For many years investors have endured a confusing dual legal standard of care that exists within the money management industry. Registered Investment Advisers (RIAs) such as AIS must place their clients’ interests first while others, such as brokers, are held to a lower standard which only requires that they offer investment choices that are “suitable” …
In June we reminded our readers that, while investment grade corporate bonds are a worthy portfolio diversifier, high-yield or “junk” bonds are far more volatile and therefore unsuitable for most household investors. Junk bonds are loans to firms with dubious credit quality (these bonds are graded Ba or lower by Moody’s Investor’s Service, or BB+ …
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek The Fed and Congress, when weighing U.S. monetary policy, would do well to consider the lessons provided by structured investment management, which avoids forecasting and the wisdom of experts in …
September 2015 – Rules for the Fed, or Shall the Fed Rule? Read More »
The recent budget deal that emerged from Congress includes provisions that will spell the end of two popular claiming strategies for Social Security. Once a worker reaches full retirement age, he or she can file for benefits but suspend actual payment of those benefits in order to earn credits that increase the eventual benefit by …
In mid-March yields on the sovereign debt of several euro zone nations turned negative. The notion of investors accepting negative interest rates may seem bizarre, but it is not necessarily irrational. Readers should not be alarmed or change their strategy should negative nominal rates persist overseas or emerge in the U.S. But it is important …
In a fiat currency monetary regime, capital markets are impacted immediately by any significant information suggesting the future actions of central bankers. World markets are especially sensitive to any news from the U.S. Federal Reserve Bank’s Open Market Committee (FOMC) regarding sentiments pertaining to its targeted federal funds rate (the interest rate at which banks …
U.S. federal deficits and the growth of federal debt make for attention-grabbing headlines and compelling soundbites. Investors often hear that we are “burdening our grandchildren” with exorbitant taxes in the future, and inferences are made that a return to higher marginal tax rates will ensure a return to “the good old days” when current government …
May 2015 – Spending and Taxes – Beyond the Soundbites Read More »
In the current low interest rate environment many investors are “reaching for yield” by increasing their exposure to bonds with greater credit risk as a means of generating higher income or pursuing higher expected returns. Corporate bonds are an extremely valuable tool for managing risk, but caution is in order. For most individual investors, the …
Jun. 2015 – Investment Grade Corporate Bonds: A Worthy Diversifier Read More »
The AIS Model Portfolios table on page 52 includes revisions to our previous allocations, which have not changed for some time. Here we provide the rationale for those changes so that our readers can consider whether and to what extent they should modify their own portfolios in response. While we have changed the percentage allocations …
“When the siren song starts to waft toward you, lash yourself to the mast of broad-market investing.” — Ben Stein1 On Monday August 24, the stock market took investors on a wild ride; the S&P 500 tumbled by over 5% as the market opened, trimmed its losses to roughly 1% by the early afternoon, but …
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