INSERT INTO `wp_posts` VALUES (4896,3,'2020-12-24 18:34:58','2020-12-24 18:34:58','<!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p><cite><em>Business Insider – 7/30/17</em></cite></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 18:34:58','2020-12-24 18:34:58','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4899,3,'2020-12-24 18:41:42','2020-12-24 18:41:42','<!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:list -->\n<ul><li><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 18:41:42','2020-12-24 18:41:42','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4905,3,'2020-12-24 19:19:09','2020-12-24 19:19:09','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":319,\"height\":155,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"319\" height=\"155\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 19:19:09','2020-12-24 19:19:09','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4906,3,'2020-12-24 19:19:35','2020-12-24 19:19:35','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":356,\"height\":173,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"356\" height=\"173\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 19:19:35','2020-12-24 19:19:35','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4908,3,'2020-12-24 19:24:31','2020-12-24 19:24:31','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":391,\"height\":191,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"391\" height=\"191\"/><figcaption><strong>Morgan Stanley</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"width\":229,\"height\":194,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\" width=\"229\" height=\"194\"/><figcaption><strong>Wells Fargo</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"width\":357,\"height\":262,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\" width=\"357\" height=\"262\"/><figcaption><strong>UBS</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/><figcaption><strong>Goldman Sachs</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 19:24:31','2020-12-24 19:24:31','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4909,3,'2020-12-24 19:25:17','2020-12-24 19:25:17','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":480,\"height\":235,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"480\" height=\"235\"/><figcaption><strong>Morgan Stanley</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"width\":229,\"height\":194,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\" width=\"229\" height=\"194\"/><figcaption><strong>Wells Fargo</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"width\":357,\"height\":262,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\" width=\"357\" height=\"262\"/><figcaption><strong>UBS</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/><figcaption><strong>Goldman Sachs</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 19:25:17','2020-12-24 19:25:17','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4911,3,'2020-12-24 19:30:13','2020-12-24 19:30:13','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":577,\"height\":282,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"577\" height=\"282\"/><figcaption><strong>Morgan Stanley</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"width\":229,\"height\":194,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\" width=\"229\" height=\"194\"/><figcaption><strong>Wells Fargo</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"width\":357,\"height\":262,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\" width=\"357\" height=\"262\"/><figcaption><strong>UBS</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/><figcaption><strong>Goldman Sachs</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 19:30:13','2020-12-24 19:30:13','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4913,3,'2020-12-24 19:30:47','2020-12-24 19:30:47','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":650,\"height\":318,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"650\" height=\"318\"/><figcaption><strong>Morgan Stanley</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"width\":229,\"height\":194,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\" width=\"229\" height=\"194\"/><figcaption><strong>Wells Fargo</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"width\":357,\"height\":262,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\" width=\"357\" height=\"262\"/><figcaption><strong>UBS</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/><figcaption><strong>Goldman Sachs</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 19:30:47','2020-12-24 19:30:47','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4916,3,'2020-12-24 20:06:59','2020-12-24 20:06:59','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":650,\"height\":318,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"650\" height=\"318\"/><figcaption><strong>Morgan Stanley</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"width\":229,\"height\":194,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\" width=\"229\" height=\"194\"/><figcaption><strong>Wells Fargo</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"width\":357,\"height\":262,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\" width=\"357\" height=\"262\"/><figcaption><strong>UBS</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/><figcaption><strong>Goldman Sachs</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>So, where’s the risk?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>With SBLs, as with all financial obligations, it’s vitally important to read the fine print or risks section before committing. Careful attention to this step reveals that brokerages and banks get all the benefits of secured, full-recourse loans, while customers take all the risk. This may seem acceptable in a healthy bull market, but it can be catastrophic to the pledged portfolio in a downturn.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The following are some of the risks that investors may face if they borrow against an investment account. It’s these risks that prompted the SEC and FINRA to issue a special Investor Alert in 2015 regarding this type of lending:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>If the value of the securities declines below a minimum level, you may be subject to a collateral “maintenance call” with little or no advanced warning, giving you minimal time to pay the loan or deposit more cash or securities in the account. Note that if this occurs, there are no extensions, and a broker can change its collateral maintenance requirement at any time without notifying you.