INDIVIDUALS & FAMILIES

Podcast: May 2013 Federal Open Market Committee

A complete 180-degree turn is the sentiment of recent comments from both individuals within the FOMC and market pundits. Earlier in the year, there were discussions about the possibility of an earlier-than-expected halt to the current quantitative easing measures or, at a minimum, a scaling back of security purchase program that the FOMC is currently involved in. At this point, we maintain the view that the economy will continue to grow, but at the current tepid pace.

April 2013 Market and Performance Commentary

Japan hit the headlines by announcing dramatic quantitative-easing initiatives. Global equity and fixed-income markets both experienced gains, although equities maintained their edge. The appetite for risk continued within fixed income, favoring emerging-market debt and high-yield bonds.

Podcast: April 2013 Payroll Report

The labor market continues to face multiple headwinds as we move into the second quarter. Budget cuts, tax increases and general softening of economic data all have the potential to weigh down growth. In this environment, companies are likely to scale back their hiring initiatives until they get a better feel for the economic landscape. April’s labor data should provide reason to believe that the sector is growing. The problem is not growth; it’s the pace of growth.

Understanding the Anatomy of Giving

SEI Private Wealth Management's recent survey reveals that the vast majority of ultra-high-net-worth individuals believe their wealth creates an obligation for philanthropy, regardless of tax incentives.

Competing with Steve Jobs

When it comes to innovation, the wealth management industry lags behind transformative areas like consumer electronics and telecommunications. But how much innovation and what kind are important to wealthy investors? SEI asked them directly.

Coping Strategies

How do wealthy investors walk the tightrope between risk and reward?

The Generation Gap

SEI Private Wealth Management's survey of wealthy Gen-X investors raises a number of flags about effective succession planning and wealth transfer among ultra-high-net-worth investors.

“EBITDA, EBITDA, EBITDA…That’s all, Folks!”

Many business owners underestimate the importance of EBITDA¹ to their business and personal finances.

Gold—Burst Bubble, or Pause that Refreshes?

Less than two years removed from the most recent leg up of its long bull run, gold suffered a vicious two-day sell off. Debate is now raging over whether gold was a bubble due to burst or presents a long-term buying opportunity. Because gold plays a very limited role in our portfolios, we rarely comment on it. However, there are some interesting lessons to draw from the episode.

First Quarter 2013 Market and Performance Update

After an optimistic January, the mood in February and March was more downcast. Global equity markets held up well amidst the bad news in the quarter and outperformed the fixed income market. Risk appetite was apparent in the global fixed income markets and high yield bonds set the pace.

Podcast: March 2013 Payroll Report

A stronger employment picture is the foundation for a stronger economy, helping build the confidence of consumers who will then spend money and fuel the economy. Steady job-market growth has crept in, but is it taking hold? The March non-farm employment data release was a disappointment to the markets and a step backwards. April’s payroll number will now be that much more important for those of us looking to see if today’s number is a one-off to the softer side or the start of a new trend.

Economic Outlook: Investors Keep Calm and Carry On

Although Europe is a mess, the U.S. markets keep growing. Can the growth continue? While past performance is no guarantee of future results, there are some signs that the answer is “yes.”   

Podcast: February 2013 Payroll Podcast

Similar to watching the ball drop on New Year’s Eve, the countdown looking ahead to this month’s release of the employment picture began shortly after the release of January’s payroll data last month. We are all aware that the labor market is the backbone of economic growth. A stronger employment picture helps build confidence with consumers who will, in turn, continue to spend money and fuel the economy. Are current labor market forecasts too optimistic?  

The Crisis in Cyprus? The Real Fear is Pandora’s Box

The proposed bailout for the small European nation of Cyprus has caused a great deal of controversy. While Cyprus is not relevant to global economic performance, the failed proposal to raid bank accounts cracks the lid to Pandora’s box, raising questions about the potential for a eurozone-wide bank panic.

