Advice to the Advisors

Sheaff Brock | COVID-19 Rate of Change may be explanation for strong market

The COVID-19 Rate of Change—Just One of Several Market Anomalies to Watch

It’s a puzzlement that has clients biting their nails—and worse. How, they wonder, can the market be this strong when the news continues to be so bad? Here are three important factors worth discussing with them in detail. Anomaly #1: Death Rate v. Rate of Change On March 23, 2020, two things happened. The COVID-19 death “rate of change” peaked, with a steady descent following. At the very same time, the stock market bottomed, then began a sustained rise. To be [...]

Advice to the Advisors

Sheaff Brock Institutional Group | marble columns | value in preferred securities

Recent Events Have Led to Uncommon Value Across the Preferred Securities Market

Preferred stocks, as measured by the S&P Preferred Stock Index, were trading at their highest prices in over two years in mid-February until suffering a (36%) decline through March 19th amid the Coronavirus panic. Prices have recovered, but the index is still down substantially from the average price it has traded over the last 10 years. We believe the sell-off in these shares was the proverbial “throwing the baby out with the bathwater” type of decline and driven by a [...]

Advice to the Advisors

Sheaff Brock Money Management and Stock Market News have Glimmers of Optimism | Sunlight through Tree Leaves

Stock Market News Offers Unparalleled Opportunity for Advisors

With bad news abounding—the escalating number of confirmed virus cases and deaths, unemployment, and falling corporate earnings—how could stock market news possibly have included several sharp upswings? “Markets don’t need good news to advance,” explains Sheaff Brock Managing Director Dave Gilreath, “only an inkling of better news.” Stock market prices are predictive, Gilreath adds, often moving up on anticipation of better news. In times of turmoil, clients turn to their advisors as Subject Matter Experts (SMEs), craving to be assured [...]

Advice to the Advisors

Sheaff Brock Team Reviews Charitable Planning to Meet Family Wealth Goals

RIAs can Become Talk Therapists to Tame the 3-Generation Curse

As Vernon Wong of First Hawaiian Bank emphasizes, there exists the very real danger that the wealth will dissipate by the third generation. As investment advisors, we’re all too familiar with the American version of that Chinese adage: “Shirtsleeves to shirtsleeves in three generations.” While taxes and inflation (along, possibly, with the failure to follow Sheaff Brock’s advice) can all be blamed for wealth attrition, the main reason 90% of family fortunes are affected is simply, as Augusta Dwyer of [...]

Advice to the Advisors

Bulldog wearing a tie | Dogs of the Dow | Sheaff Brock

Different Takes on “Dogs of the Dow”—Part Two

The long-time appeal of the “Dogs of the Dow” concept, Gordon Scott of investopedia.com postulates, is that “it presents a straightforward formula approach.” Out of the 30 stocks that make up the Dow Jones Industrial Average, investors, at the start of each year, select those ten with the highest dividend yield. Based on the principle that the dividend payout can be used as a measure of the average worth of the company, a high yield is seen as signaling [...]

Advice to the Advisors

Calendar Representing Double-Decades of the U.S. Stock Market | Sheaff Brock

Double-Decade Thinking Avoids Duration Neglect

As the decade draws to a close, the first since 1850 in which the U.S. did not experience a single recession and a ten-year period in which the stock market hit more than 200 new all-time highs on the S&P, investment advisors would do well to prep for client meetings by reviewing a certain chapter in the little book, The Power of Moments. Research has found, authors Chip and Dan Heath report, that “when people assess an experience, they tend [...]

Advice to the Advisors

Sheaff Brock Institutional | Gifts of Year-End Planning for Your Clients

Year-End Planning Ideas to Share with Clients

Even as your clients are rushing around to make eleventh-hour holiday gift purchases, it’s important to offer them “gift bags” filled with last-minute year-end planning ideas, all the while encouraging them to gear up for 2020. It’s never too late for a planning discussion, beginning with a reminder of year-end cutoff dates. Kiplinger.com offers a workable deadline checklist, while Sheaff Brock wealth managers offer some innovative “food for thought” as the year draws to a close. RMDs Required Minimum Distributions from IRAs, [...]

Advice to the Advisors

Sheaff Brock Institutional Group | Dogs of the Dow | Jack Russell "superhero" dog

Different Takes on “Dogs of the Dow”—Part One

While some analysts may write off the nearly thirty-year-old “Dogs of the Dow” theory as antiquated, Ian Cooper of chasingmarkets.com disagrees. “Plus,” Cooper adds, “we have to remember that each of the Dogs also pays a healthy dividend.” Antiquated or not, “Dogs of the Dow” is hardly new to investor vocabulary. The concept—out of the 30 stocks that make up the Dow Jones Industrial Average, the strategy involves choosing the ten with the highest dividend yield. The premise, as Investopedia explains, [...]

Advice to the Advisors

Elevator panel controls | Sheaff Brock | Option Overlay for Additive Returns

For the Right Clients, Option Premiums Can Offer Additive Returns

“Most economic indicators are benign,” James B. Stewart commented in a New York Times article towards the start of 2019, noting the exceptionally low unemployment rate and low inflation. In an earlier First Trust Monday Morning Outlook report, Chief Economist Brian S. Wesbury made some positive observations of his own that may still be relevant: “As the summer goes on, we expect evidence will continue to show that the economy isn’t slipping into recession.” Wesbury makes note of several [...]

Advice to the Advisors

Man having suit tailored, customized to fit | Sheaff Brock Institutional Group

All Over the Country, Advisors Seek Customization for Select Clients

While visiting with Advisors around the country, the Sheaff Brock team found a common thread: advisors expressing a need to outsource, particularly for customization. Overwhelmed by the need to grow their practices by capturing new assets, maintain efficient practice administration, remain involved in their communities, and keep up with continuing education, outsourcing seemed to be the topic of the day. With “traditional” outsourcing through the use of ETFs or funds often failing to satisfy the need for tailoring portfolios to [...]