funds, separately managed accounts, or commission products—the advisor must by law put the client’s best interests ahead of their own. Before the law, certain brokers and types of advisors could recommend a product as long as it was “suitable” for their clients. [+] Read More

In brief: Following the 2015 decline, S&P 500 earnings per share (EPS) fell -6.7% in the first quarter.1 Companies beat earnings estimates but missed revenue estimates. We maintain our view that the headwinds weighing on aggregate earnings— energy prices and a stronger dollar—will dissipate over the course of 2016, leading to mildly positive earnings growth for the year. However, we are keeping an eye on rising wages, which have the potential to press on earnings and margins just as other headwinds subside. When it comes to choosing the best metric for evaluating earnings, we prefer operating earnings, as they offer the cleanest view into a company’s day-today business. If the gradual earnings recovery that we anticipate occurs during the second half of 2016, we see some upside for U.S. equities. [+] Read More

Saving for your own retirement could be called a socially responsible, self-sustaining endeavor. By planning for your own future, you put yourself in a position to help others instead of depending on others. But many people find that they want to take their generosity to another level with Socially Responsible Investing (SRI).1 Socially Responsible Investing is a strategy used by investors who are looking to promote ideals and values they feel strongly about. For example, an investor who feels strongly about education reform might invest in Microsoft but avoid Berkshire Hathaway. That’s because the Gates Foundation2 actively supports education reform and Buffett’s Sherwood Foundation3 actively opposes education reform. Whatever your personal ideals, you can find ways to invest that will promote those concepts. According to Forbes, SRI increased more than 76% to $6.57 trillion in managed assets during the period between 2012 and 2014.4 If you’d like to put your money where your heart is, you can participate in Socially Responsible Investing in the following ways: [+] Read More

Quizmaster, Doug Hutchinson, has come up with another great quiz. This time he discusses creating a meaningful and balanced diversification strategy. Good luck! Consider this scenario: Your friend Ben has been saving money and he has $10,000 that he would like to invest. Ben owns 47 different mutual funds and he is considering investing his $10,000 in a 48th mutual fund. "My goal is to be diversified," Ben tells you. "You can never have too much of a good thing so adding the 48th mutual fund to my portfolio will get me evenmore diversified. The more holdings I have, the greater the diversification benefit that I'll receive." Is it reasonable to expect that Ben will get a meaningful diversification benefit by adding a 48th mutual fund to his portfolio? [+] Read More

The market endured a bumpy start to the year, but it also displayed strong resilience over the last few weeks to rally back into positive territory. Investors should use this experience to remember an important lesson: even when market volatility seems pronounced and temptations run high to shift away from stocks, the market can also overcome the short-term headwinds and recover quickly. The first three months of the year offer us a case and point: Figure 1. S&P 500 Year-to-Date (the lapses in the graph are trading holidays) [+] Read More

Here’s a statistic that may catch your eye (or make it shed a tear): since 1980, total mutual fund assets have increased by 135 times, but the total expenses paid to equity mutual-fund managers has increased 141 times ($170.8 million to $24,143 billion).1 Have your investment fees, or the fees you pay to your financial advisor, been going up as well? 3 Actions You Should Take to Examine Your Investment Fees [+] Read More