February 2013 Monthly Commentary

After an optimistic January, the mood in February was more downcast. Major central banks remained commodative in an effort to help stimulate growth. Global financial markets declined marginally. Risk appetite in fixed-income markets continued to expand, while demand for risk within equities was more muted.

Interest Rates: Creeping Higher

Interest rates and bond yields are at multi-generational lows and are expected to trend higher over the next few years. When they occur, SEI believes the rate hikes will be gradual, rather than sudden. Because our bond funds generally have shorter duration and higher yield characteristics than corresponding benchmarks, we believe they are relatively well-positioned for a moderately paced rise in interest rates.

"Sequestration"—Is the Sky About to Fall?

Some $85 billion worth of federal spending cuts are expected to take effect on March 1. While this looks like a large number, it amounts to only 2.4% of the federal budget and 0.5% of the U.S. economy. SEI sees no reason to adjust our investment strategies based on the potential impact of sequestration.

January 2013 Monthly Commentary

2012 ended on a positive note and this sentiment extended into and throughout January.  Major central banks remained accommodative in an effort to help stimulate growth. Global equities experienced respectable gains for the month as investor sentiment remained buoyed, while global bonds declined marginally. Risk appetite in the financial markets was high.

Strong Momentum and Elevated Sentiment

Stock markets started 2013 with a bang, which could bode well for full-year returns. We are cautious at the moment, as investor sentiment appears to be somewhat stretched. However, we believe that the underlying economic fundamentals validate the optimism reflected in stock prices.

Podcast: January 2013 Federal Open Market Committee

With the start of the year, market participants and investors alike created new goals and hopes for a prosperous 2013. After a volatile 2012, the hopes and expectations for FOMC activity in 2013 may turn out to be very similar in fashion. There is ongoing debate about when the Committee will end its asset purchase program. Unfortunately, there is not a simple answer to this question.

Investors held mixed expectations for the January FOMC meeting. To us, the bottom line is that everyone was looking for clarity around the Committee’s view on the economy, and the sustainability and outlook for additional purchases of Treasury and mortgage securities.

Video: Q4 2012 Global Economic Market Review

Looking back at 2012, the ongoing financial crisis in Europe and political strife in the U.S. dominated the headlines and set a negative tone. Fortunately, the results from the financial markets were significantly better than the sentiment. Financials, Consumer Discretionary, Industrials and Materials drove gains for the quarter while Utilities, Energy, IT and Telecommunications struggled. For the year, all sectors posted gains with Financials and Consumer Discretionary again setting the pace. Our outlook for 2013 remains balanced and modestly positive.

Fourth Quarter Market and Performance Update

Investor focus switched from the U.S. elections to the looming “fiscal cliff” and ongoing worries surrounding the fate of the eurozone. Major central banks once again remained accommodative in an effort to help stimulate growth. Global equities experienced respectable gains for the quarter as investor sentiment improved, while global bonds declined marginally. Equities outperformed fixed-income securities for the period as a whole.

Video: 2013 Economic Outlook

Jim Solloway, CFA, Managing Director of SEI's Portfolio Strategy Group, shares SEI's perspectives on the economy and our global economic outlook for 2013.

Podcast: December 2012 Payroll Report

The December payroll report provided another month of gains for the sector. Most investors and market participants were expecting an increase despite all of the uncertainty surrounding the fiscal cliff and the ensuing budget deal. At 155,000 jobs, the report fell right in line with the consensus average. The steady increase of jobs indicates the labor market may be gaining traction and pieces are lining up nicely for additional hiring in 2013, which should help the economy continue to grow.

The Fiscal Cliff: A Deal of Sorts

Despite the partial solution, we view the progress as a positive sign and (from an asset allocation perspective) plan to take a more aggressive, pro-cyclical stance in favor of equities as a result.

Markets Climb a Cliff of Worry

Despite all the political and economic uncertainties in the world, financial assets registered robust gains in 2012. We expect 2013 to be characterized by improved global economic growth, less financial-market volatility in Europe and some calming of the political waters in the U.S. and elsewhere. While this should be good news for equity markets, we strongly believe that the 30-year secular bull market in bonds is drawing to a close.

