Wealthcare Insights


Featured Article

Keeping Your Eye on the Prize

Recent market behavior is more than disconcerting; it is downright scary and can profoundly...

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Featured Article

It’s Not What Clients Earn, It’s What They Keep

It’s no secret that financial advisors use asset allocation to manage a client’s investment...

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Featured Article

Growth Conditions Index (GCONIX) Update

While growth conditions deteriorated over the third quarter, they remain favorable. Our Growth...

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Active vs Passive – The Debate That Won’t Quit

The “tastes great, less filling” debate rages on between active and passive investing advocates, as noted in this US News & World Report article. We have thoughts on the subject, which we’ll share in a future, more detailed piece.

For now, our immediate view is that there’s one key thing the article gets right. In the last sentence it says that clients should pick a strategy that helps them sleep at night.

It’s the Goals Management Process, Stupid

Most planning software does not effectively help people set financial goals, nor manage them as life unfolds. A couple of reasons why most financial planning software misses the mark is that it frames 1) goals as point estimates and 2) priorities in simple, absolute rank order terms. There is never a single number for each goal, nor a rank absolute set of priorities. In reality, people think of goals in terms of ranges and of priorities relative to progress – meaning your relative priorities change as you progress from acceptable to ideal.

The Disillusionment Narrative

Since the beginning of October, the S&P500 has fallen almost 20%. The fall began with the spike in 10-Year Treasury yields in early October. When 10-Year yields breached technically and psychologically important levels, investors changed the lens with which they look at factors affecting the market.

Inflation 1-2-3-4

There are many measures of inflation. This Spotlight focuses on four:

1. The Consumer Price Index (CPI)
2. The Core CPI (excludes the volatile food and energy components)
3. The Personal Consumption Expenditures Price Index (PCE)
4. The Core PCE (excludes the volatile food and energy components)

Treasury Rolldown – Alternative Yield Scenarios and Returns

If yields are the same a year from now as they are today, then at 3.3%, the 7-Year Treasury has the highest expected one-year total return.

Value is in the Eye of the Beholder

Behold the S&P500’s historical price earnings ratio as compared to its long-term average over the last 50 years.
By this measure, across all inflation levels, stocks are expensive.

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