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Money Manager Monthly |
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April 2010 |  |
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MARKET COMMENTARY
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Chasing Past Performance
By Gabriel F. Burczyk, President & CEO
 Evaluating the performance of a money manager is challenging, and often where investors and advisors make a potentially damaging mistake. Just because one did well yesterday does not mean they will do well tomorrow. Many managers we research who did well protecting assets in declining markets have shown poor past performance in rising markets. Finding a manager you can trust and feel comfortable with is extremely important, but you may also want to look for one who has historically performed well during the market environment expected for the future.
Hot or Not?
We here at WrapManager enjoy watching the names change on our published Monthly Top Ten Most Researched Money Managers. There are a few reasons why managers end up on the list, but most of the time it's due to recent out performance or underperformance. Many investors and advisors then either move money to or from these managers. Brandes Investment Partners recently released a research report titled "The Dangers of Hiring and Firing Decisions" which illustrates these actions. This report highlighted that "many 'long-term' investors allow short-term performance to sway their decisions on when to hire and fire investment managers. An academic study analyzed 660 decisions made by institutional plan sponsors and showed evidence of 'return chasing behavior.'"
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MONEY MANAGER COMMENTARY
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Recovery Continues to Gain Momentum
 Federated Investors
Federated believes we are coming out of a 25 year period where the interest of investors was fixated on rising stock prices, and away from the cash component of equities. Due to the recent economic and financial environment, Federated thinks that an increasing amount of investors will start seeking a better cash return on their investments, and that dividend strategies will do well as companies start to become more dividend oriented.
Click here for full Investment Commentary, March 2010
 Calamos Investments
Calamos believes the current economic backdrop will provide an uphill climb for bond investors. Calamos thinks that the current high debt levels of the U.S. government suggest that future yields will be on the rise. Equities on the other hand still look attractive to Calamos and they believe the current rally still has room to run and that a rapidly increasing monetary base and the continuation of stimulus measures will continue to provide a tailwind.
Click here for complete Market Update, March 2010
 Lord Abbett
Lord Abbett believes the recovery continues to gain momentum and small cap stocks will persist in providing the market leadership. Coming out of recessions, Lord Abbett's research has shown that small cap stocks tend to be the leaders and they believe that this trend should continue going forward for some time.
Click here for full Economic Insights, March 15, 2010
 BlackRock
BlackRock believes that economic growth should continue to improve, which should lead to a boost in consumer confidence. Recently there has been an increase in corporate share buy-backs and merger and acquisition activity, which BlackRock views as a positive trend that further promotes an environment that is equity friendly. All of this leads BlackRock to believe that the cyclical bull market has further room to rally.
Click here for complete Investment Commentary, March 2010
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TAX & RETIREMENT
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The Advantages of a Stretch IRA
 Last month we suggested that investors review their estate planning documents given the uncertainty of estate taxes. This month, we continue our estate planning theme and discuss the idea of a "stretch IRA." This isn't a special type of IRA, rather an estate planning strategy available to you.
"Stretching" an IRA means maximizing the benefits of your IRA and tax-deferred growth over several generations. This is done by naming younger generation family members or trust as beneficiaries. Doing so can help avoid large lump-sum distributions and help spread out, and even lower, the required minimum distributions. This is possible because the RMDs for an inherited IRA are based on the age of the person inheriting the assets. Thus, the assets are able to grow tax deferred for a longer period of time! In addition, almost any type of IRA, including Traditional, Roth, and SEP can be stretched!
Be sure to read our piece explaining Stretch IRAs in detail by clicking the link below. You'll learn more about them and understand how the different options might benefit you and your loved ones.
The Advantages of a "Stretch" IRA
As always, feel free to give one of our wealth advisors a call at (800) 541-7774 or email info@wrapmanager.com to discuss your current situation and learn more about how we can help!
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The attached report and information have been prepared or produced by WrapManager, Inc. from sources and data believed to be reliable. Information provided in this report is for educational and illustrative purposes only and should not be construed as individualized investment advice, as an offer to sell, or the solicitation of an offer to buy any security in any states where such an offer or solicitation would be prohibited by regulations. WrapManager, Inc. is not a tax advisory firm. We recommend you contact your tax attorney or CPA prior to utilizing any of the tax-related strategies mentioned or discussed. Returns and experiences will vary for each client. Each client's risk tolerance and investment objectives are unique to them. Past performance may not be indicative of future results. No assumption that future performance of any specific investment or product made reference to directly by WrapManager, Inc., on its Web site and in marketing materials, will be profitable or equal the corresponding indicated performance level(s). If performance numbers are generated gross of fees, a client's return will be reduced by investment advisory fees and any other expenses. Opinions expressed are those of WrapManager, Inc. and are subject to change without notice and are not necessarily those of Prospera Financial Services, Inc., its directors, parent company or its affiliates. Securities offered through Prospera Financial Services and cleared through First Clearing, LLC. Prospera Financial Services - Member FINRA/SIPC. © 2010 WrapManager, Inc. (800) 541-7774 |
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