Fiscal Cliff Update—Things Are Getting Messy

For about a month, markets have seemed fairly confident that politicians would prevent the U.S. economy from tipping over the fiscal cliff. Risky assets have performed well during that time, while yields on perceived safe havens like U.S. Treasurys have been rising. The markets’ sanguine view may be changing, however, as the outlook in Washington has suddenly become quite unsettled.

November 2012 Market and Performance Update

Investor focus remained on the looming “fiscal cliff” in the U.S. and on ongoing worries surrounding the fate of the eurozone in November. Major central banks once again remained accommodative in an effort to help stimulate growth. 

Podcast: November 2012 Payroll Report

November’s nonfarm payroll report provided a glass-half-full scenario. Most investors and market participants were expecting only a slight increase in job creation due to the damage Superstorm Sandy did to the East Coast. The consensus estimate was low, at 85,000. The actual outcome painted a completely different picture, with a gain of 147,000 jobs that can be entirely attributed to the private sector. This improvement combined with those leaving the workforce lowered the unemployment rate to 7.7% from 7.9%.

Fiscal Cliff--We May Not Dive Off, But We're Not Climbing Either

A series of large spending cuts and tax increases, collectively referred to as the “fiscal cliff,” are set to kick in on January 1, 2013. If they do, they could tip the U.S. economy into recession. SEI believes U.S. legislators will find a way to avoid the worst-case scenario, possibly delaying automatic actions in order to give politicians more time to negotiate a compromise.

October 2012 Market and Performance Update

In October, focus remained on Europe, the upcoming U.S. elections and slowing growth in China. Leading central banks remained accommodative in October as part of continued efforts to help stimulate global growth. Global equities and bonds both experienced losses for the month, with fixed income performing marginally better, as investor sentiment waned. Within fixed income, emerging-market debt and high-yield bonds did best. [... More]

Video: Global Market Review

So far this year, despite an environment fraught with uncertainty, investors have had a generally positive experience. In this video presentation, Russ Ewing looks back at the factors that have impacted financial market so far in 2012 and discusses the issues that will impact investors through the remainder of the year. [... More]

Video: Presidential Election Impact and Post-Election Challenges

With the campaign season now in the rearview mirror, the U.S. economy turns its attention to some of the challenges that await. [... More]

Noise, News and Investment Strategy

The headline news is currently filled with an overwhelming volume of scary, negative stories. Investment professionals often refer to this as “noise.” Rather than providing insight or direction, the net effect is often to simply cause investors to want to take action. Understanding the news behind the noise is the key to making intelligent investment decisions that match your investment objectives regardless of the current environment. [... More]

U.S. Election Results: Similar Configuration, Same Challenges

After a long, gruelling and occasionally bitter campaign, Election Day in the U.S. has finally come and gone. President Obama won re-election, the Democratic Party added marginally to its majority in the Senate, and the Republican Party retained control of the House of Representatives. The immediate political challenges facing the country—most notably the “fiscal cliff,” a package of federal tax hikes and spending cuts scheduled to occur early in 2013—have been apparent for over a year. The divided government must address long-term budget concerns without derailing a multi-year but still-fragile economic recovery. How effectively the President and current or subsequent Congress deal with these challenges remains to be seen. [... More]

Q3 2012 Global Economic Market Review

The third quarter represented yet another twist in the roller coaster ride that investors have been on this year. The first quarter saw a broad-based rally as investors took advantage of historically low equity valuations and the promise of central bank stimulus. This investor confidence didn’t last long as concerns over European and Chinese economies prompted investors to take profits and look for safety in the second quarter. By the beginning of the third quarter, the markets had erased the year’s gains and were in the red. [... More]

Third Quarter 2012 Market and Performance Update

The financial markets were once again dominated by events in Europe and concerns about the global economic outlook, but central bank actions helped to bolster investor sentiment. Market activity and trading volumes slowed at mid-quarter due to the summer holidays, pushing volatility to lows unseen for several years. Global equities and bonds both experienced gains in the quarter, with equities pulling ahead as riskier assets returned to favor. Within fixed income, emerging market debt and high-yield bonds did best. [... More]