</li><li>If you are unable to meet a maintenance call, the broker can liquidate part, or all, of your portfolio holdings at their discretion. You do not pick the stocks to sell. In a bear market, that could mean selling core holdings at a market bottom or alternatively realizing significant tax gains on long-held securities.</li><li>In a major downturn, you could be forced to forfeit all your pledged assets – in this case, the stocks, funds, and bonds in your portfolio. This is a major drawback to asset-backed loans…</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p><strong>Why Goldman Sachs Seized a Client’s 217-Foot Yacht</strong> <em>- Wall Street Journal, 8/10/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>In the worst-case scenario, you might lose more funds than are held in the collateral account, and as a full-recourse loan, you would be liable for any deficiency.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>For SBLOCs, the interest rate on your loan is generally a floating rate that can change daily. With interest rates rising, the cost of your SBLOC could increase significantly.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The proliferation of SBLs and SBLOCs obviously increases the risks in this late-stage bull market. While history shows that excessive debt accumulation does not trigger a stock market peak, it can accelerate and intensify losses when the leverage starts to unwind in a bear market. Today’s levels of these securities-backed loans are small relative to overall consumer and business debt, but they can be dangerous. Like subprime mortgage loans 10 years ago, if trouble appears in terms of mass collateral maintenance calls, it could be just the tip of the iceberg.</p>\n<!-- /wp:paragraph -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 20:06:59','2020-12-24 20:06:59','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4918,3,'2020-12-24 20:08:59','2020-12-24 20:08:59','<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph {\"align\":\"left\"} -->\n<p class=\"has-text-align-left\"><strong><em>Excerpt from InvesTech Research – September 15, 2017</em></strong></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>\n<!-- /wp:quote -->\n\n<!-- wp:paragraph -->\n<p><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"right\"} -->\n<p class=\"has-text-align-right\"><em>Business Insider – 7/30/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4898,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg\" alt=\"\" class=\"wp-image-4898\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Borrowing With Stock Soars as Market Rises</strong>  – <em>Wall Street Journal, 7/28/17</em></li><li><strong>Fidelity taps Goldman Sachs to expand lending services through RIAs</strong><em> – Investment News, 7/27/17</em></li><li><strong>Goldman Sachs is launching a digital platform for the rich to borrow as much as $25 million</strong> <em>– Reuters, 7/27/17</em></li><li><strong>Wall Street Sharks Entice Customers With Securities-Backed Loans </strong><em>– Seeking Alpha, 8/13/17</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>SBLs are often referred to as “shadow margin” because they’re not tracked in the margin debt figures, nor are they tracked by either the SEC or the brokerage regulator FINRA. Nobody knows how extensive such loans are, but based on anecdotal evidence they total at least $100 billion and we believe the figure could be much larger.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4901,\"width\":650,\"height\":318,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/MorganStanley-1024x502.png\" alt=\"\" class=\"wp-image-4901\" width=\"650\" height=\"318\"/><figcaption><strong>Morgan Stanley</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>According to a July 2017 Wall Street Journal article, Bank of America’s wealth unit had $40 billion in outstanding securities-backed loans at the end of 2016, up 140% from 2010. Morgan Stanley had $30 billion in these loans, more than double the amount in 2013. And, not to be left behind, Goldman Sachs is teaming up with Fidelity and other brokerages to broaden the availability of credit via its new digital lending program, “GS Select.”</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>What are securities-backed loans (SBLs), and why are they popular?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:paragraph -->\n<p>In simple terms, SBLs are loans that are marketed to investors as an easy and inexpensive way to access extra cash by borrowing against the securities in one’s investment portfolio without having to liquidate those holdings. Funds can be used for any purpose except buying more stock or repaying a margin loan. For instance, these loans might be used for buying real estate, investing in a business, funding education, or for personal use like taking a trip or paying for a wedding.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Fixed loans can run the gamut from $25,000 to $25 million or more, depending on the lender and the amount of collateral. A typical SBL agreement permits an investor to borrow from 50% to 95% of the value of the assets in his or her non-retirement investment account, based on the size of the portfolio and the types and mix of securities held. These lending arrangements can be set up as a fixed loan, but more often they’re established as a revolving SBL line of credit (SBLOC). It’s not uncommon for a firm to require that account assets have a market value of at least $100,000 to qualify for an SBLOC.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4902,\"width\":229,\"height\":194,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/WellsFargo.png\" alt=\"\" class=\"wp-image-4902\" width=\"229\" height=\"194\"/><figcaption><strong>Wells Fargo</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>The sales pitch is irresistible!</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Looking at the promotional materials shown in this report from broker websites touting SBLs, who wouldn’t want to avail themselves of this offering? According to the ads, you’ve worked hard to grow your investments over the years; now you can capitalize on those assets to finance your dreams without drawing down your portfolio.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:list -->\n<ul><li>With an SBLOC, the cash is readily available (up to the credit limits) any time you need it.