So far, 2016 has been characterized by market volatility, with the S&P 500 having 15 days of rising or falling by 1 percent or more on a closing basis, according to S&P Capital IQ. But if history is any indication, the Lunar New Year (the Year of the Monkey), starting Feb. 8, could be a good one for markets. Since 1945, the S&P 500 rose every time the monkey year came around, for an average 7.8 percent, according to Sam Stovall, U.S. equity strategist for S&P Capital IQ. Of course, dart-throwing monkeys can often beat market averages, so maybe the theory holds some truth?
Bloomberg View columnist Barry Ritholtz, CEO of Ritholtz Wealth Management and a lawyer by education, takes a close look at the whistleblower lawsuit against Vanguard and “scoffs.” The suit, filed by a former Vanguard employee who stands to earn 30 percent of the penalty, should there ever be one, accuses Vanguard of ducking some taxes via its unusual, but SEC-approved, corporate structure: The firm is owned by the shareholders of its individual funds. That was meant to keep the management and the “customers,” or the funds’ investors, on the same side of the table and incentive both to keep management fees low; not, as the whistleblower accuses, a means to avoid federal taxes.
Advisors who have portfolio discussions with clients using "tactical" and "secular" lenses may not be doing enough. Portfolio management continues to be a top concern for advisors, according to Fidelity Advisor Investment Pulse study, which surveyed 250 advisors during the fourth quarter. But while advisors acknowledge it’s important to use multiple time horizons when constructing a portfolio, they don’t always do so, says Scott E. Couto, head of distribution for Fidelity Institutional Asset Management. This oversight can contribute to the myth of there being one optimal portfolio. Couto recommends advisors should look through both the tactical lens (one to 12-month time frame) and a secular lens (10 to 30-year time frame), as well as a cyclical lens (one to 10 years) that's focused around business cycles.
Tampa, Fla.-based Independent Financial Partners has opened its first west coast office in Phoenix, Ariz., according to the Phoenix Business Journal. The firm, which already has advisors in Arizona, California, Oregon and other western states, "wanted to be in the western time zone," according to IFP Executive Vice President Chris Hamm. “There is a lot of synergy between Tampa and Phoenix,” he said. “We feel the two markets are similar in their demographics and style of doing business.” He added that the office will be staffed with six IFP employees to provide back-office and technology services to its advisors already based there. IFP's future expansion plans include offices in the Midwest and Northeast.