Economic Outlook: Central Banks to the Rescue

The Global Portfolio Strategies Group recently released its third-quarter 2012 Economic Outlook. Risky assets surged during the third quarter, building upon a rally that started in early June. Some of the strongest-performing markets had been among the worst performers for the better part of this year and last. Much has gone right in Europe over the past few months. Periphery countries have shown a greater willingness to work with the European Central Bank (ECB), which has stepped in as the lender of last resort in the eurozone. Much work remains to be done and an eventual Greek exit from the eurozone still seems likely in our view. [... More]

August 2012 Market and Performance Update

Summer holidays meant a quiet month as market activity and trading volumes slowed. Riskier assets came back into favor thanks to stronger support from central banks. [... More]

July 2012 Market Update

A degree of calm returned to the financial markets in July, but disappointing economic data ensured a subdued mood. [... More]

Podcast: July 2012 Payroll Report

July’s labor data was not a game changer in our minds, but it was a step in the right direction. For a second month in a row, market participants were very optimistic leading up to the release of the report, as jobless claims had continued to point to a stabilizing labor market. The July ADP report, released two days earlier, sparked optimism with a strong print of 163,000 private sector jobs following June’s increase of 172,000. Overall, the labor market is stabilizing and in some cases showing signs of modest growth. However, stronger sustained growth is what is needed to shore up consumer confidence and reduce the unemployment rate. [... More]

Second Quarter 2012 Market and Performance Update

Optimism turned sour in April and reached panic levels in May when concerns about economic and political problems in the eurozone resurfaced with a vengeance. Events surrounding the French and Greek elections led to increased uncertainty, as did the deepening eurozone debt crisis when troubles in Spain and Italy hit the headlines. Economic data released during this time painted an uncertain picture and seemed to indicate a pause in global economic growth. [... More]

Big Divergences, Still Looking for a Catalyst

May has been a challenging month for investors, with government debt fears, bank stresses and political upheaval in Europe causing renewed pessimism and another broad flight to safety. As a result, relative valuations have become quite stretched between U.S. equities and stock markets in Europe and emerging markets. While some indicators are inspiring a bit of optimism, we are maintaining our current positioning as we look out for potential catalysts. [... More]

First Quarter 2012 Market and Performance Update

Investor confidence received a boost from continued central bank support in the U.S. and eurozone. Equity markets gained, with risky assets among the strongest performers. Bond market performance was held back by waning demand for government debt. [... More]

Podcast: March 2012 Payroll Report

The March nonfarm payroll number came in at 120,000 jobs created, which was well below the consensus expectation of 205,000. This was the first report for the year in which the data was below the estimate. And was also the lowest reading since October 2011. The bottom line: U.S. hiring continues to increase, albeit at a slower pace. Confidence within the labor market remains solid, but will start to come into question if data continues to show signs of softening. [... More]

Podcast: March 2012 Macro Summary View

March went out like a lamb, but markets roared all the way through, ending the month and quarter strongly. The equity market had its best first quarter since 1998, as the S&P 500 returned 12.56%. Whether it is sterilized quantitative easing or Operation Twist, there is no denying that the Federal Reserve, or Fed, has been engaged. [... More]

Video: Outlook on Inflation 2012

Inflation is becoming a growing concern for investors. In the U.S. the Consumer Price Index (CPI) has fluctuated in a wide range over the past decade, and currently is running at a rate of 2.3%, slightly above the announced inflation target of the Federal Reserve. The consensus view of economists calls for a rapid moderation in headline CPI inflation. In SEI’s opinion, this forecast is optimistic. [... More]

Making Sense Out of Conflicting Viewpoints

In an industry in which people are paid to make investment decisions based on their personal points of view, everybody has an opinion. Determining the sources of varying outlooks can help you provide clients with the perspective that’s most relevant to them and their portfolios. [... More]

Is Iran About to Receive a SWIFT Kick?

