Montag & Caldwell’s Post

Investors don’t mind when their portfolio experiences a positive tracking error (their portfolio outperforms the benchmark). Still, they tend to get upset when they experience negative tracking errors (their portfolio underperforms the benchmark). But should that be the case? To answer that question, we need to begin by establishing what should be core investment principles. When building a portfolio, investors should adopt the following core principles. First, because the evidence demonstrates that markets are highly efficient, investors should avoid active strategies. Instead, they should use only strategies (such as, but not limited to, index funds) that are systematic, transparent, and replicable. Second, if markets are efficient, one should also believe that all unique sources of risk have similar risk-adjusted returns. Not similar returns, but similar risk-adjusted returns. If this was not the case, funds would flow to the sources of risks with higher risk-adjusted returns until an equilibrium was reached. Read blog by Larry Swedroe in comments to finish reading.

Recession Signals Vs. Stock Market Surge WWM Financial is an SEC Registered Investment Advisor The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

For investors of all sizes, grasping the various risk and return premiums associated with their investments is crucial. The market risk premium is a valuable tool in this regard. In simple terms, the market risk premium is the difference between the expected return on an investment and the risk-free rate. This metric quantifies the additional return an investor requires to compensate for taking on increased risk. The risk premium encompasses required returns, historical performance, and expected future returns, and it varies for each investor. Understanding the market risk premium is essential because different investments carry different levels of risk. Ideally, assuming additional risk should yield greater potential returns compared to the risk-free rate. Ultimately, making informed investment decisions involves balancing these risks with your financial goals and developing a strategy aligned with your family's risk appetite.

Recession Signals Vs. Stock Market Surge WWM Financial is an SEC Registered Investment Advisor The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

In a world where public market assets may not be able to produce the risk-adjusted returns that investors seek, alternatives should play an essential role in diversified portfolios. Find out why: http://spr.ly/6046iSmj6

Recession Signals Vs. Stock Market Surge Savvy Doc Financial Planners is an SEC Registered Investment Advisor The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀: 𝗠𝗮𝗿𝗸𝗲𝘁 𝗨𝗽𝗱𝗮𝘁𝗲𝘀 𝗮𝗻𝗱 𝗦𝗺𝗮𝗹𝗹 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗢𝗽𝘁𝗶𝗺𝗶𝘀𝗺 This week’s trading highlights are centered on tomorrow’s release of the November Consumer Price Index (CPI). However, today brings noteworthy data, including a rise in small business confidence. The NFIB Small Business Optimism Index hit 101.7, surpassing its long-term average of 98 for the first time in nearly three years. Businesses anticipate growth opportunities amid economic adjustments and reduced labor costs. While markets opened mixed, investors remain focused on inflation and the Federal Reserve’s potential rate adjustments. These updates underscore an evolving economic landscape worth monitoring. While you shouldn't focus or make investment decisions based on daily market news, it's important to stay informed in this evolving economic landscape. Want to speak in person, via Zoom, or over the phone? Our calendar can be found online at https://lnkd.in/gV39bdjg.

Curious about how to measure the performance of your investment portfolio beyond just returns? Check out our quick 30-second video on Jensen's Alpha! 📈 🔍 What is Jensen's Alpha? Jensen's Alpha is a key metric that assesses a portfolio's performance by comparing its actual returns to the expected returns based on the Capital Asset Pricing Model (CAPM). It helps investors determine if a portfolio has outperformed the market after adjusting for risk. 📊 Why is it important ? A positive Jensen's Alpha indicates that a portfolio has delivered returns above the expected market returns, highlighting superior investment performance. 📽️ Watch the video below for a concise explanation:

Structured products, classified as alternative investments, are linked to the performance of underlying assets such as indices or stocks. They offer potentially higher returns than traditional investments and provide exposure to financial markets with added protection compared to direct investments. They are versatile and customisable, with tailored exposure to match specific risk profiles and investment goals. #StructuredProducts