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    Risk

    Portfolio risk: how much value is in the tails?

    Investors know that time in the market is their friend. Stay in the market for a long period of time, and good things will happen, even in times of high volatility.
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    Risk

    How do you explain asset interaction to clients?

    Ultimately, our goal is to build client relationships and help clients achieve their financial goals. Listen to our experts explain asset interaction in this short video clip from, "The Advisor & The Quant." 
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    Risk

    Making heads or tails of tails

    By Ron Piccinini, Ph.D., Director of Product Development An investment’s failure or success is impacted by the worst and best trading days — more than you might imagine. Understand the true value of “tails.” Investors know that time in the market is their friend. Stay in the market for a long period of time, and good things will happen, even in times of high volatility. A supporting statistic is often presented: if you miss the best days, your overall return will be dramatically lower.
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    Risk

    SmartRisk terms revealed

    Asset interaction. Drawdown analysis. Reward/risk ratio. Know the terms that will help you wow clients with SmartRisk™. SmartRisk™ doesn’t just deliver better risk estimation for your clients’ portfolios. It delivers it in a way that is easy for both you and your client to understand. Learning just a few terms used in the software and its easy-to-read reports will help you interpret the calculations and explain them to clients — not just so they understand, but so they understand in a context that truly resonates with them, influencing their behavior.
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    Risk

    How do you know if you have portfolio diversification?

    By Ron Piccinini, PhD This is inspired by a true story.  There was this fellow named Edmund. Edmund's high-priced education had taught him the virtues of portfolio diversification. His job as a banker paid him a nice sum of cash every month, plus bonus; he had bought a house, and his retirement account was comprised of a diversified mix of domestic and international stocks. On his office wall was hanging this quote from the Merchant of Venice: "My ventures are not in one bottom trusted, nor to one place; nor is my whole estate upon the fortune of this present year." To the annoying Head of Risk he used to explain: "The five-year correlation between real estate and stocks is seven percent. And the correlation between my monthly paycheck and the stock market is even lower. Low correlation, diversification!"
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    In The News

    The 5-Minute Triage: Learn Quickly if an IRA Deduction is Double Dipping

    For many middle income people approaching retirement, a common question is whether to contribute to a traditional IRA or to a Roth IRA. Often, the rationale for contributing to the Roth or forgoing an IRA contribution altogether is that the client’s tax bracket in retirement is likely to be the same or potentially higher than it is now. Unfortunately, this shortcut often misses the point. When planning a retirement investment strategy, the client should be concerned less with the tax bracket and more with his effective marginal rate, or EMR. The EMR is the actual amount lost to taxes on each additional dollar of income, or conversely, it is the actual amount saved by making a contribution to the deductible IRA.
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