130 Middle Street,
Everything Is Just Im-peachy...
One could almost be excused if the political theater emanating from our nation’s capital this last quarter was mistaken for just another of the season’s summer stock performances. But, as we’ve unfortunately come to expect these last few years, it was merely the latest episode in our spasm of partisan polarization whereby one side of the aisle is clamoring for impeachment and the other slings accusations of treasonous intentions.
Domestic and Global Market Recap... FRANCIS J. DAVIES, III
“I knew which shifts in the economic environment caused asset classes to move around, and I knew that those relationships had remained essentially the same for hundreds of years. There were only two big forces to worry about: growth and inflation.”
The third quarter was marked by a continued slowdown in the global economic data, offset by further monetary easing from the US and Europe. Signs of growth and inflation (the major economic forces as defined by the founder of the world’s largest hedge fund) were hard to find.
Richard “Chip” Harlow
This last quarter has been highlighted by volatility, choppiness and noise for both the markets and sectors. In fact, looking over the last year, it’s hard to see any sector leadership, as monthly sector fluctuations have been all over the place. The S&P500 only returned 1.7% during the most recent quarter and is up 20.6% YTD. Sector performance during the 3rd quarter ranged from -6.3% for Energy to +9.3% for Utilities.
Past Class Action Litigation Leads to Future Best Practices for Plan Sponsors… STEPHEN L. EDDY
Noted ERISA attorney Fred Reish recently reviewed four important landmark class action cases against plan sponsors and their service providers for 401(k) and 403(b) plans, and what plan sponsors should learn from the outcomes. The four cases were brought by noted retirement plan class action law firm Schlichter, Bogart & Denton out of St. Louis. Notably, the Schlichter firm does not only go after significant compensation damages in its class actions, but also demands to stay in the picture to oversee the corrective process and conditions requested of the plan sponsor in the settlement agreement (committee structure, benchmarking, and RFP results).
Evaluating Investment Risk Through Drawdown
There are many ways to quantify risk in the investment world. Alpha, Beta, R-squared, standard deviation and the Sharpe ratio are the most common. However, these measurements are only mathematical in nature as compared to an individual’s risk tolerance which can have an emotional element. Just as an equity’s risk profile may change with the economy or company-specific data, an individual’s risk tolerance may change based on multiple factors as well. And quickly. This is one of the most overlooked issues when evaluating an investors risk tolerance.
Jake joined Old Port Advisors as a Portfolio Manager Associate in August after working the last four years at various positions in the financial services and insurance industry. His experience as analyst and adviser in wealth management and planning will an invaluable asset for the next generation of OPA’s clients, as well as the numerous participants in our various employer-client retirement plans. A graduate of the University of Maine at Machias, and currently enrolled in the CFP Board Education Program at Bryant University, Jake and his new bride Isabel, recently married in her native Puerto Rico after a love-story meeting six years ago while working for Royal Caribbean, currently reside in Old Orchard Beach.