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Insights



Tesla’s Charge Reveals Weak Points of Indexing

Index additions and deletions are typically a routine affair, but the recent announcement by S&P that Tesla would be added to the widely tracked S&P 500 Index stirred up quite a lot of attention. No surprise, given that Tesla is the largest company to ever join the index and, at the time of its addition on December 18, 2020, became the sixth-largest company in the S&P 500. On news of the announcement on November 16, Tesla’s stock price jumped 8.2%
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A Regression to Long-Term Means?

“A Man’s inability to see the power of regression to the mean leaves him blind to the nature of the world around him.” Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds.   Reviewing historical annual long-term equity premiums and returns, we can conclude the following: US Small companies outperform US Large Companies by 2.02% International Small companies outperform International Large companies by 4.91% US Value companies outperform US Growth companies by 3.18% International Value companies outperform International
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Give the Gift of Long-Term Happiness

We’ve all seen the pictures: Kids in their pajamas sitting amongst dozens of presents stacked high around them, massive grins on their faces as they get ready to rip through the wrapping paper like the Tasmanian Devil. As parents, we think, “Wow, that is one happy kid. He’s the center of attention, and outside of that itchy sweater from grandma, he got everything on his holiday wish list! What a moment! This kid will remember this day for the rest
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Proposed “SECURE Act 2.0” May Boost Retirement Savings

The House of Representatives introduced a new bipartisan bill on October 27 called Securing a Strong Retirement Act of 2020 (SSRA). With a majority of Americans falling behind with their savings, this bill would nudge individuals in the right direction. Michael Townsend, Vice President, Legislative and Regulatory Affairs, says, “It’s not likely this will be passed into law this year, but the bill has backing from key leaders on both sides of the aisle, so it stands a very good
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Refocus Post-Election Stress to Your Financial Plan

The 2020 election is moving closer to conclusion, and like many investors, you may have mixed emotions about the future. If you’re looking for clarity and guidance, here are key points for refocusing that post-election stress and anxiety back to your financial plan. Avoid acting hastily based on election results. Equity markets moved higher in the week following the election. However, experts’ consistent point of view is to avoid reacting to immediate news related to the election. Avoid assuming anyone
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2020 Year-End Tax Planning

Clearly, 2020 has been a year unlike any other. The coronavirus pandemic and its impact on health and the economy has forced a lot of people to reassess their priorities and the financial life decisions tied to them. For some that means establishing or replenishing an emergency fund. For others it may mean a closer review of their estate plan. For many, though, the end of 2020 presents an opportunity to consider what may be done from an income tax
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Optical Illusions in Investing

Do you remember “The Dress”? From way back in 2015? Sure, hundreds of internet sensations memorable for one reason or another have gone viral over the years, but this one made a splash by any standard. Is the dress white and gold? Or is it really black and blue? Debate raged and The Dress forever earned a place in pop culture. It seems, though, that everyone at the time simply forgot about optical illusions and the tricks our brains can
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Why Investors Might Think Twice About Chasing the Biggest Stocks

As companies grow to become some of the largest firms trading on the US stock market, the returns that push them there can be impressive. But not long after joining the Top 10 largest by market cap, these stocks, on average, lagged the market. • From 1927 to 2019, the average annualized return for these stocks over the three years prior to joining the Top 10 was nearly 25% higher than the market. In the three years after, the edge
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It’s (not) a small world after all!

Disneyland has a famous ride, accompanied by an identically named song, called “It’s a Small World (After All),” that was developed to celebrate peace and togetherness. While the ride is intended to remind us of how connected we all are, our beliefs about investing may not be as unified or accepting of differences as the ride and song celebrate. To be sure, some investors invest in a literal small world. They focus on investing in their local stock market and
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Tune Out the Noise

There’s a reason that investors tend to only hear about “looming” market doom or “imminent” market growth. While many news outlets have an incentive to draw viewer attention with wildly bullish or bearish predictions, these sensationalized views may be a distraction to a sound investment approach. When tempted to make a radical change to your investment portfolio based on these headlines, it is important to recall some basic fundamentals to keep your plan on track. Tune out the noise: “Markets
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