Risk Parity Under the Microscope

Posted by Daniel J. Loewy (pictured) and Brian T. Brugman of AllianceBernstein (NYSE: AB) After tremendous growth over more than a decade of strong returns, risk-parity strategies have recently been struggling. Has the market run-up exposed a fatal flaw? We don’t think so.

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Endowments and Foundations: Coping with a Budgetary Shortfall

Brian D. Wodar and Ashley E. Velategui The board of the Midtown Art Museum (MAM) had an unpleasant surprise. Due to federal budget cuts, an expected $1 million grant for the upcoming year was not going to arrive. This was a huge loss for an entity that had just $9 million in assets and $200,000 [...]

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Endowments and Foundations: How Should You Spend a Windfall?

Brian D. Wodar and Ashley E. Velategui If your endowment or foundation received an unexpected bequest, would you spend more now or would you hold spending steady in order to retain more income and boost your future capacity to spend?  

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Six Easy Pieces: Fundamentals of Asset Allocation Explained

Figuring out the best split for your assets often seems daunting. But it doesn’t have to be. This template can help you get started.

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Endowments and Foundations: Should a Windfall Change Your Investment Policy?

Brian Wodar and Ashley Velategui Board members at Uptown Community Foundation (UCF) faced an enviable dilemma: what to do when an unexpected bequest boosted UCF’s capital from $10 million to $12.5 million. One board member welcomed the chance to reduce portfolio volatility by cutting the stock allocation. Another had the opposite view: with increased financial strength, [...]

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Welcome, Taper

The Federal Open Market Committee’s statement that it will begin to taper its bond purchases in January is a good sign that the US economy continues to heal, in our view.

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Lessons Learned in 2013

In 2013, interest rates rose, bonds fell, equities soared, and US income-tax rates climbed higher. Before starting to place bets for 2014, investors would be wise to think about some important lessons from 2013.

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The Marriage of QDIAs and Managed Volatility in US DC Plans

Probably the best way to connect US defined contribution (DC) plan participants with the angst-reducing benefits of managing volatility is through a plan’s qualified default investment alternative (QDIA)—especially if the QDIA is a target-date fund.

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The Market Hits All-Time High. So What?

Dianne F. Lob (pictured) and Ding Liu With the US stock market repeatedly reaching all-time highs in recent weeks, many investors are becoming leery of investing in stocks. Focusing on the market’s level is a mistake, in our view. It’s market valuation, not level, that matters. 

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Reality – Expectations = Happiness

Many US investors may be disappointed when they open their account statements.  Despite the widespread news that the Dow Jones Industrial Average gained 21% in the  first 10 months of 2013, most US investors’ taxable portfolio returns were far lower—typically somewhere between 5% and16% range.

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