Inside Information

The Financial Planning Association's annual convention featured one excellent keynote speaker and a pretty good investment/retirement distribution track. [Read more »] 

What does all that economic jargon really mean? [Read more »] 

With the U.S. debt downgrade and the sovereign debt crisis in Europe, is there a risk-free rate of return left anywhere in the markets? What does that mean for pension funds and anybody whose process relies on CAPM and the efficient frontier? [Read more »] 

Is it time to take a second look at long-term care insurance? [Read more »] 

The blockbuster article in this issue is the reanalysis of the small cap premium--one of the two exceptions to CAPM that Gene Fama and Ken French reported in their seminal article. This article suggests that on a risk-adjusted basis, small caps have actually trailed large caps over virtually all longer time periods, including those studied by Fama and French.

The conclusions will be reported in a peer-reviewed journal, and meanwhile debated endlessly across the profession. Read the article now and you'll have a head start on the debate.

Meanwhile, you can always get something important out of Mitch Anthony's column, including a reminder here that work may be necessary for emotional, social and intellectual stimulation; that quality of life in retirement may require people to stay involved and active in some form of workplace. Joel Bruckenstein evaluates a new way to buy the Microsoft Office suite, and there's a nice writeup of all the actively-managed ETFs on the market. [Read more »] 

David Loeper and his companies have been granted two patents on some processes which might look an awful lot like what you do as a matter of professional routine. [Read more »] 

There were an unusually high number of high-relevancy articles in this issue of Financial Planning magazine, which will be distributed on the floor of the FPA Convention in San Diego. I liked Eleanor Blayney's suggestion at the end of the publication, that we assign a financial planner to take the Congressional leaders on the deficit reduction debate through the six-step planning process and talk about the long-term perspective. There are profiles of Roger Gibson and Julie Littlechild, and a good article from Brad Klontz on why clients sometimes fail to act on your best advice.

And the article on LTC insurance, including some planning tips on how to evaluate whether the investment is worth the cost, is excellent, particularly for advisors who are uncertain how to plan for long-term care issues. [Read more »] 

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I hope Dan Moisand's article here calls additional attention to the Wade Pfau article on calculating a client's "safe savings rate" for retirement. And I hope people pay attention to Roy Diliberto's advice on how to help clients identify their true goals, in order to allow you to give better, more customized advice.

Meanwhile, Somnath Basu--writing before the Downgrade Panic--suggests that the world economy may be heading for a double dip recession, and offers some signposts to watch out for. [Read more »]