</li><li>Other than securities related transactions, there are no restrictions on how you use the loan.</li><li>An SBLOC lets you keep your investment account intact, allowing it to continue to grow.</li><li>By borrowing to meet your cash needs, you can avoid selling securities and triggering capital gains taxes.</li><li>Because SBLs are backed by portfolio assets, interest rates can be much lower than traditional loans.</li><li>Once an SBLOC is in place, it can be used repeatedly and you’re only required to make monthly interest payments – there is no maturity date.</li><li>There are usually no fees to establish the loan or credit line and funds are available quickly. Goldman Sachs’ digital platform promotes a 24-hour turnaround.</li><li>Typically, no personal financial statements, tax returns, or other documents are required.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4903,\"width\":357,\"height\":262,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/UBS-1024x751.png\" alt=\"\" class=\"wp-image-4903\" width=\"357\" height=\"262\"/><figcaption><strong>UBS</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4904,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/GoldmanSachs-1024x698.png\" alt=\"\" class=\"wp-image-4904\"/><figcaption><strong>Goldman Sachs</strong></figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3} -->\n<h3>What’s in it for the brokers?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SBLs and lines of credit have become lucrative new sources of income for brokerages, helping to replace revenue lost due to recent cuts in commission rates. In addition, brokers retain portfolio assets, along with their associated fees, as customers can access cash without making withdrawals. In some cases, establishing these loans may factor into a broker’s compensation, and marketing these credit options creates “sticky” clients as it’s hard to transfer assets to another broker with a securities-backed loan outstanding. Even if a client doesn’t use the line of credit immediately, the longer it’s in place, the more likely it is that he or she will eventually tap it.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>So, where’s the risk?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>With SBLs, as with all financial obligations, it’s vitally important to read the fine print or risks section before committing. Careful attention to this step reveals that brokerages and banks get all the benefits of secured, full-recourse loans, while customers take all the risk. This may seem acceptable in a healthy bull market, but it can be catastrophic to the pledged portfolio in a downturn.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The following are some of the risks that investors may face if they borrow against an investment account. It’s these risks that prompted the SEC and FINRA to issue a special Investor Alert in 2015 regarding this type of lending:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>If the value of the securities declines below a minimum level, you may be subject to a collateral “maintenance call” with little or no advanced warning, giving you minimal time to pay the loan or deposit more cash or securities in the account. Note that if this occurs, there are no extensions, and a broker can change its collateral maintenance requirement at any time without notifying you.</li><li>If you are unable to meet a maintenance call, the broker can liquidate part, or all, of your portfolio holdings at their discretion. You do not pick the stocks to sell. In a bear market, that could mean selling core holdings at a market bottom or alternatively realizing significant tax gains on long-held securities.</li><li>In a major downturn, you could be forced to forfeit all your pledged assets – in this case, the stocks, funds, and bonds in your portfolio. This is a major drawback to asset-backed loans…</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\"><strong>Why Goldman Sachs Seized a Client’s 217-Foot Yacht</strong> <em>- Wall Street Journal, 8/10/17</em></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>In the worst-case scenario, you might lose more funds than are held in the collateral account, and as a full-recourse loan, you would be liable for any deficiency.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li>For SBLOCs, the interest rate on your loan is generally a floating rate that can change daily. With interest rates rising, the cost of your SBLOC could increase significantly.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The proliferation of SBLs and SBLOCs obviously increases the risks in this late-stage bull market. While history shows that excessive debt accumulation does not trigger a stock market peak, it can accelerate and intensify losses when the leverage starts to unwind in a bear market. Today’s levels of these securities-backed loans are small relative to overall consumer and business debt, but they can be dangerous. Like subprime mortgage loans 10 years ago, if trouble appears in terms of mass collateral maintenance calls, it could be just the tip of the iceberg.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->','SBLs','','inherit','closed','closed','','2472-revision-v1','','','2020-12-24 20:08:59','2020-12-24 20:08:59','',2472,'https://ns2020-investech.investech.com/2472-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (16992,2,'2023-03-01 11:50:23','2023-03-01 17:50:23','<!-- wp:group {\"align\":\"wide\",\"className\":\"wall-to-wall neutral-warm\"} -->\n<div class=\"wp-block-group alignwide wall-to-wall neutral-warm\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"10%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:heading {\"textAlign\":\"center\",\"textColor\":\"bright-green\"} -->\n<h2 class=\"has-text-align-center has-bright-green-color has-text-color\">New to InvesTech Research - <em>Economic Trends</em></h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\">Stay up to date with the latest Economic Trends! This new feature tracks important indicators you should be watching. Economic Trends are available from our menu or by clicking the Economic Trends button below.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\"><strong>This new service is FREE so you are welcome to share it with friends and family!</strong></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:buttons -->\n<div class=\"wp-block-buttons\"><!-- wp:button {\"align\":\"center\"} -->\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link wp-element-button\" href=\"/economic-trends\">Economic Trends</a></div>\n<!