Ever wonder why financial salespeople push certain products? According to economist Steven Levitt, incentives are the cornerstone of modern life. The broker pushes certain mutual funds because she makes a tidy 5% sales commission if you take her advice. The insurance man loves annuities because he can pocket an astounding 10% commission on each one he sells.
Though we largely advise our clients to avoid market timing, the rest of herd may be returning to the market soon…”In 2011, strategists expect the stock market to notch double-digit gains and recommend investors boost allocations to ride the wave”
Be careful if someone approaches you touting their financial expertise based on some fancy initials after their name. Regulators report an uptick in financial advisers using dubious designations to court older, wealthier clients in an effort to sell high-fee investments that aren’t appropriate.
“Today giant banks not only create and sell investment products, but also bet on those products, and sometimes against them putting bank’s interests at odds with those of their customers.”
Investing too much in your company’s stock? A Hewitt survey reveals that when company stock is a 401k option, people hold an average of 21% of company stock. This allocation is too large given that many experts recommend that company stock should be <10% of your portfolio (think Enron and Lehman Brothers).
Now this is disappointing news. The do-gooder from CHiPs is taken down by a FBI+SEC sting. At least take a moment to click on the link and relive better times from the good old days.
NorthStar Equity Portfolio surged 20% in September and continues to outperform the S&P 500 over multiple time periods. We are passionate about supporting our clients through our unwavering commitment to disciplined and quantitative investing.
(Past performance is not an indication of future results. Please see performance disclosures at https://nstarcapital.com/performance)