While many analysts are concerned about the possibility of military conflict between Iran and the West over the former’s nuclear ambitions, economic and financial sanctions against Iran continue to escalate. SEI is monitoring the situation from a market-risk perspective, as increased risk might influence active asset allocation and portfolio construction decisions. [... More]

Video: January 2012 Macro Summary View

2012 commenced with expectations of stronger economic growth. January’s economic calendar showed that momentum was slowing despite pockets of strength. The first read of fourth-quarter gross domestic product showed an increase of 2.8%. [... More]

Commentary: The Five Stages of Greece

Consistent with the Five Stages of Grief model, we believe that the ‘fifth stage of Greece’ will involve acceptance, by the troika and Greece and that the latter must depart from the single-currency union. We do not believe that departures by Greece or other periphery nations will lead to the collapse of the eurozone, however. [... More]

Podcast: January 2012 Payroll Report

January’s non-farm payroll number came in above expectations at 243,000, proving to be a very strong report for the start of the year after consensus estimates called for the addition of 140,000 jobs. Companies are gaining confidence, as reflected in recent labor data, and the encouraging news is being driven by overall growth within most sectors. [... More]

The Generation Gap

Centered around the findings of the SEI Family Wealth and Succession Survey conducted in June 2011, The Generation Gap elucidates the issues many wealthy families face when mapping out their succession plans. Affluent family heads face a multitude of challenges inherent in effectively passing wealth to the next generation. Knowing how other families handle these issues can help you make better decisions when the time comes to decide your own legacy plan. [... More]

The "Formula Clause" Pitfall

Many lawyers use a "formula clause" within their clients' trusts, which designates inheritances via fractions or percentages, not fixed dollar amounts. With the increase of the estate tax exemption to $5 million and new portability feature in the 2010 Tax Relief Act, use of the forumla clause may result in inadvertently disinheriting surviving beneficiaries. A simple amendment can be used to correct the defect. [... More]

A Brief History of Market Turbulence

Economic and financial crises have been a regular feature of monetary economies throughout history. While no two have been exactly alike, they tend to share some common characteristics. Read about some key lessons that investors can take away from such comparisons. [... More]

Five Pieces of Advice About Advice

Advice can come from many sources.  These sources often have personal biases that can either strengthen or limit the benefits of this advice.  Preference, proximity and proficiency all play a role in how professionals dole out advice, not to mention compensation.  All of these and other factors should be examined when considering an expert opinion. [... More]

Implications of a U.S. Debt Ceiling Agreement

An agreement to raise the debt ceiling and avoid a default is a welcome development. However, this simply (1) averts an immediate crisis and (2) creates the time and space necessary for Congress to (hopefully) make some rather difficult decisions regarding federal spending and revenue. [... More]

U.S. Credit Downgrade: How Would It Impact Fixed Income Investors?

In recent weeks, major credit rating agencies have expressed renewed concern over the financial outlook for the U.S., perhaps eventually losing its AAA rating. What are the implications for investors? [... More]

U.S. Equities: Few Repeat Winners/Losers When Inflation Rises

In spite of media-stoked fears of rising inflation, SEI does not view inflation as a near-term threat. For U.S. equities, recent periods of rising inflation have not resulted in clear-cut winners and losers. [... More]

It's Your Money: Why Give Away More Than You Have To?

When ignored, taxes can diminish portfolio returns significantly over time. A number of tools for investors can help alleviate this burden. Learn more about them, and about current key tax policy trends, from David Zierath of the SEI Wealth Network. [... More]

Quarterly Economic Outlook: Moving Ahead Despite the Challenges

There is no denying that the first quarter was a harrowing one. Yet, with the main exceptions of Japanese and emerging-market equities, financial markets have managed through the bad news. This impressive resiliency can be attributed to the underlying strength of the global economy. [... More]