-- /wp:button --></div>\n<!-- /wp:buttons --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"10%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:group -->\n\n<!-- wp:group {\"className\":\"wall-to-wall pad-2-0\"} -->\n<div class=\"wp-block-group wall-to-wall pad-2-0\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:image {\"id\":14420,\"width\":268,\"height\":80,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-full is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/03/BARRONS-logo.png\" alt=\"\" class=\"wp-image-14420\" width=\"268\" height=\"80\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3,\"textColor\":\"maroon\"} -->\n<h3 class=\"has-maroon-color has-text-color\">Read what InvesTech &amp; Jim Stack were saying BEFORE the market peaked and started falling…</h3>\n<!-- /wp:heading -->\n\n<!-- wp:heading -->\n<h2><strong>“Preparing for a Bear Market”</strong></h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Dec. 17, 2021 –&nbsp;<em>Barron’s&nbsp;</em>interviewed Jim Stack, president of InvesTech Research, in a feature article about the best strategy and portfolio positioning for today’s high-risk market.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Read the&nbsp;<a href=\"https://webreprints.djreprints.com/58891.pdf\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>full article</strong></a>&nbsp;to see what steps investors should be taking to navigate this market safely.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:group -->\n\n<!-- wp:group {\"align\":\"wide\",\"className\":\"wall-to-wall neutral-warm pad-2-0\"} -->\n<div class=\"wp-block-group alignwide wall-to-wall neutral-warm pad-2-0\"><!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":14855,\"mediaLink\":\"https://ns2020-investech.investech.com/home/v22i02thumb/\",\"mediaType\":\"image\",\"mediaWidth\":26} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 26%\"><div class=\"wp-block-media-text__content\"><!-- wp:heading {\"textColor\":\"med-grey\"} -->\n<h2 class=\"has-med-grey-color has-text-color\">Don’t miss this essential issue as the Fed heads toward a monetary showdown…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3><em>On Collision Course with a Bear Market</em></h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Before volatility returned with a vengeance, InvesTech published its February issue, where we laid out the path of a (probable) bear market. With warning flags dropping into place, lofty levels of speculation and overvaluation, and increasingly entrenched inflation pressures, this has begun to resemble one of the most significant bull market tops in history. Download this <em>free </em>issue to learn how ultra-accommodative monetary policies from the Fed have led to a speculative frenzy, the similarities of this market to the unwinding of the Tech Bubble, the potential downside risk ahead, and how to safely navigate this dangerous environment.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:uagb/marketing-button {\"block_id\":\"eebf05c8\",\"classMigrate\":true,\"link\":\"/free-important-issue/\",\"linkTarget\":true,\"backgroundColor\":\"#a60d0d\",\"backgroundHoverColor\":\"#f2cb05\",\"titleColor\":\"#F5F4F0\",\"titleHoverColor\":\"#00467F\",\"iconColor\":\"#F5F4F0\",\"iconHoverColor\":\"#00467F\",\"prefixColor\":\"#F5F4F0\",\"prefixHoverColor\":\"#00467F\",\"btnBorderTopWidth\":1,\"btnBorderLeftWidth\":1,\"btnBorderRightWidth\":1,\"btnBorderBottomWidth\":1,\"btnBorderStyle\":\"solid\",\"btnBorderColor\":\"#333\",\"className\":\"uagb-marketing-btn__outer-wrap uagb-marketing-btn__icon-before\"} -->\n<div class=\"wp-block-uagb-marketing-button uagb-marketing-btn__align-center uagb-marketing-btn__align-text-center uagb-marketing-btn__icon-after uagb-block-eebf05c8 wp-block-button uagb-marketing-btn__outer-wrap uagb-marketing-btn__icon-before\"><a href=\"/free-important-issue/\" class=\"uagb-marketing-btn__link wp-block-button__link\" target=\"_blank\" rel=\"noopener noreferrer\"><span class=\"uagb-marketing-btn__title\">Free Important Issue</span><svg xmlns=\"https://www.w3.org/2000/svg\" viewBox=\"0 0 512 512\"><path d=\"M384 320c-17.67 0-32 14.33-32 32v96H64V160h96c17.67 0 32-14.32 32-32s-14.33-32-32-32L64 96c-35.35 0-64 28.65-64 64V448c0 35.34 28.65 64 64 64h288c35.35 0 64-28.66 64-64v-96C416 334.3 401.7 320 384 320zM488 0H352c-12.94 0-24.62 7.797-29.56 19.75c-4.969 11.97-2.219 25.72 6.938 34.88L370.8 96L169.4 297.4c-12.5 12.5-12.5 32.75 0 45.25C175.6 348.9 183.8 352 192 352s16.38-3.125 22.62-9.375L416 141.3l41.38 41.38c9.156 9.141 22.88 11.84 34.88 6.938C504.2 184.6 512 172.9 512 160V24C512 10.74 501.3 0 488 0z\"></path></svg><p class=\"uagb-marketing-btn__prefix\">Get access to this valuable issue immediately!</p></a></div>\n<!-- /wp:uagb/marketing-button --></div><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/04/V22I02thumb-768x1024.jpg\" alt=\"\" class=\"wp-image-14855 size-full\"/></figure></div>\n<!-- /wp:media-text --></div>\n<!-- /wp:group -->\n\n<!-- wp:heading -->\n<h2 id=\"Why-Subscribe\">Why Subscribe to InvesTech Research?</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>InvesTech Research is governed by a “Safety-First” investment strategy which is committed to helping you preserve capital and identify tremendous buying opportunities.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><!-- wp:list-item -->\n<li><strong>We have a proven track record.</strong> For 40 years, we have successfully navigated volatile markets with our “Safety-First” strategy, providing valuable insights to our subscribers.</li>\n<!-- /wp:list-item -->\n\n<!-- wp:list-item -->\n<li><strong>Over 120 years of data inform our publications.</strong> InvesTech has developed one of the largest private databases in the industry including technical, monetary, and macroeconomic data. Through this wealth of market information, we\'re able to spot trends and detect patterns that most other research firms miss.</li>\n<!-- /wp:list-item -->\n\n<!-- wp:list-item -->\n<li><strong>Time-proven proprietary indicators and tools.</strong> We are unique in our ability to analyze both the monetary policy of the Federal Reserve as well as the technical health of the stock market, and what it means for your portfolio.</li>\n<!-- /wp:list-item -->\n\n<!-- wp:list-item -->\n<li><strong>InvesTech provides 100% independent, objective analysis.</strong> We sell no investment products. We provide fiercely independent research that you will not get from brokers, mutual fund advisors, and even many investment newsletters.</li>\n<!