Federated Investor's Q3 international strategic value dividend account commentary reivews the affect of August volatility and the ability of their strategy to provide a substantially higher-than-market yield and long-term dividend growth. "Market Overview" Equity markets pulled off their August low but were still down on the month, closing out their worst quarter in four years as investor fears over China, lower oil and a potential global slowdown outweighed generally better economic data at home.The Federal Reserve added to the uncertainty and volatility, choosing to put off liftoff at its September meeting, rattling the markets even though futures had put the odds of a move at well below even. [+] Read More

Quizmaster Doug Hutchinson has come up with another great quiz that explores the effect of harvesting losses. Let’s see what the math has to say. Good luck! First, a definition of tax loss harvesting. Tax Loss Harvesting is the practice of selling a security that has experienced a loss. By realizing, or "harvesting" a loss, investors are able to offset taxes on gains. The sold security may be held in cash or replaced by a similar one (keeping in mind wash sale rules), to help maintain the optimal asset allocation. [+] Read More

The last few years have been fairly “steady as she goes” for the U.S. stock market—the bull market had gone over 1,400 calendar days without a 10% correction, which marked the third longest such streak in half a century.1 But that changed very quickly from August 18 – 25, when the market fell over 11% in just six trading days.2 The steepness of the drop and its rapid onset left many investors concerned, perhaps even wondering if this was the beginning of another prolonged downturn like 2008. If you’re considering making changes to your portfolio out of concern over the volatility, or for one of the four reasons below, we’d encourage you to take a moment to gain some perspective before making a big change. If your long-term goals have not changed, but you are considering making significant changes to your asset allocation, there is a chance emotion may be getting in the way. [+] Read More

We recently wrote a post addressing volatility in China – in just one months’ time (mid-June to mid-July), the market there lost one third of its value.1 The wild swing in Chinese equities did not necessarily send shock waves through the global markets (which remain slightly positive on the year), but it did effectively raise eyebrows amongst investors curious if the downside volatility could be contagious. They might have a point. If you consider the ongoing Greece sovereign debt crisis, the persistent geopolitical threat posed by ISIS, concern over slowing growth rates in China, and the relative calm in the domestic equities markets (S&P 500) over the last few years, it feels like there could be an opening for increased volatility. Taking a look at the chart below, you can see that from 2012 – 2014, the market has had very few 5+% pullbacks, which draws a sharp contrast to the previous three years and to history in general. Indeed, moderate pullbacks happen frequently even in normal times. [+] Read More

Quizmaster, Doug Hutchinson, has come up with a great quiz that illustrates how adding an asset with higher volatility can actually lower overall volatility of a portfolio. Let’s see what the math has to say. Good luck! Consider this scenario: Your friend Mary has a portfolio consisting of one asset, Asset A. She is considering adding a second asset to the portfolio and her new portfolio would be weighted as 50% Asset A and 50% of the new asset. She would like the new two asset portfolio to have the lowest risk (as measured by standard deviation) possible, given the other options that she is considering adding to her portfolio: Asset B and Asset C. [+] Read More

With much fanfare and a great deal of press, legendary bond investor Bill Gross shockingly announced his resignation from PIMCO on September 26, after 43 years with the company. Known as the “Bond King” for his track record managing the $222 billion PIMCO Total Return fund, Gross was leaving the company he helped found in 1971 and that he grew into a $2 trillion behemoth.1 Whatever the reasons behind his departure, it gives investors good reason to ask an important question: when the portfolio manager leaves a fund, should you remove your investments from the fund? The four considerations outlined below will help answer this important question. [+] Read More

There was once a time when investing in the markets was as simple as choosing how much money to have in stocks, versus bonds, versus cash in the bank. Since that time the investment landscape has evolved and the menu of investment options has grown, giving you several products like hedge funds, annuities, ETFs, mutual funds and private REITs. Unfortunately, many of these investments often lack transparency and come with hidden risks and inconsistent returns. Take care in analyzing these three investments as you work with your financial advisor to plan your investment portfolio and retirement income plan. [+] Read More

U.S. investors are significantly under-allocated to international stocks, according to JP Morgan Asset Management. They found that even though 50% of the world’s equity market capitalization is found outside the US, investors have less than a third of their portfolios allocated abroad.1 This imbalance represents a significant disconnect between where the world’s growth is generated today versus where investor portfolios are allocated, and is especially magnified as investment prospects outside the US continue to improve.1 To address this investment issue, you should review your retirement plan’s international exposure with your financial advisor. Is your investment portfolio positioned for whatever growth opportunities may lie ahead in the international markets? [+] Read More

The stock market overcame some volatility early in the year but continued to trend higher. As the market has reached new all-time highs, many investors are wondering if it’s too late to put additional cash to work. Others have indicated they’re still waiting for a possible stock market correction before making any decisions. One thing remains clear – despite what happens in the market and when, it’s likely you still need your portfolio growing and generating retirement income over time. There are two types of portfolio strategies that could ease concerns about where the market’s headed while positioning your portfolio for a variety of outcomes. Tactical Strategies are designed to temper the effects of a market decline while trying to capture growth, and Dividend Income Strategies aim to generate income while reducing volatility. Let’s take a look at both. [+] Read More