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There are a few features in the new Portfolio Crash Testing Pro (PCT Pro) that allow an advisor to compare and contrast the outcomes of various portfolio allocations. Some of the most dramatic comparisons come from including assets that feature a non-linear payoff profile when used in stress tests. This post will illustrate a simple portfolio that holds an option. We can analyze other asset types, like structured products and annuities with caps or floors built into their payoffs, in the same manner. I am going to compare a simple US-based 60/40 portfolio with $1m to the same portfolio with 1% of the equity exposure allocated to an option. Figure...

Colin Ward

12 Sep 2019

Recession Deja Vu – No Smoke Without Fire

The Weakest Drop First How did this happen? We Lower Interest Rates and This is What We Get In Return? How large is the BBB Bond Market Banks haven’t failed us before, so there’s nothing to worry about…. Maybe BBB Ratings are the New Normal When the proverbials hit the fan Good grief, what’s next? The Weakest Drop First This past July, I came across a story that sounded frighteningly familiar. A simple recycling company, Clover Technologies, saw its $693 million loan shed a third of its value almost overnight. The size of the loss wasn’t especially notable as much as the instrument used to secure the loan. A venture...

Yon Perullo

09 Sep 2019

Brexit Update – Boris Johnson Edition

When I last wrote about Brexit, Theresa May was busy trying to get her hard-negotiated agreement for terms of Brexit passed through Parliament. As we all know, this failed, May no longer occupies 10 Downing Street, and the U.K. is up against another deadline. This time, the critical date is October 31st, and it looks like they will have to ask for an extension again. The real news is the disastrous tenure of the new Prime Minister Boris Johnson, who now threatens to take the title of shorted tenured Prime Minister from George Canning who died in office in 1827 after just 119 days in office. For those wondering, Canning’s...

Colin Ward

02 Sep 2019

Recession Deja Vu: Mortgagephobia

Why do we care about Housing? What goes up must come down? Look at Where We Are No equity in a college degree Why do we care about Housing? Property is the most expensive item most Americans will ever purchase. So, we will sacrifice a lot of additional spending to keep a roof over our heads. Observing the housing market is an excellent gauge of consumer confidence and financial health. It is integrated into nearly every economic sector and makes up a significant chunk of GDP (15% of GDP). The construction of new houses is, surprisingly, a small portion of the housing market, 3-5% of GDP. Rent and mortgage payments,...

Gennady Prokofyev

28 Aug 2019

How Retirement Advisors Can Easily Send Marketing Letters to Prospects

Advanced Search for Prospects Select a Plan Send Template Letters Track Your Email Activity Client Struggles: Many clients ask us about the best ways to prospect underperforming 401(k) plan sponsors. It can be a very tedious process. First, it’s not easy to find the right contacts in the company you’re about to prospect. Then, writing a good sales proposal unique to the underperforming sponsor is a time-consuming challenge. Prospecting is a delicate balance of quality and quantity of contacts, but our new tool, Customized Trackable Marketing Letters (CTML) strikes a balance. Our Challenge: To integrate the most accurate contact info for key executives with unique data into a personalized letter....