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Recovery Looks Slow for Macy’s After First Quarter Loss
Morningstar views Macy’s shares as undervalued for the no-moat company after a massive loss in the first quarter from the COVID-19 pandemic.
Don’t Blame Retail Investors for Stocks’ Volatility
A longtime adage among fund providers is that retail investors are more desirable than institutions, as not only will retail investors pay higher fees, but they also provide relatively “sticky” assets that will stay with funds through long periods of mediocre performance. Once again, everyday shareholders are heterogeneous.
Private Equity in 401(k) Plans: More Smoke Than Fire
To my surprise, private equity fund executives convinced the Department of Labor to issue a letter, dated June 3, 2020, approving the use of private equity investments within 401(k) plans. If the private equity funds are selected judiciously and used appropriately, wrote the Department, plan sponsors will not “violate the fiduciary’s duties under section 403 and 404 of ERISA.”
How State and Local Taxes Affect Your Retirement Plan
With state and local budgets under pressure because of the coronavirus, taxes from these entities may become a front-burner issue if they’re not already.
Currency Hedging: Fine for Bonds, Not for Stocks
Should You Let Your Stocks Ride?
Naively, one would expect a portfolio that invests equally in each asset to make 4% annualized. That is indeed what would occur if the investments were riskless; if the assets were rebalanced at the end of each year; and if the portfolio carried no expenses.
Key Takeaways From Banks’ First-Quarter Earnings
Active Management’s Dilemma
How to do something different, without doing something bad? The first thing most novice investors learn is that they are best off buying index funds. That’s a fair starting point.
Rebalancing: A Practical Lesson
After Mixed Results, Apple Shares Expensive
We are maintaining our fair value estimate for narrow-moat Apple, and we recommend prospective investors wait for a wider margin of safety.
E-Trade Reports Good Quarter; Morgan Stanley Deal Nears
E-Trade (ETFC) reported fairly good first-quarter results as it moves closer to a likely merger with Morgan Stanley.
Earnings, Economics Will Drive Stock Returns From Here
Investors’ focus has shifted this week to earnings reports and economic metrics in order to decipher how quickly a recovery can evolve.
The Sell-Side Hates 3M. We Don’t.
We think the production of 3M’s respirators are a decent catalyst in the stock that the market fails to appreciate.
Five (Easy) Steps to Setting Up a 401(k)
Have you been meaning to enroll in your company’s 401(k) but keep putting it off? You’re not alone. Many people need a friendly nudge to start saving or increase their savings rate.
Congress to Help Retirees Cope With Market Downturn
Stimulus bill includes provision that suspends required minimum distributions for retirement accounts.Congress will soon pass a major relief bill to help workers, retirees, and businesses cope with the coronavirus-caused economic slowdown.
When Will Stocks Recover?
What’s Down With Treasury Yields?
To my surprise, the Treasury bond’s hypothetical result doesn’t trail that of every single mutual fund that has posted a 30-year return. Two gold-related funds, two Japanese equity specialists, and one perpetually misguided bear have fared worse.
Buying Opportunity in Pockets of Semiconductor Space
Semiconductor stocks have been hit hard in the wake of the novel coronavirus (COVID-19) epidemic that has severely disrupted both chip production and demand in China and neighboring countries.
Coronavirus Opportunity and Risk: Tech, Telecom, and Financials Stocks
We asked our sector directors to share what impact the coronavirus outbreak may have on their particular pockets of the market and which stocks look like good opportunities after the sell-off.
Market Overstates Coronavirus Impact on Energy Stocks
The S&P 500 Energy index has already lost more than 15% so far in 2020, following the coronavirus outbreak and the likely knock-on effect on crude demand growth. The market has overreacted, in our view, making energy stocks look cheap at current levels.
Morgan Stanley Undersells Synergies in E-Trade Deal
We believe that narrow-moat Morgan Stanley (MS) may be underselling its likely expense and revenue synergies in its announced merger with narrow-moat E-Trade (ETFC).
What Does the SEC’s Shareholder Resolution Proposal Mean for Investors?
We expect the rule to make it harder for investors to influence management. Shareholder resolutions play a central role in corporate governance.
Should the Government Mandate Retirement Planning?
Should the federal government mandate retirement planning? I will not answer that question, as it is for politicians, not investment researchers. However, I can sketch out the possibilities and show how defined-contribution schemes (including my NARP proposal) would fit into whichever framework the politicians adopt.
9 Winners Managing ESG Risk
As ESG considerations grow in importance, companies that can successfully adapt should benefit more than those that don’t. As such, our analysts are looking at their respective industries through the lens of ESG risk.
Schwab’s Results Show Downward Pressure on Revenue
Wide-moat-rated Charles Schwab (SCHW) reported fairly strong fourth-quarter and yearly results, but pressure in net interest income has already started. That said, 2020 earnings will be bolstered by Schwab’s pending acquisition of USAA’s brokerage business, as well as the recently announced merger with TD Ameritrade.
401(k)s Have Reached Their Expiration Date
That statement is, to an extent, a confession. The 401(k) structure is deeply unpopular with most investment writers, who regard it as a patchwork scheme that permits companies to foist their retirement-income risks onto employees.
AIG Has Ample Room to Improve
The years since the financial crisis have shown that American International Group (AIG) would have destroyed substantial value even if it had never written a single credit default swap, had noncore businesses it needed to shed, or had material issues in its core operations that it needed to address.
What Revised Life Expectancy Tables Mean for You and Your Clients
The IRS has proposed new actuarial tables for calculating required minimum distributions. Here’s the timeline and the key takeaways. Good news–the IRS is giving us all a little more life expectancy. The IRS has just issued revised life expectancy tables for use in calculating required minimum distributions.