Speaking at an AARP event in late February, President Obama proposed tougher standards for brokers and other financial “advisors” who oversee retirement accounts such as IRAs and 401ks. Specifically, the White House wants brokers–whose investment recommendations are currently subject to a suitability standard–to instead be held to a more rigorous fiduciary standard.
Despite some domestic economic headwinds, Euro-zone tension following January Greek elections, and expectations that the US Federal Reserve (the ‘Fed’) is ready to start raising short-term rates, the US stock market as measured by the S&P 500 managed to eke out a small 1% gain during this year’s first quarter.
Last October, we weighed the merits of combining both active and passive strategies in our asset allocation recommendations. Subsequently, the fund research firm Lipper estimated that in 2014, only 15% of active large cap equity managers outperformed the S&P 500.
While the Federal Reserve’s recently-concluded “quantitative easing” program has been a boon to several asset classes (including domestic equities, which are once again broaching record highs), the policy of deliberately low interest rates has been a burden to investors with large allocations to fixed income.
As indicated by a recent internet privacy breach (where private nude photos of celebrities ended up on public websites), it is becoming harder to keep secrets. In most cases, the photos were stolen from private iCloud accounts, leading to speculation that Apple’s security measures had been compromised.