Investors are feeling better after a mid-February turn around in the stock market. The gloom and doom atmosphere has given way to a somewhat more positive one, although many of the same global concerns remain.
And while volatility has subsided, it is still not uncommon to see +/- 1% daily market swings. But it is important to keep in mind that viewed in a historical context, and as illustrated in the table below, the levels of volatility we are seeing is far from unprecedented. In fact, six of the eight historic periods shown in the table were more volatile than the current one.
Enjoy the reprise, but don't become complacent. Make sure that you continue to provide timely updates, value-added materials and calm reassurance to clients.
S&P 500 Returns Grouped By Decade (1930 - 2015)
Return %
Annualized
Standard Deviation
1930 - 1939
-0.05
37.83
1940 - 1949
9.17
15.90
1950 - 1959
19.35
11.84
1960 - 1969
7.81
12.15
1970 - 1979
5.86
15.93
1980 - 1989
17.55
16.41
1990 - 1999
18.21
13.43
2000 -2009
-0.95
16.13
2010 - 2015
12.98
13.09
(Standard Deviation is a measurement of historical volatility.)
Robo-Advisors: Threat or Opportunity?
Over the past few years, billions of dollars have been invested through Robo-Advisors, a relatively new type of internet-based investment intermediary.
These automated systems offer investment management (and in some cases financial planning) at dramatically reduced fees by cutting out the middle man - the traditional broker/advisor.
Should the multi-trillion dollar advisory industry view Robos as a business threat? Or should advisors view their emergence as an opportunity?
We believe that rather than fight the Robo-Advisor trend, advisors will be better served by incorporating the philosophy into their business as they see appropriate, which could include:
Assisting with client segmentation
Attracting family members of clients
Attracting millenials
Click here to read our new White Paper on the subject.