Perspectives

Advice to the Advisors

Trade Wars | Wall of Worry | Sheaff Brock Institutional Group | Climbing Wall

Talking Clients Off the Trade War Wall of Worry

Your clients aren’t the only ones expressing worries about trade wars—everybody appears to be talking about them, says CNBC’s Elizabeth Schultz, But trade wars are nothing new, she reminds viewers as she interviews International Monetary Fund historian and Princeton professor Harold James. After a period beginning with the Smoot Hawley Act in 1930, continuing through the ”chicken wars” in the 1960s and trade disputes with Japan in the 1980s, there ensued several trade war-free decades. Now, with President Trump’s [...]

Advice to the Advisors

Demystifying the S&P 500 Index | Sheaff Brock Institutional Group

S&P 500 Index Demystification Points

“The age of advisors relying on ‘trust me’ is over,” Capital Ideas’ Ron Carson asserts. “Clients want to feel empowered.” At Sheaff Brock, we couldn’t agree more; these regular advisor e-letters are designed with client empowerment in mind, providing tactics for strengthening your clients’ self-confidence relative to making financial decisions. For example, while you’ve undoubtedly discussed the S&P 500 many times with your clients, do they really understand what the index is and how it can (as well as [...]

Advice to the Advisors

Woman climbing a Wall of Worry | Sheaff Brock Institutional Group on REITs

Talking Investors Down Off the REIT Wall of Worry

Is the current market uptrend simply a function of investors’ “Wall of Worry,” that significant uncertainty about stock price sustainability? But what about REITs? “Long before investors fell in love with Facebook and Amazon.com or even the hot stocks of past generations such as utilities and railroads, real estate inspired dreams of wealth,” writes John Coumarianos. “Some financial advisers and pundits helped fuel the love affair, suggesting that investors could reduce volatility and boost returns by adding real-estate investment [...]

Advice to the Advisors

Midterm Elections and Impact on the Market | Sheaff Brock Perspectives

Midterm Elections — Before and After

Advisors are busy these days answering client concerns as investors eye the upcoming midterm elections with caution, considering factors that might negatively affect stock prices. In fact, Sheaff Brock Managing Director Dave Gilreath pointed out in a recent Knowledge Builder presentation, midterm elections have been inflection points for equity markets in the past, regardless of which party won or lost! True, Gilreath admits, there has always been a correction during a midterm year, but the interesting thing is that the [...]

Advice to the Advisors

P/E Ratio | Price Earnings Ratio for Today's Market | Sheaff Brock Institutional

The P/E and Client Pessimism

Investors have become used to keeping their eye on the price earnings ratio of their pet stocks. In fact, the P/E is a useful way to evaluate the attractiveness of a company's stock price compared to its current earnings per share. As observers of the market, we also know the truth of Josh Kennan’s observation in thebalance.com: “One potential way to know when a sector or industry is overpriced is when the average p/e ratio of all of the [...]

Advice to the Advisors

Yield Curve | Sheaff Brock Institutional Group

Curbing Client Concerns About the Yield Curve

The Fed has really focused on the yield curve, a commentator opined on CNBC's Trading Nation. “While a flat yield by itself isn't bad, when it inverts and the yield curve for the 10-year yield starts to yield less than the three-month yield, that's when the red flags go up for a potential recession." “This is currently the longest time since the yield curve inverted,” Paul Hickey pointed out in that CNBC interview in March. “The bond market has not seen an [...]

Advice to the Advisors

Sheaff Brock Institutional | Economic Indicators Through the Windshield

Indicate to Your Clients—Economic Indicators Point Upwards

Leading indicators, those pieces of data economists view looking forward “through the windshield,” continue in an upward trend.  In addition to stock market and interest rate data, economic indicators include: real gross domestic product (GDP) money supply stock futures the Consumer Price Index the Producer Price Index current employment Much of the data for economic indicators is compiled by: the Conference Board’s Consumer Research Center the U.S. Department of Labor’s Bureau of Labor Statistics the U.S. Census Bureau Who uses leading indicators [...]

Advice to the Advisors

Sheaff Brock Institutional Group | Client Handholding During Market Volatility

Market Volatility Handholding 2.0

Make no mistake—your clients are talking about them. No, not the scandals and shootings—it’s the ups and downs of stock market volatility. “Watching the stock market daily in 2017 made for a rather dull sport, even though it was a boon for investors as stock indexes notched record after record. Not so this year,” writes Anna-Louise Jackson in nerdwallet.com. The talking heads are out in force, encouraging clients’ concerns: “We’ve got so many competing narratives, it will take a while [...]

Advice to the Advisors

Sheaff Brock Institutional Group | VIX | The "Fear Factor"

When Market Volatility Causes Client Fear, Cite the “Fear Factor”

The VIX, ticker symbol for the Chicago Board Options Exchange’s Volatility Index, has the nickname “fear factor.” Paradoxically, a high VIX is not necessary bearish for stocks, you can remind clients, because market volatility refers to upward movements in the market along with downward ones. What a high VIX reading does mean is that investors are seeing significant risk that the market will move sharply, whether up or down. The VIX tends to be low in “ho-hum” times, when [...]

Advice to the Advisors

Sheaff Brock Institutional Group | client watching tv needing comfort care for investment market volatility

Financial “Comfort Care” During Market Volatility

Comfort care, in geriatrics, involves offering attention to the psychological and spiritual needs of the patient and the patient’s family. These days, it seems, financial advisors are being called upon to provide comfort care to their investors, many of whom are suffering from market volatility-induced manifestations of the investor fear factor. It’s no exaggeration to say that advisors today serve as our industry’s “financial health psychologists,” understanding how psychological, behavioral, and cultural factors contribute to our clients’ financial health—or [...]