Blog Medium Without Sidebar

Something incredibly important just happened in the 401(k) plan sponsor space. An excessive fee lawsuit has been filed against a $9.2M plan with 114 participants. As we’ve been saying for months, smaller plan sponsors better stop being complacent. Conventional wisdom had it that smaller plans can fly under the radar and avoid such lawsuits. False. Here are some important statements from the lawsuit (Debbie Damberg and Tony Severson vs LaMettry’s 401K Profit Sharing Plan): 43.Defendants did not disclose to Plan participants that: similar investments to those selected by Defendants for the Plan were available from other providers at significantly lower expense to the Plan; the selected funds charged higher fees...

Daniel Satchkov

24 May 2016

Robos Think It’s A Great Time To Buy Risk Assets

Most people who know a bit about financial markets history know that we are in unprecedented territory with central bank stimulus, gratuitous buybacks, widespread accounting shenanigans. But robo-advisors apparently think it is a great time to buy risk assets. Check out this Morning Markets Briefing from Convergex (subscription is free) in an article called Millenials and Robo Advisors. They tested allocations assigned by Wealthfront & Betterment to millennial and baby boomer investors. A 22 year old earning $50K received a 90/10 allocation, while a 55 year old earning $250K received a 73/27 or 65/35 mix. Why is that? Do robos inherently love equities? Absolutely not, it happens because they use...

Daniel Satchkov

12 Feb 2016

Negative Rates – Welcome To Beyond The Looking Glass

Wow, just listen to all the chatter about negative interest rates! The question in my mind is not if this economic twilight zone is coming to the United States, but rather when. Japan, after all, had a decent head start to the rest of the world in terms of QE policies, so it may take some time to get there, but I believe we will see negative rates from the Fed. This has serious implications for risk management and portfolio construction. Read Full Article Here

Daniel Satchkov

12 Jan 2016

New Risks in 2016 and New Scenarios For Your Client Meetings

Dear colleague, happy new year! 2016 is shaping up to be an extremely volatile year to say the least. The key risks for 2016 stem from two factors: Sharp drop in energy prices that persists Fed starting to raise rates Energy has had historic declines in 2015. The main issue is not the oil price per se, but the way it impacts corporate borrowers and sovereign wealth funds abroad. We did a deep dive into the drivers of the upcoming instability for 2016, and outlined the scenarios to use in testing your clients’ portfolio vulnerability. This research has been published by Financial Advisor Magazine; you can read it HERE: Enjoy!

Daniel Satchkov

28 Dec 2015

Frontrunning Goes Full Star Wars: Uses Trading Lighsaber

By now most of market participants are aware of the ubiquitous front running going on in the markets. Michael Lewis detailed only some of its aspects in its excellent Flash Boys. Here is some amazing investigative work that uncovered that frontrunning is now almost literally Star Wars, with lasers being used to outrun regular investors. Enjoy this amazing piece and may the Force will be with you ))) http://www.zerohedge.com/news/2015-12-27/meanwhile-over-new-york-stock-exchange-lots-lasers