-- /wp:list-item --></ul>\n<!-- /wp:list -->\n\n<!-- wp:buttons {\"layout\":{\"type\":\"flex\",\"justifyContent\":\"center\",\"orientation\":\"horizontal\"}} -->\n<div class=\"wp-block-buttons\"><!-- wp:button {\"className\":\"is-style-high-impact\"} -->\n<div class=\"wp-block-button is-style-high-impact\"><a class=\"wp-block-button__link wp-element-button\" href=\"https://ns2020-investech.investech.com/free-sample/\">Request Free Sample</a></div>\n<!-- /wp:button --></div>\n<!-- /wp:buttons -->\n\n<!-- wp:buttons {\"className\":\"redBtn\",\"layout\":{\"type\":\"flex\",\"justifyContent\":\"center\",\"orientation\":\"horizontal\"}} -->\n<div class=\"wp-block-buttons redBtn\"><!-- wp:button /--></div>\n<!-- /wp:buttons -->\n\n<!-- wp:group {\"className\":\"toolboxed wall-to-wall neutral-warm\"} -->\n<div class=\"wp-block-group toolboxed wall-to-wall neutral-warm\"><!-- wp:spacer {\"height\":\"10px\"} -->\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:heading -->\n<h2 id=\"Subscriber-Services\">As a Subscriber, You Will Receive:</h2>\n<!-- /wp:heading -->\n\n<!-- wp:columns {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-columns are-vertically-aligned-top\"><!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"align\":\"center\",\"id\":4934,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/pub-icon.svg\" alt=\"Publications\" class=\"wp-image-4934\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"publications\">InvesTech Issues </h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The <strong><em>monthly</em></strong> <em>InvesTech Research</em> newsletter contains both monetary and technical analysis and unique research.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"align\":\"center\",\"id\":5759,\"height\":75,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/02/knight.svg\" alt=\"\" class=\"wp-image-5759\" height=\"75\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"investech-indicators\">InvesTech Indicators</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Follow InvesTech\'s proprietary technical indicators <strong><em>daily </em></strong>to watch for important breakouts or warning flags.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"id\":7871,\"width\":90,\"height\":90,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/05/compass-328cc1.svg\" alt=\"\" class=\"wp-image-7871\" width=\"90\" height=\"90\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"market-insights\">Market Insights</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Keep<strong><em> </em></strong>up with <strong><em>weekly </em></strong>economic news and data releases and how these may affect your investing.  </p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-columns are-vertically-aligned-top\"><!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"align\":\"center\",\"id\":5490,\"height\":75,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/02/mutual-fund-port.svg\" alt=\"\" class=\"wp-image-5490\" height=\"75\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"model-fund-portfolio\">Model Fund Portfolio</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>View the <strong><em>current </em></strong>investment allocation in our Model ETF portfolio and access the latest trades as they happen.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"align\":\"center\",\"id\":4931,\"height\":75,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/fin-data-icon.svg\" alt=\"\" class=\"wp-image-4931\" height=\"75\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"daily-data\">Daily Data</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p><strong><em>Daily </em></strong>access to a wide range of stock market metrics, including market indexes, breadth/volume data, and short-term indicators.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"align\":\"center\",\"id\":5760,\"height\":75,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/02/library-1.svg\" alt=\"\" class=\"wp-image-5760\" height=\"75\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"subscriber-library\">Subscriber Library</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Explore our library of Special Reports and past issues on important topics of a timeless and historically significant nature.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:buttons {\"layout\":{\"type\":\"flex\",\"justifyContent\":\"center\",\"orientation\":\"horizontal\"}} -->\n<div class=\"wp-block-buttons\"><!-- wp:button {\"className\":\"is-style-high-impact\"} -->\n<div class=\"wp-block-button is-style-high-impact\"><a class=\"wp-block-button__link wp-element-button\" href=\"https://ns2020-investech.investech.com/product/subscriptions/\">Become a Subscriber</a></div>\n<!-- /wp:button --></div>\n<!-- /wp:buttons -->\n\n<!-- wp:spacer {\"height\":\"10px\"} -->\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer --></div>\n<!-- /wp:group -->\n\n<!-- wp:heading {\"textAlign\":\"left\"} -->\n<h2 class=\"has-text-align-left\">InvesTech\'s 42-year Track Record Speaks for Itself!</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>InvesTech is frequently quoted in the news.  <a href=\"https://ns2020-investech.investech.com/example-1/\">Read more...</a></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:uagb/testimonial {\"test_item_count\":9,\"classMigrate\":true,\"test_block\":[{\"description\":\"\\u003cem\\u003eMar. 13, 2009\\u003c/em\\u003e - InvesTech boldly advised subscribers that the markets were \\u0022heading toward a buying opportunity of a lifetime” – just 4 days after the \\u003cbr\\u003ebear market bottom!\",\"name\":\"A Buying Opportunity of a Lifetime\",\"company\":\"InvesTech 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InvesTech boldly advised subscribers that the markets were \"heading toward a buying opportunity of a lifetime” – just 4 days after the <br>bear market bottom!</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">A Buying Opportunity of a Lifetime</span><span class=\"uagb-tm__company\">InvesTech Research</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/latimes-300x76.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Dec. 9, 2001</em> - \"In all probability, it is a new bull market.\"  InvesTech\'s growing confidence in the market also may stem from its past successes in calling critical turns.