● Goals-Based Wealth Management: An Integrated and Practical Approach to Changing the Structure of Wealth Advisory Practices
By Jean L. P. Brunel
Summary via publisher (Wiley)
“Goals-Based Wealth Management” serves as a comprehensive guide to safeguarding and enhancing client wealth in a manner that transforms both the services provided and the profitability of financial firms. Authored by a seasoned expert with over 35 years of experience in global wealth education and analysis, this essential manual details a novel strategy for wealth management, empowering individuals to become more involved in asset allocation. The book offers an in-depth exploration of the goals-based approach, documenting effective strategies and areas needing reassessment, along with a straightforward model to assist advisors in guiding clients through intricate processes.
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The three-month average of the Chicago Fed National Activity Index (CFNAI) is projected to slow to a reading of +0.05 in the February update, which is set to be released on March 23. This forecast, based on The Capital Spectator’s median point estimates from various econometric models, is notably below January’s +0.33, which indicated a robust above-average economic growth rate in the US relative to historical standards. According to guidelines from the Chicago Fed, only negative values below -0.70 signal an “increasing likelihood” that a recession is underway. The expected CFNAI reading for February suggests a growth rate that remains slightly above the historical average.
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How Often Should You Take Tactical Asset Allocation Decisions?
Byeong-Je An, et al.
March 5, 2015
The findings suggest that optimal tactical asset allocation (TAA) decisions regarding equities and bonds should ideally be made every quarter. This study examines the benefits and costs associated with varying the frequency of TAA decisions. By leveraging predictable stock returns, tactical tilts can potentially yield approximately twice the value compared to market-timed bond returns.
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● Jobless claims up slightly last week | USA Today
● Continuing Jobless Claims Near a Low, and That May Not Be Good | WSJ
● U.S. Leading Economic Index Rises 0.2% In February, In Line With Estimates | RTT
● Consumer Comfort Little Changed as U.S. Buying Climate Weakens | Bloomberg
● Philly Fed manufacturing index falls to 13-month low in March | Investing.com
● US Q4 current account deficit largest since 2012 | Reuters
The Federal Reserve has removed the term “patient” from its new policy statement, indicating a potential move towards raising interest rates. However, to temper expectations, Fed Chairwoman Yellen cautioned that the phrasing change does not imply an imminent urgency to raise rates. This sentiment aligns with the Fed’s updated economic forecasts, which revised the 2015 growth projection to a range of 2.3% to 2.7% for real GDP, down from a previous forecast of 2.6% to 3.0% made during December.The market once again seems to be embracing the lower-for-longer view, based on the latest run into bonds. After Treasury yields reached 2015 highs earlier this month, rates have pulled back in recent days ahead of tomorrow’s Fed announcement.
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● Fed Drops Patient Stance, Opening Door to June Rate Increase | Bloomberg
● Fed opens door wider for rate hike but downgrades economic outlook | Reuters
● The Fed sounds slightly worried about the strong US dollar | Quartz
● Oil futures give up gains as oversupply fears resurface | MarketWatch
● Japan’s All Industries Activity Index 1.9% vs. 1.7% forecast | Investing.com
● Wage growth slows in Britain but unemployment falls | Guardian
February proved to be a challenging month across various sectors of the US economy, although the overall risk associated with the business cycle remains low when assessed through a wide array of indicators over a trend basis. Nonetheless, the sluggish housing market and weaker manufacturing figures have sparked concerns that economic growth may not be as vigorous as previously perceived. Optimists contend that this recent downturn represents only a temporary setback caused by a harsh winter. This perspective is supported by the fact that the crucial labor market has continued to exhibit robust growth through February. On a broader scale, the overarching macro trend still maintains a substantial degree of positive momentum based on current data.
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● Is Janet Yellen committed to a summer interest rate hike? | Fortune
● US housing starts see biggest collapse since January 2007 | HousingWire
● Redbook: US retail sales rise in first half of March | MNI
● ZEW: German investor morale at brightest in just over a year | Reuters
● Japan’s Central Bank Warns of Temporary Return to Deflation | NY Times
The new construction of residential housing in the US during February fell significantly short of expectations, heightening concerns about the robustness of the economy. Analysts had anticipated a slight decline to a seasonally adjusted annual rate of 1.048 million units, a projection that has proven overly optimistic. The Census Bureau reported a staggering 17% drop in housing starts last month, reaching an annual rate of 897,000, marking the lowest seen in over a year. This raises the question: is this decline a harbinger of a larger economic issue, or simply a temporary setback influenced by severe winter weather? At this point, the answer remains elusive, although interpretations inevitably vary based on differing economic perspectives.
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The Federal Reserve’s two-day meeting commenced today, culminating in an announcement tomorrow that will be closely examined for indications regarding the timing of the first interest rate hike since 2006. Some analysts are speculating that this hike could occur as early as June; however, the recent erratic economic data suggests the Fed might prefer to postpone initiating tighter monetary policies. This uncertainty is reflected in the market’s recent inclination towards lower interest rates, as indicated by the latest surge in bond buying. Following a peak in Treasury yields earlier this month, rates have begun to retract ahead of tomorrow’s Fed announcement.
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This collection of articles provides a snapshot of the economic landscape as of March 2015, capturing a diverse range of perspectives on wealth management, economic indices, and the current state of various market sectors. As economic conditions continue to fluctuate, it is important for both individuals and advisors to stay informed and engaged with the evolving financial landscape. Embracing new approaches to asset management and understanding macroeconomic trends can empower better decisions and enhance financial outcomes.