What's Your Instinct? Head Vs. Heart

Do you invest with your head or your heart? That is the question. Many investors believe they are completely rational when it comes to making financial decisions, but when the heat is on they tend to revert back to their most primitive instincts. This article explores the necessity of both your logical and emotional sides when making important investment decisions. [... More]

Video: Oil, Water, Food and Money - An Economic View of Political Tensions in the Middle East

In February, political turmoil in Egypt led to the temporary closure of that country's stock market and banking system. Unrest in other countries in the region has raised questions about the implications for financial markets. This video explores the potential impact of this political tension on the supply of oil and food, as well as the impact on the global financial system. [... More]

Japan: Too Early to Tell

Japan, the third-largest economy in the world, has endured earthquakes, a tsunami and multiple nuclear reactor failures. The long-term downstream consequences will not be clear for quite some time. Gross domestic product (GDP) will be negatively impacted in the short term, but rebuilding should help economic activity rebound. [... More]

It’s All About the Oil: A View of Events in Libya

The ousting of Tunisia’s President Zine al-Abidine Ben Ali on January 14 was the first domino to fall in a series of uprisings in Africa and the Middle East. The protests were largely a sideshow for the financial markets…until Libya exploded. [... More]

Oil, Water, Food and Money: A Macro View of Political Tensions

Ongoing political turmoil in Egypt led to the temporary closure of that country’s stock market and banking system. The market is expected to remain closed until the week of February 13, while banks reopened on Sunday, February 6. A run on Egypt’s currency or debt would cause considerable harm to its economy and financial system. [... More]

Comparing Recessions: U.S. "Great Recession" vs. Japanese "Lost Decade"

A spate of economic data raised concerns that the U.S. economy is facing a “lost decade” like the one Japan experienced from 1991-2001. While we see similarities, a closer look reveals significant differences which we believe ultimately render them uncomparable. [... More]

Macro-Dominated Markets and Spiking Correlations: Current Challenges and Future Opportunities

A recent article in The Wall Street Journal focuses on how macroeconomic themes are currently a driving force in U.S. financial markets, much to the frustration of stock pickers. [... More]

Retirement Plans: Are You Ensuring the Best Tax Result for Your Beneficiaries?

With proper planning, retirement assets can grow on a tax deferred basis. Are you sure your beneficiaries aren't missing out on significant tax deferral opportunities? [... More]

Investment Update: Why U.S. Investors Should Care About the Euro

Why should U.S. investors care about the sovereign debt troubles of Greece and other European countries? These issues can have a significant impact on domestic investments. [... More]

Outlook on Global Sovereign Debt

Since global markets began their downward spiral, the coordinated efforts of central banks and governments have helped avoid systemic collapse, and the global economy has been on the road to recovery. However, fears about sovereign debt have escalated. [... More]

The Effects of Recession on U.S. State Governments

Individual states are expected to remain resilient but under considerable stress as the U.S. economy continues to recover from the national recession that began in December 2007. [... More]

Should We Hold a Family Meeting?

Are family meetings worth the effort? We believe they are an effective way to share your goals for self, family and community—the groundwork for an enduring family legacy. [... More]

Estate Tax Repeal. 2010: What You Need to Know about Estate and GST Taxes

Beginning January 1, 2010, estate and generation skipping transfer (GST) taxes are repealed for one year. Understand the changes and review your current estate plan.
[... More]

Vacation is Over. Active Tax Management is Back in School

As we have been repeatedly reminded with regards to our investment portfolios, “It’s not what you make that counts, it’s what you keep.” With that in mind, we thought it would be constructive to remind everyone about our efforts to increase “what you keep.”
[... More]

Commentary: An Assessment of President Obama’s Proposed Financial Reform Legislation

While the plan offers increased supervision for non-banks, early identification of firms whose collapse would cause systemic issues, and enhanced consumer protection, there are many aspects that have been met with skepticism. [... More]

Stimulus Package: An Overview and Outlook

At the present time, we see nothing in the stimulus package that would lead to changes in our asset allocation recommendations. Active managers can be expected to find opportunities in this environment. [... More]