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Former bear warming to bullish possibilities</span><span class=\"uagb-tm__company\">Los Angeles Times</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/07/Marketwatch-300x150.png\" alt=\"MarketWatch logo\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Sept. 6, 2007</em>  - ‘Bull markets don’t die of old age, they die from deterioration and economic imbalances, and we are seeing economic imbalances now.’”</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Newsletter editor gets defensive</span><span class=\"uagb-tm__company\">MarketWatch</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/investech-2-300x120.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>July 27, 2007</em> - InvesTech was one of the first to call the devastating bear market in <br>2007-2009.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Bear Market Warning Flags!</span><span class=\"uagb-tm__company\">InvesTech Research</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/latimes-300x76.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Dec. 9, 2001 </em>- Jim Stack was a bear on the stock market—an angry, snarling bear—Today, he is rightly considered a hero for warning subscribers... away from stocks as they climbed toward their peaks and then careened into the worst decline in a generation.  </div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Easy to understand technical analysis.</span><span class=\"uagb-tm__company\">Los Angeles Times</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/nbr-300x102.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Jan. 1, 2002</em> - Paul Kangas:</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Jim Stack of InvesTech was the only panelist to correctly predict both a recession and bear market in 2001.</span><span class=\"uagb-tm__company\">Nightly Business Report</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/dallas-1-300x136.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Aug. 19, 2001</em> - Mr. Stack has often been the lonely voice.  More significantly, he\'s often been right.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">From Afar, An Analyst Gets It Right</span><span class=\"uagb-tm__company\">Bill Deener, Staff Writer</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/washington-1-300x104.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Oct. 22, 1987</em> - The last stock in [InvesTech\'s] model portfolio was sold October 16, three days before the crash.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Only five newsletters predicted plunge</span><span class=\"uagb-tm__company\">The Washington Post</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/07/usatoday-300x118.jpg\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Jan. 4, 1988</em> - InvesTech foresaw the stock market crash of Oct. 19. On Sept. 30, the <em>InvesTech </em>newsletter told stock investors to move to 94% cash.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Expert Advice On Investing</span><span class=\"uagb-tm__company\">Dennis Cauchon, USA Today</span></div></div></div></div></div></div></div>\n<!-- /wp:uagb/testimonial -->\n\n<!-- wp:group {\"className\":\"wall-to-wall neutral-warm pad-3-0\"} -->\n<div class=\"wp-block-group wall-to-wall neutral-warm pad-3-0\"><!-- wp:columns {\"verticalAlignment\":\"center\"} -->\n<div class=\"wp-block-columns are-vertically-aligned-center\"><!-- wp:column {\"verticalAlignment\":\"center\",\"width\":\"\"} -->\n<div class=\"wp-block-column is-vertically-aligned-center\"><!-- wp:image {\"align\":\"center\",\"id\":5104,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/award-cup.svg\" alt=\"A magnificent trophy\" class=\"wp-image-5104\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"center\",\"width\":\"45%\"} -->\n<div class=\"wp-block-column is-vertically-aligned-center\" style=\"flex-basis:45%\"><!-- wp:heading {\"textColor\":\"maroon\"} -->\n<h2 class=\"has-maroon-color has-text-color\" id=\"kiplinger\"><strong>Kiplinger</strong></h2>\n<!-- /wp:heading -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"rated-best-source-of-investment-advice-by-kiplinger-personal-finance-magazine\">Rated Best Source of Investment Advice by Kiplinger Personal Finance Magazine.</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph {\"className\":\"red-caps\"} -->\n<p class=\"red-caps\"><strong>Best Stock Market Letter</strong></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"className\":\"em-red\"} -->\n<p class=\"em-red\">InvesTech Research, which promises ‘safety-first profits,’ has bested the overall stock market over the long haul with less risk. Publisher James Stack analyzes economic, monetary and market data (some going back more than 100 years) to make market calls and recommend allocations. <em>– Kiplinger Personal Finance</em></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"15%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:15%\"></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading -->\n<h2 id=\"investech-research-is-frequently-quoted-in-the-following\">InvesTech Research is Frequently Quoted in the Following:</h2>\n<!-- /wp:heading -->\n\n<!-- wp:gallery {\"linkTo\":\"none\",\"className\":\"multiply\"} -->\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped multiply\"><!-- wp:image {\"id\":15982,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/10/forbes-1-1024x513.png\" alt=\"\" class=\"wp-image-15982\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2809,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/11/Yahoo-Finance.png\" alt=\"\" class=\"wp-image-2809\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2810,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/08/MoneyShow.png\" alt=\"\" class=\"wp-image-2810\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2897,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/08/Barrons.png\" alt=\"\" class=\"wp-image-2897\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2811,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/07/Marketwatch.png\" alt=\"\" class=\"wp-image-2811\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":15981,\"width\":846,\"height\":423,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/10/NYT-1-1024x512.png\" alt=\"\" class=\"wp-image-15981\" width=\"846\" height=\"423\"/></figure>\n<!-- /wp:image --></figure>\n<!-- /wp:gallery -->\n\n<!-- wp:paragraph -->\n<p>Visit our <a href=\"https://ns2020-investech.investech.com/in-the-news/\">In The News</a> to read more.  </p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:group -->\n\n<!-- wp:heading -->\n<h2 id=\"market-insights\">Market Insights</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Keep<strong><em>&nbsp;</em></strong>up with&nbsp;<strong><em>weekly&nbsp;</em></strong>economic news and data releases and how these may affect your investing.