Resource Search

Research shows that individuals investing directly in stocks or in mutual funds tend to have substantially lower returns than do comparable equity indices or the funds themselves. This underperformance is attributable mainly to human behavioral biases, either cognitive or emotional, which have long been the focus of behavioral finance literature. Of the many deficiencies researchers have identified, one of the most significant is loss aversion. That and other behavioral biases cannot be avoided, but their effects can be diminished.

There were two distinct periods during the quarter divided by sentiment and performance. The start of the year through February 11 was a “risk-off” period of negative sentiment and sharp declines across asset classes and countries. Many assets had double-digit declines during the first half of the quarter. Sentiment shifted abruptly and most markets rallied starting February 12. Many major indices erased prior losses to post gains for the quarter.

Prior to the Brexit vote on June 23, financial markets were relatively strong. The S&P 500 index was trading just under its all-time high and the British pound was at the highest level of the year. The day after the vote, markets reacted sharply with risk-assets dropping and safe haven assets rising. Oil, the S&P 500, and the FTSE Eurotop 100 fell 5 percent, 4 percent, and 6 percent respectively. Gold gained 4 percent. The sell-off lasted two days and equities regained much of the two-day declines by month-end.

Recognize that a cyber attack will occur at some point during a business lifecycle. Whether it is through web attacks, email phishing, exploit kits, point of sale, keystroke logging, or ransomware, the bad actors have figured out how to defeat your latest defense against a cyber attack. They know what will make you click on the link that will give them the beachhead into your computer system.

Just as an individual goes through life cycles, so does a charity. From the start-up phase to adopting a strategic vision to looking at ways to grow the charity, there are many steps to consider at each important phase of the charity’s lifetime. By bringing discipline and focus to your family philanthropy and going beyond just writing checks, your charity has the best chance of making a greater impact.

Investment in collectible assets is growing worldwide as wealthy individuals in emerging markets such as China, India, and Latin America join the ranks of collectors. While most collectors invest primarily for their own pleasure, collectibles can be a good investment, too. If you collect items that you’re passionate about—whether they are cars or wine or jewelry or even autographed baseballs—it’s important to consider the financial side of your avocation and how to maximize the investment value of your collection.

The federal government proposed sweeping new tax rules earlier this month that would dramatically affect family businesses, investment partnerships and other entities. These rules, which could become final and binding as early as the end of 2016, would artificially inflate the value of interests in family entities for gift and estate tax purposes. Families should now consider whether to accelerate their plans to transfer family business and investment assets ahead of these rules.

Under the IRS’s proposed new regulations, they would permanently and profoundly change estate planning for families that own a controlling interest in a privately held corporation, partnership, or limited liability company. The IRS has requested comments on the proposed regulations by November 2, 2016, and will hold a hearing on December 1, 2016. Even if the regulations are finalized in something close to their current form, portions of the regulations likely will be subject tochallenge on the grounds that they exceed the scope of the statute.

It is an unfortunate fact of life that, as we age, our cognitive powers often decline. To assist people as they reach this stage in their lives, states provide a mechanism by which a person’s friends and family may petition a court to declare him or her incapacitated, and for the court to appoint a guardian to manage his or her affairs. While the guardianship process is meant to assist people in cognitive decline, it also exposes them to considerable risk. However, there are steps that you and your family can take to minimize those risks, including designating a preneed guardian.

Cloud-based applications, also known as Software as a Service (SaaS), offer significant benefits. They are highly affordable, require minimal IT involvement, have no hardware requirements, and offer great flexibility. Yet there can be significant risks to a firm if it does not review vendors carefully. Unfortunately, security controls vary significantly from one SaaS provider to the next. Knowing what to look for when selecting SaaS vendors and implementing sound security measures will help protect your firm against a data breach and the significant repercussions that come with it.