Former SEC Commissioner targets fraudulent brokers looking to sell insurance: According to a study co-authored by Robert Jackson Jr., “wandering advisors” who leave one regulator and continue to work under another are more likely to commit fraud. InvestmentNews..
Onramp Invest debuts RIA crypto asset management: Onramp Invest emerged from beta mode in the rapidly evolving crypto market, which has historically been on the sidelines of financial advisors. InvestmentNews..
Fidelity helps financial advisors change their business models at the Wealth Advisory Institute: Fidelity Investments has launched the Wealth Advisory Institute. This is an education and training program aimed at helping companies and their advisors grow their operations. Financial Advisor IQ..
Why the retirement bill is a bipartisan slam dunk in Congress: He wrote that raising the donation limit to promote savings due to lack of savings seems to be as useful as raising the height of the basketball net and encouraging shorter players to participate. Kelly Pechter..
Inflation surge is a temporary sign: It’s very early to say that inflation has passed, but there are signs that the fastest part of inflation’s recovery may end soon. Jeffrey Crane Top..
Greenhouse gas emissions do not affect profitability or equity returns.: Proponents of ESG investment write that they may be disappointed to find new research showing that greenhouse gas emissions do not have a measurable impact on a company’s profitability or equity performance. Larry Swedrow..
How to eliminate the risk of concentrated stock positions: Unless there is a compelling reason for the investor to maintain a concentrated position, he writes that the position must be liquidated and reinvested in a widely diversified portfolio. Scott McKillop..
New orders for durable consumer goods fell 1.3% in April: According to First Trust Economic blogOrders for durable consumer goods fell in April. This is because supply chain shortages (especially semiconductors) continue to curb activity in some sectors.
Research of interest
What does the betting market tell us about investor preferences and beliefs?Impact on low-risk anomalies
An empirical puzzle in financial markets known as low-risk anomalies is that high-risk assets have lower risk-adjusted returns than low-risk assets. the study.. The theory of this phenomenon focuses on either market friction such as leverage costs or non-traditional preferences for payoffs such as lottery tickets. Researchers have associated low-risk anomalies with favorites in the betting market-long shot bias, where returns to higher-risk “long shots” bets are lower than returns to “favorites” bets, both. Provides new evidence for the anomaly of. Integrate the evidence and study the joint meaning from the two settings for a unified explanation. The rational theory of risk-averse investors with homogeneous beliefs cannot explain the cross-cutting relationship between diversified risks and returns in the betting market. Rather, researchers appeal to models of non-traditional tastes and foreign beliefs. Researchers have found that a model with reference-dependent priorities, with two features: probability weighting and sensitivity reduction, and cumulative prospect theory, is best suited for data and can capture choices and bet amounts. .. The weighting of the probability of capturing the facts of the financial markets and the calibrated parameter values for desensitization can at the same time explain the facts of the betting market. However, explaining betting choices is incompatible with loss avoidance, a feature of cumulative prospect theory often used in financial market applications.
Power of Love: Emotional Support and Financial Difficulties
Researchers using micro data from two complementary US household surveys Document Individuals who lack emotional support from family and friends are more likely to experience financial difficulties. This pattern is quite strong not only for women, but also for women who are prone to anxiety and depression. Further evidence suggests a belief-based channel in which emotional support improves financial readiness for potential harmful shocks. Overall, these findings underscore the importance of the psychological aspects of social networks in shaping household economic outcomes.
Best Strategy for the Inflationary Era
Over the last three decades, there has been no sustained surge in inflation in developed markets. Write a researcher.. As a result, investors face the challenge of having limited experience in guiding portfolio relocations in the face of rising inflation risk and lacking recent data. Researchers provide some insights by analyzing both passive and active strategies across different asset classes in the United States, United Kingdom, and Japan over the last 95 years. Unexpected inflation is bad news for traditional assets such as bonds and stocks, with local inflation having the biggest impact. Commodities show positive returns during inflation spikes, but there is considerable variability within the commodity complex. In a dynamic strategy, researchers have found that trend-following provides the most reliable protection during significant inflationary shocks. The active equity factor strategy also provides some hedging capacity. Researchers also provide an analysis of alternative asset classes such as art and discuss the economic rationale for including cryptocurrencies as part of strategies to protect against inflation.
Advisor usage and retirement plan performance
As defined contribution plans become more common than defined benefit plans, American workers are increasingly responsible for their retirement savings. Building a plan investment menu is very important because the portfolio allocation of retirement plan participants is constrained by the funds available in the plan. No studies have evaluated fund choices for retirement plans or compared plans involving advisors to voluntary plans.To fill the gap in this study, this is Research We use national cross-cutting data, including 5,570 retirement plans with more than 100 participants in 2013, 2014, and 2015. The results show that in most cases the use of advisors has nothing to do with plan performance. Plan sponsors should use objective means to require advisors to regularly assess the performance of managed plans.
Social Security, Inflation and Crypto News for Financial Advisers Source link Social Security, Inflation and Crypto News for Financial Advisers