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:acf/subscriber-content-teaser {\"name\":\"acf/subscriber-content-teaser\",\"data\":{\"post_to_show\":[\"9498\",\"9722\",\"8813\"],\"_post_to_show\":\"field_5f2aeab7381f9\",\"post_type_to_show\":\"investech-library\",\"_post_type_to_show\":\"field_5f2aec3f2eccd\",\"number_to_show\":\"3\",\"_number_to_show\":\"field_5f2aec6a2ecce\"},\"mode\":\"edit\"} /-->','Home Page - Logged Out','','inherit','closed','closed','','4-revision-v1','','','2023-03-01 11:50:23','2023-03-01 17:50:23','',4,'https://ns2020-investech.investech.com/?p=16992',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4943,1,'2020-12-29 20:00:15','2020-12-29 20:00:15','<!-- wp:paragraph -->\n<p>With its remarkable track record, the Coppock Guide should be a key tool in any investment strategy. When used with our other indicators, it can provide the discipline and patience to avoid treacherous bear market rallies and wait for the best buying opportunities that occur only a couple times each decade.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->','The Coppock Guide - Double Tops','','inherit','closed','closed','','2476-revision-v1','','','2020-12-29 20:00:15','2020-12-29 20:00:15','',2476,'https://ns2020-investech.investech.com/2476-revision-v1/',0,'revision','',0);
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INSERT INTO `wp_posts` VALUES (4957,1,'2021-01-17 21:50:13','2021-01-17 21:50:13','<!-- wp:heading -->\n<h2>Holland, 1636</h2>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p>One would suppose that there must have been some great virtue in this flower to have made it so valuable in the eyes of so prudent a people as the Dutch; but it has neither the beauty nor the perfume of the rose – hardly the beauty of the ‘sweet, sweet-pea;’ neither is it as enduring as either…\"</p><p>\"At last, however, the more prudent began to see that this folly could not last for ever… It was seen that somebody must lose fearfully in the end. As this conviction spread, prices fell, and never rose again. Confidence was destroyed, and a universal panic seized upon the dealers.\"</p><cite>Tulipomania, Holland, 1636, excerpted from Extraordinary Popular Delusions &amp; the Madness of Crowds, written by Charles Mackay 1841</cite></blockquote>\n<!-- /wp:quote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4887,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Jan_Brueghel_the_Younger_Satire_Tulip_Mania_1640-1024x655.jpg\" alt=\"Painting, A Satire of Tulip Mania by Jan Brueghel, c. 1640\" class=\"wp-image-4887\"/><figcaption>A Satire of Tulip Mania by Jan Brueghel the Younger (ca. 1640) depicts speculators as brainless monkeys in contemporary upper-class dress.</figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading -->\n<h2>Fast forward to 2017: Cryptocurrency Markets</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The quotes above referring to the Tulipomania of the 1600s may seem bizarre and distant to many. However, we see striking similarities between the investor psychology that once surrounded those antiquated tulip bulbs and that which is driving the current mania in cryptocurrencies, particularly Bitcoin:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong><em>Wealth Managers Are Being Inundated With Calls About Bitcoin</em></strong>, Bloomberg, 11/21/17</li><li><strong><em>Someone in 2010 bought 2 pizzas with 10,000 bitcoins – which today would be worth $100 million</em></strong>, Business Insider, 11/28/17</li><li><strong><em>Owning bitcoin is so much damn fun</em></strong>, Yahoo! Finance, 11/30/17</li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong><em>Bitcoin swings from bull to bear and back in a day</em></strong>, Financial Times, 11/30/17</li><li><strong><em>Bitcoin’s Wildest Ride: Up 40% in 40 Hours</em></strong>, Wall Street Journal, 12/7/17</li><li><strong><em>Bitcoin Futures Debut With 26% Rally, Trigger CBOE Trading Halts</em></strong>, Bloomberg, 12/11/17</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Bitcoin and the Lure of Decentralization</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Bitcoin is the most widely-recognized and largest cryptocurrency by market capitalization. Specifically, a cryptocurrency is a digital currency which has no central issuing or regulating authority, but instead uses a decentralized system of computers to record transactions and manage the issuance of new units. The digital asset relies on cryptography to prevent counterfeiting and fraudulent transactions. While over 1,000 unique cryptocurrencies exist today, they all share a common purpose: to enable and serve decentralized applications – a way to create a self-supporting service that no single entity operates or regulates.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Way of the future? It’s complicated…</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Cryptocurrencies may sound like the way of the future, but they are incredibly complex and difficult to understand. To illustrate, let’s take a high-level look at a theoretical transaction paid for in Bitcoin, as depicted by the flow chart at the top of page 2. Once the transaction is proposed, independent entities (called “miners”) compete on the open network to time stamp and verify the transaction by performing computationally difficult calculations. The reward for winning the elaborate race to verify and add the transaction to the public digital ledger (the blockchain) is a fraction of the transaction’s value, plus a processing fee, both denominated in Bitcoin. The integrity of the ledger is upheld by the economic self-interest of the miners – pure, unadulterated capitalism.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Bitcoin vs. Internet Bubble</h3>\n<!-- /wp:heading -->\n\n<!