Vlog – The markets vs. the mid-terms

Tim Holland, Brinker Capital’s Global Investment Strategist, discusses the upcoming Congressional mid-term elections, specifically what party will win the House and the Senate, and how markets might respond once the votes are counted.

 

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a registered investment advisor.

Investment Insights Podcast: September 2018 market and economic outlook

Leigh Lowman, CFA, Investment Manager

On this week’s podcast (recorded September 7, 2018), Leigh provides a brief review of August markets.

 

Quick hits:

  • Despite what historically is a difficult month for markets, US equities finished in strong positive territory and a new record was set for the longest bull market in history.
  • The S&P 500 Index was up 3.3% for the month and has gained 9.9% year to date.
  • Developed international equities as measured by the MSCI EAFE Index were down -1.9% for the month and -1.9% year to date.
  • Emerging Markets Index was down -2.7% for the month and -6.9% year to date.
  • The Bloomberg Barclays US Aggregate Index was up 0.6% for the month with all sectors posting positive returns.
  • The 10-year Treasury yield declined 12 basis points, ending the month at 2.85%, and led to further flattening of the yield curve.

Listen_Icon  Listen to the abbreviated audio recording.

Read_Icon  Read the full August Market and Economic Outlook.

 

market outlook Sept 2018

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a registered investment advisor.

 

45 things smart investors never say

Crosby_2015-150x150Dr. Daniel Crosby Executive Director, The Center for Outcomes & Founder, Nocturne Capital

1. Fear of political strife – “I don’t like the President”

2. Concentrated position – “My grandfather gave me this stock”

3. Impersonal benchmarks – “Why am I down versus the S&P 500?”

4. Market timing – “Is now a good time to invest?”

5. Home bias – “Europe? I prefer the Red, White, and Blue!”

6. Tangibility bias – “I like to invest in things that I can hold”

7. Friendship bias – “I like to invest in people I know”

8. Anchoring/ “breakevenitis” – “I’ll sell when it gets back to what I paid for it”

9. Selling winners too quickly – “You never go broke taking a profit”

10. Mere exposure effect – “Buy what you know”

11. Zero risk bias – “I’ll keep this dry powder for a rainy day”

12. Performance chasing – “This has been hot…”

13. IPO investing – “Have you heard of this new company…?”

14. Shifting risk tolerance – “I’m a high-risk high-reward person”

15. Ostrich effect – “Why mess with a good thing?” (complacency)

16. Confirmation bias – “All of my friends say…”

17. Overconfidence – “It won’t happen to me…”

18. Hindsight bias – “How did you do in 2008?”

19. Restraint bias – “I’ll jump on the next March 2009”

20. Self-serving bias – “Why aren’t my returns higher?” (two-way street)

21. Affect heuristic – “I’m going with my gut on this one…”

22. Appeal to authority – “But Jim Cramer said…”

23. Status quo bias – “Rebalance? Why bother?”

24. Hyperbolic discounting – “I’ll start saving later…”

25. Gambler’s fallacy – “I’m on a roll!”

26. Herding – “My friend told me to check out…”

27. New era thinking – “Yeah, but this time is different…”

28. Representativeness – “This will be the Great Depression all over again”

29. Bias blind spot – “But I would never do that!”

30. Ambiguity aversion – “Why can’t you just give me a straight answer?”

31. Babe Ruth Effect – “Why did you have me in last year’s big winner?”

32. Dread risk – “I’m gonna buy gold”/ “What about the zombie apocalypse?”

33. Fundamental attribution error – “Why aren’t you beating the market? I could do better myself!”

34. Illusory pattern recognition – “This chart looks just like 1929!”

35. Money illusion – “I’m a millionaire! What do you mean keep working?”

36. Myopic loss aversion – “Excuse me, I have to make some hedging trades.”

37. Sunk cost fallacy – “Well, we’ve already gone this far so…”

38. Turkey illusion – “Recession? Never heard of it.”

39. Fetish for complexity – “I need hedge fund exposure! What am I paying you for?”

40. Declinism – “The way I see it, the world is just going to hell”

41. Framing – “Save 10%? Impossible.”

42. Illusory truth effect (believing a market myth frequently repeat) – “Sell in May and go away”

43. Information bias – “Let me just turn on CNBC”

44. Outcome bias – “You told me not to buy individual stocks and it went up. Ha!”

45. Post-purchase rationalization – “I mean, I NEEDED that.”

The Center for Outcomes, powered by Brinker Capital, has prepared a system to help advisors employ the value of behavioral alpha across all aspects of their work – from business development to client service and retention. To learn more about The Center for Outcomes and Brinker Capital, call us at 800.333.4573.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a registered investment advisor.

Investment Insights Podcast: Markets climbing a wall of worry

Chris HartSenior Vice President

On this week’s podcast (recorded August 30, 2018), Chris discusses the seven bricks that Strategas considers to be the largest in their “wall of worry”.

 

Quick hits:

  • Many believe we are witness to one of the most unloved bull markets of all time.
  • It is important to try and set aside emotion and gut feeling, and instead focus on fundamentals to help guide your decision-making process.
  • Are there plenty of bricks in the wall to worry about? Yes, but fundamentals remain strong and reinforce our belief that markets still have room to move higher.

