Constituting roughly 80 million individuals born in the 1980s and 1990s, the Generation Y population is estimated to be as large as that of the baby-boom generation. Of Gen Yers, approximately 50 million are of investing age. Capturing this large group is critical for wealth management firms that want to see assets continue to grow once their baby-boomer clients hit retirement. What characterizes these young investors? A December 2011 Aite Group survey of 1,000 investors (240 Gen Y investors) that hold a minimum of US$25,000 in investable assets reveals the following: Half are entirely self-directed and state that they “look into investments … Continue Reading →

Anyone who has noticed how bond demand since Q1 2007 has kept the U.S. retirement fund industry’s asset acquisition in the black will understand that retail investors have not stopped clamoring for safe-harbor instruments. A similar move is afoot in the exchange-traded funds (ETF) world, where bond ETFs now compose 14% of all ETF assets — up from 5% at the end of 2006. Wait a minute — are we not entering a growth stage that should favor stock demand? I have discussed in other blog posts how macro events are setting the stage for continued investor concern, but one … Continue Reading →

Individuals are feeling the effects of oil addiction, and higher fuel costs are raising concerns about industry recovery. Well, we’ve been to the gas station recently, and US$58 for a fill-up is a shocker. But we’ve seen a lot of shocking news, haven’t we? We have headline fatigue. We are witnessing unrest in the Middle East, a triple disaster in Japan, sovereign debt crisis in the European Union, two long-term wars for the U.S. military, and the global financial crisis. And I’ve purposely left out a few things. Last week, Invesco launched a new ad campaign called “Intentional Investing.” The … Continue Reading →

In an effort to alleviate borrower distress caused by mortgage-servicer errors, the Obama administration is proposing that mortgage servicers, which are usually material operations of banks, bear the cost through an industry-wide-imposed US$20 billion settlement with banks. The supporters of this proposal suggest that this amount can be applied to civil fines (to resolve mortgage-servicer errors) or to loan modifications. Even as the 20-city Standard & Poor’s/Case-Shiller Home Price Index dropped 1% month-over-month in December 2010 — and more than 31% from the peak of the housing boom in 2006 — the slide in real estate values appears to need more time … Continue Reading →

What is the first thing created after a crisis in the United States? A non-partisan panel of folks who are not normally involved with the subject. When the flash crash happened back in May of 2010, the U.S. reaction to this crisis was no different: Let’s create a panel of people who have good intentions, but who ultimately have no power or say in the final decision. The alphabet soup of regulators (what a missed opportunity to consolidate!) listened with great interest as the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues described the problem with the listed marketplace. The most … Continue Reading →