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As advisors are adopting wealth management technology, they seem to be focused on the risk tolerance aspect of risk system implementation. But building a portfolio by subordinating everything else to the risk tolerance is detrimental. Portfolio creation in this case becomes similar to silly car shopping, when only car safety is considered when one chooses a car. It is critical for the advisor to discuss goals and risk tolerance together and identify the right portfolio that will match these two elements. Read our research with supporting examples about how to bring together client’s investment goals and risk tolerance: http://rixtrema.com/pdf/whitepaper1010.pdf

Daniel Satchkov

21 Oct 2015

High Yield: Are ‘Fixed Income People’ Smarter Than ‘Equity People’?

Increases in junk credit spreads have historically been predictive of the stock market moves, especially after a prolonged period of very low spreads. And so today, the junk debt market is in serious trouble with contagion spreading. If your clients own high yield, make sure they understand that it is a very risky investment. Read about the theory behind this predictive indicator, see how it worked in the past market crashes, and review today’s implications for financial advisors in our article published by ThinkAdvisor.

Daniel Satchkov

16 Oct 2015

How You Can Win Client’s Trust Where Others Lose It

How can an Advisor differentiate from competition in this volatile market? Study after study shows that the first thing that prospects and clients care about is capital preservation. Investors are worried about risk! Last quarter was the first time since 2008 that both stock and bond funds suffered outflows. It is a clear sign that investors are worried about risk. You clients may not have done that, but they are not immune to such feelings. If they see losses they were not prepared for — this could hurt your business. Successful advisors prevent that loss of trust by using risk technology to prepare clients for market volatility. We did a...

Daniel Satchkov

13 Oct 2015

The Investor Revolt Continues In The Wrong Direction

The «investor revolt» continues. According to Investment Company Institute, US equity funds have outflows of $17.5 billion in August on top of the $28.58 billion in July. These are very serious numbers. Overall, investors have pulled $50.3 billion out of US equity mutual funds in the past quarter. What is also staggering is that they also withdrew $46.18 billion from bond funds during the same period. Seems like Main Street is fed up with risk and wants to be rid of it. At RiXtrema, we have warned our clients about increasing risk levels since at least June of 2015, as have many other risk managers. So, at first look, it seems...

Daniel Satchkov

04 Oct 2015

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