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Podcast: Talking Cents 'The Road to Long-Term Care Planning'

September 21, 2017

The Road to Long-Term Care Planning

A Closer Look at Factor Investing | Profitability Factor

By Brent Everett

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The third factor that we will examine is the profitability factor.  Quite simply, the stocks of more profitable companies have historically outperformed those of less profitable companies, despite having higher starting valuations.  The most notable research into profitability is attributed to Robert Novy-Marx at the University of Rochester’s Simon Business School.  Like value, profitability exposure helps to explain the performance of famous investors and practitioners, including Warren Buffett and Benjamin Graham.

Is Long Term Care in Your Tool Box?

By Gina Aldaz

One certainty in life is that we age. It's not something that most of us like to think about. In fact, our busy schedules do a great job distracting us from the inevitable until life forces us to take notice. It might be aches and pains related to an old injury or seeing ourselves in the eyes of an aging parent. The reality is that we are growing older. And the likelihood that we'll need some form of assistance as we age increases, and therefore, so will the need for Long Term Care (LTC) insurance. 

A Closer Look at Factor Investing | Size Factor

By Brent Everett

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The second factor that we will examine is the size factor. Small cap stocks have historically outperformed large-cap stocks. We previously discussed the criteria for determining whether a factor is viable – namely, it must demonstrate persistence and pervasiveness, be intuitive or explainable in terms of financial/behavioral economics, and be investable. Size is a well-known factor that, like value, is included in the Fama-French three-factor model.

Unicorns and Market Efficiency

By Stephen Hart

Several years ago a new term showed up in the financial world, a unicorn. It refers to a recently established tech startup that has achieved a valuation of $1B. Think of companies like Uber, Dropbox or Airbnb. All of which are relatively young companies that very rapidly achieved a $1B valuation. Keep in mind that hundreds of similar tech companies are started every year and are either on the long road to $1B or will never get there at all. Thus, the successes have become as rare as a unicorn.

A Closer Look at Factor Investing

By Brent Everett

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For those of us who are evidence-based investment managers and subscribe to the tenets of Modern Portfolio Theory, there are specific considerations we use in designing client portfolios. We believe that markets are efficient to the degree that makes stock picking unlikely to produce excess return, and we see no evidence that market timing is a viable strategy. We consider diversification and the weighting of certain securities in the portfolio. By overweighting certain groups of securities, we increase the portfolio's exposure to "factors".

Q2 | Use Calm Markets to Define Goals

Periods of low volatility allow you to shift focus from returns to goal planning

The second quarter of 2017 was much like the previous two, continuing the trend of low volatility despite global political uncertainty and events including the Syrian war and refugee crisis, Brexit, terrorism in Europe, the political aftermath of the U.S. election, and a growing North Korean nuclear threat.  During the second quarter, we saw positive returns from every asset class.  Developed international and emerging markets equities outperformed the U.S. market.  In the U.S. and emerging markets, large caps outperformed small cap stocks and growth stocks outperformed value.  In developed international markets, small outperformed large and growth outperformed value.  Almost all developed market currencies outperformed the U.S. dollar, most notably the Euro. 

Do Stocks Outperform Treasury Bills?

By Brent Everett

New research published by Arizona State University finance professor Hendrik Bessembinder helps explain why stock picking is so incredibly difficult that active managers rarely outperform their benchmarks – and why it makes much more sense to diversify. Professor Bessembinder’s working paper titled “Do Stocks Outperform Treasury Bills?” compiles data from the Center for Research in Security Prices (CRSP) at the University of Chicago and concludes that only a very small percentage of winning stocks have done exceptionally well and that, since 1926, 58 percent of all individual stocks failed to outperform even the middling return on one-month treasury bills.

Talis Update on WannaCry Ransomware

By Stephen Hart

Over the weekend you most likely heard of the latest virus attack, the WannaCry Ransomware. WannaCry functions a bit differently than your typical virus. Once your computer is infected, the virus will seek out the most important files on your computer and encrypt them, making your computer completely unusable. The only way to regain access is through paying a ransom, which starts at $300, and continues to climb the longer you don’t pay up and eventually deletes your files. As of right now there is no fix for the virus, and estimates are that hundreds of thousands of computers have been infected.

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