I don’t think we’re in a bond bubble, although I know many people feel that way. Our increase in our equity allocation recently simply reflects the momentum in stocks at the moment, although I don’t have long-term faith in them. American businesses continue to cut costs, and profits continue to out-pace revenue growth. Also, strength in the manufacturing sector is helping. Lastly, people are becoming wary of emerging markets, and I expect a hard landing in China, which would be good for the United States. But all that said, I believe a peak in stocks will probably occur later this year, accompanied by a major correction. In order for the rally to occur beyond that, you have to believe people are happy with their savings rate and will begin spending again at levels seen earlier in the decade. We’ve seen the savings rate recently go from below 1% to 5% and I think it will still double from there. That means they’ll have to finance purchases if they want them, but they no longer have access to the type of credit they once had. So near-term we like stocks; longer-term not so much.
ThinkAdvisor's TechCenter is an educational resource designed to give you a competitive edge by keeping you abreast of new tech innovations and need-to-know information that can be applied to your business.
Consider the benefits of converting to a fee-based model, along with comparing it to a commission structure.
We've developed strategic and tactical workflows to help you get easy, flexible workflows to help you through most scenarios.
Let’s take a closer look at those risks and the potential impact they may have on a firm.
Dec 13, 2016
Join this complimentary webcast that will provide a deeper appreciation for these client segments and their needs, and show how advisors can offer protection and...
Dec 08, 2016
Join this complimentary webcast to hear best practices and next steps for operating effectively in the face of fiduciary regulations.
Nov 30, 2016
Join this complimentary webcast that will provide cybersecurity tips for compliantly protecting firm & client data.