For the rest of Chris’s insight, click here to listen to the audio recording.

investment podcast (1)

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.

Investment Insights Podcast: Will Turkey topple the global economy?

Tim Holland, CFA, Senior Vice President, Global Investment Strategist

On this week’s podcast (recorded August 24, 2018),
Tim discusses if the economic and market issues in Turkey might serve as catalysts for a global recession and bear market.

Quick hits:

  • The country’s Borsa Instanbul 100 Index is off 22% year to date and its currency, the Lira, has lost half its value against the US dollar.
  • Turkey accounts for 1.5% of the world’s GDP, so the country is a nominal contributor to global growth.

For Tim’s full insights, click here to listen to the audio recording.


investment podcast
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a registered investment advisor.

Password potato chips

Jim O’Hara, CISM, CISSP, CEH, Information Security Officer

Passwords are like potato chips.  You can’t (and shouldn’t) have just one.

A new trend is developing in phishing and email extortion tactics. Attackers are including the potential victims’ passwords in the messages sent. Why would they do this?

If you’re the target of this attack, you’ll typically receive a message from someone claiming they’ve compromised your computer and have obtained a list of your website usernames and passwords.  The message will contain a set of credentials to a site you’ve used, which were valid at some point. You’ll also be threatened with some sort of undesirable consequence unless an online payment is made. By including valid credentials in the extortion message, the attacker is hoping to instill fear and doubt in your mind, prompting you to take immediate action.

But how did the attacker obtain your credentials?

When a website is compromised, the attacker typically mines the site for useful information, including the login credentials of the site’s users. The attacker knows that people tend to be lazy when it comes to passwords, and there’s a good chance one site’s credentials will work for other sites the user visits. These collections of stolen usernames and passwords are constantly being bought and sold online, and eventually, make their way into the hands of an extortionist. It’s likely the credentials in the email you receive will have been stolen quite some time ago, and in many cases are no longer valid. If you use the same password for more than one website, it will be impossible for you to determine which of the sites you visit was compromised.

This is why it’s so important to maintain unique passwords for each account you have. Yes, it takes a bit more effort to maintain separate passwords, but the additional protection is well worth the effort.

Tips to protect yourself: 

  • Never use the same password for more than one website. To keep track of multiple passwords, consider storing them in a password-protected spreadsheet.
  • Change your passwords from time to time. Especially for email accounts, or other accounts which don’t employ multi-factor authentication.
  • Never use public computers to access sensitive accounts. Even if you direct the browser to not save your credentials, the machine could be compromised in other ways designed to capture your credentials regardless.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor

A crash course in financial maturity: 4 lessons for children going off to college

beaman 150 x 150Noreen D. BeamanChief Executive Officer

As a certified public accountant, I enjoy being organized and find it helps maximize my productivity during the day. Not only does organization benefit my professional life, but it also helps in my personal life, particularly when it comes to discussing financial readiness with my children. As I think back on the financial maturity fundamentals I imparted on my two daughters – one who completed law school and the other who’s completing her graduate degree – I find myself in a familiar position as I focus on my son who is a junior in high school and will be leaving for college in two short years. Below are some of the items on my financial maturity list that may help cover the basics as others face a similar situation.

1. Use resources wisely 

As simple as it sounds, insist that your child knows and makes good use of the resources at his or her disposal. For example, if you’ve bought a dining plan there should be limited spending on food outside the dining plan. Your child should regard credit at the campus store or library/print center as limited resources that only get replenished when wisely used.

2. Be choosy with checking 

Encourage your child to do some research and find the best banking option. According to NerdWallet, a student-focused checking account can save students an average of $110 or more in fees each year, when compared to the most basic account available to the general public. Your child should pay attention to the conditions that allow for the waiver of such fees. For example, some college checking accounts will waive the monthly fee as long as the student maintains a minimum balance, receives regular deposits, or links to a parent’s checking account. Have your child take notice of the banks which are most prominent on campus and those that have easy-to-access branch locations. If your child chooses a bank that does not have a local presence, make sure he or she is aware of how quickly service charges for out of network ATMs can eat into their account. 

3. Credit scores matter 

Your child needs to know the importance of building good credit, as future landlords, employers, and banks will use that score to determine eligibility for housing, jobs, and loans. Building good credit is a process that often starts in college.

Students with little or no credit history can often obtain credit if they are able to provide proof of capacity to repay debt, or if they have a co-signer, who can bear the financial responsibility for the debt.

If your child is going to get a credit card, make sure he or she knows to pay the full balance each month, and on time. They should also be advised only to make a purchase on credit if they know how to pay for it when the bill comes due. You should have a conversation about the importance of building a positive credit history to pave the way for future financial transactions. Additionally, they should understand that your credit score, as a co-signer, is at risk if they abuse the card privileges. 

4. Know where it’s going

Set the expectation with your child that when you ask where all the money is going, they have an answer. Encourage your child to download a free app, like Mint, to easily track and monitor spending and stay on top of account balances. Explain that tools such as Mint help increase awareness and lead to better financial decision-making.

There are only 940 Saturday’s between a child’s birth and leaving for college so enjoy the last few days, months, or years before they start the next chapter of their lives.

We at Brinker Capital believe goals are personal, so solutions should be too. Learn more about Brinker Capital and our investment solutions at BrinkerCapital.com.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a registered investment advisor.

Investment Insights Podcast: August 2018 market and economic outlook

Leigh Lowman, CFA, Investment Manager

On this week’s podcast (recorded August 10, 2018), Leigh provides a brief review of July markets.

 

Quick hits:

  • The third quarter was off to a good start with risk assets positive for July.
  • Global trade tensions continued to escalate throughout the month, but geopolitical uncertainty was offset by positive economic growth.
  • The S&P 500 Index was up 3.7% for the month with sector performance positive across the board.
  • Developed international equities, as measured by the MSCI EAFE Index, was up 2.5% for the month and flat year-to-date.
  • The Bloomberg Barclays US Aggregate Index was flat for the month and down -1.6% year-to-date.
  • Overall, we remain positive on risk assets over the intermediate-term.

Listen_Icon  Listen to the abbreviated audio recording.

Read_Icon  Read the full July Market and Economic Outlook.

 

market outlook (10)

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a registered investment advisor.

 

Vlog – Is value poised to gain on growth?

Tim Holland, Brinker Capital’s Global Investment Strategist, discusses how value stocks have badly lagged growth stocks, but there are signs that dynamic could be shifting.

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The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a registered investment advisor.

You will never regret your vacation

Crosby_2015-150x150Dr. Daniel Crosby Executive Director, The Center for Outcomes & Founder, Nocturne Capital

Bronnie Ware is an Australian nurse who has spent her career in a palliative care unit, caring for those with very little time to live. As someone who interacts with the dying, she has had the privilege of speaking with these people about the things that make their life worth living, as well as what they wish they’d done differently. Ware summarized the top five regrets of those about to pass on in her excellent blog, “Inspiration and Chai.” The “Top Five Regrets of the Dying” are:

  1.  I wish I’d had the courage to live a life true to myself, not the life others expected of me.
  2.  I wish I hadn’t worked so hard.
  3.  I wish I’d had the courage to express my feelings.
  4.  I wish I had stayed in touch with my friends.
  5.  I wish I had let myself be happier.

Notice, not one mention of money and the only mention of work is to say they (especially male patients) wished they had done less of it. If you are like me (and perhaps like most people), you are chasing the wrong dream and setting the wrong goals. As you sit and evaluate your life as it draws to a close, I promise you that you will never regret the year your portfolio underperformed the benchmark, but you may well regret lost time spent living a life that confused money with what matters much more.

The Path Forward
In a money-obsessed world that has socialized us to chase the almighty dollar, it can be weirdly unsettling to learn that money isn’t everything. As much as we whine about money, having something that is the physical embodiment of happiness is nice. We can hold it, save it, get more of it, all while mistakenly thinking that getting paid is how we “arrive.” Realizing that money does not directly equate to meaning can leave us with a sense of groundlessness but once we’ve stripped away that faulty foundation, we can replace it with things that lead to less evanescent feelings of happiness. Breaking your overreliance on money as a substitute for real joy is a great first step, here are two ways to move forward upon having made this important realization:

Spend money in ways that matter – Let’s be balanced in the way we talk and think about money. It’s not the key to happiness, but it’s not nothing either. A lot of our troubles with money stem from the way we spend it. We think that buying “things” will make us happy. We engage in retail therapy which is quickly followed by feelings of regret at being overextended. Before we know it, we’re surrounded by the relics of our discontent; the things we bought to be happy become constant reminders that we’re not.

Instead of amassing a museum of junk, spend your money on things of real value. Spend a little more on quality, healthy food and take the time to savor your new purchases. Use your money to invest in a dream – pay yourself to take a little time off and write that novel about which you’ve always dreamt. Give charitably and experience the joy of watching those less fortunate benefit from your wealth. Finally, spend money on having special experiences with your loved ones. It’s true that money doesn’t buy happiness, but it can do a great deal to facilitate it if you approach it correctly.

Find a new metric – Part of the appeal of money as a barometer for happiness is that it’s so…well…quantifiable. Meaning, joy, happiness, and fulfillment are all abstractions that can be hard to get our hands around. Thus, we aim for something we can count (but end up sadly disappointed). So, take things that really will make you happy and try to come up with metrics for those things instead. Maybe you enjoy painting and you could set a goal to complete three new pieces by the end of the summer. Perhaps you want to be more service oriented and you could set a goal to engage in a charitable act each week. The impulse to measure happiness is a natural and good one, let’s just make sure we’re using a yardstick that delivers on its promises.

The Center for Outcomes, powered by Brinker Capital, has prepared a system to help advisors employ the value of behavioral alpha across all aspects of their work – from business development to client service and retention. To learn more about The Center for Outcomes and Brinker Capital, call us at 800.333.4573.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.