-- wp:image {\"align\":\"right\",\"id\":4739,\"width\":332,\"height\":392,\"sizeSlug\":\"large\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignright size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/bitcoin-1.png\" alt=\"Bitcoin vs. the Internet Bubble chart via Yahoo! Finance\" class=\"wp-image-4739\" width=\"332\" height=\"392\"/></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>Although Bitcoin has been in existence since 2009, its ascension to mainstream relevance is far more recent. Originally beloved by a very small group of passionate believers, Bitcoin saw relatively steady price appreciation in its early years while remaining virtually unknown to the general public. Over time, public enthusiasm surrounding Bitcoin has crescendoed, with the price of the digital currency rising exponentially, attracting hordes of amateur “investors” and speculators. As a result, the price of one Bitcoin has exploded by an absurd +3960% since the beginning of 2016! The ride has been volatile, including five drawdowns of at least -25% (daily close) during that period. Bitcoin’s meteoric rise dwarfs even the gains seen in the Internet Index at the peak of the notorious Tech Bubble. ➞</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Love at First Bit?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Why has the world seemingly become enamored with the concept of cryptocurrencies? The following are some of the advantages being widely touted by Bitcoin advocates:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Freedom </strong>– It is possible to send and receive Bitcoin payments anywhere in the world at any time, without scrutiny. Users don’t have to worry about third party delays or approvals, banking holidays, transfer limits, or any other laws due to lack of central authority.</li><li><strong>Anonymity </strong>– Anyone, of any age, from anywhere in the world, with access to the Internet can transact with Bitcoins without providing any paperwork or proof of identification. Since personal information is not being tied to transactions, the risk of identity theft is eliminated.</li><li><strong>Low Fees </strong>– Transaction fees for processing Bitcoin payments are relatively low. Additionally, digital currency exchanges (e.g., Coinbase) can help merchants process transactions by converting Bitcoins into fiat currency for a fee that is generally lower than most credit card processing fees.</li><li><strong>Less Risk for Merchants </strong>– Because Bitcoin transactions cannot be reversed and do not carry any personal information with them, merchants are protected from potential losses that could occur from credit card fraud.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Despite the increasing hype and number of new Bitcoin advocates, doubters and skeptics abound – and you can count us among them. An asset’s value does not go parabolic (as seen on the previous page) without carrying extreme risk. In addition, there are numerous pitfalls and uncertainties associated with cryptocurrencies:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Price Volatility </strong>– It is impossible for Bitcoin to be a good store of value and a legitimate tool for transacting business when prices change so rapidly. Imagine trying to buy a car with Bitcoin when its value is gyrating by hundreds, or even thousands of dollars over a short period of time.</li><li><strong>Intangible </strong>– Many skeptics take issue with the fact that a Bitcoin is represented by a unique string of numbers stored on a hard drive – there is no physical coin.</li><li><strong>Moral Dilemma</strong> – The anonymity provided by Bitcoin is a double-edged sword, as it makes the digital currency inherently ideal for black market dealings.</li><li><strong>Regulation </strong>– The IRS has begun taxing digital currency gains and payments. Furthermore, there is the potential that certain countries could attempt to ban cryptocurrencies altogether, particularly if terrorist activities are funded by Bitcoin.</li><li><strong>Cybersecurity and Fraud </strong>– Digital currency assets can be stolen by hackers. Additionally, as the demand for cryptocurrencies has grown, scammers and poseurs have created their own bogus digital assets.</li><li><strong>Scalability</strong> – Major digital currency exchanges (e.g., Coinbase) have had difficulty handling traffic, which causes scalability and liquidity issues.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:heading -->\n<h2>Our Perspective</h2>\n<!-- /wp:heading -->\n\n<!-- wp:image {\"align\":\"left\",\"id\":4742,\"width\":400,\"height\":225,\"sizeSlug\":\"large\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignleft size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/bitcoin-3-kings-cartoon.jpg\" alt=\"Cartoon depicting three wise men, one offering bitcoin...\" class=\"wp-image-4742\" width=\"400\" height=\"225\"/></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>Throughout history, there have been numerous examples of revolutionary ideas or innovations that turned into dangerous bubbles due to feverish speculation and Wall Street hype ─ regardless of the good intentions of the underlying concept. In our opinion, cryptocurrencies like Bitcoin are among them. Any dispute regarding the practical applications of Bitcoin matters not to the crazed speculators driving today’s rampant price gains.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Many will argue that cryptocurrencies are isolated from other aspects of the economy and financial markets. However, we are concerned that the potential impact of a violent collapse in cryptocurrency prices could be bigger and more far-reaching than anticipated. And we are not alone:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Why Bitcoin’s Bubble Matters</strong>  <span style=\"font-size: inherit;\">If there’s a price crash in the cryptocurrency, it could hit the tech sector–and more</span>, Wall Street Journal, 10/8/17</li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><span style=\"font-size: inherit;\"><strong>Deutsche Bank Economist Says a Bitcoin Crash Would Endanger Global Markets</strong></span>, Fortune, 12/10/17</li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>Whether speculation is in tulip bulbs, real estate, stocks, sub-prime mortgages, or cryptocurrencies, the pattern is usually the same. For investors, emotions run the gamut from greed, to defiance, to fear at any hint of a disruption in the system. Unless you have a voracious appetite for risk and a high tolerance for loss, today’s cryptocurrency bubble is best left to the speculators.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:separator {\"className\":\"is-style-dots\"} -->\n<hr class=\"wp-block-separator is-style-dots\"/>\n<!-- /wp:separator -->\n\n<!-- wp:buttons -->\n<div class=\"wp-block-buttons\"><!-- wp:button -->\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\"></a></div>\n<!-- /wp:button --></div>\n<!-- /wp:buttons -->\n\n<!-- wp:paragraph -->\n<p>First published in our Market Newsletter, Vol. #, Issue #. <a href=\"#\" target=\"_blank\" rel=\"noreferrer noopener\">Download the PDF.</a></p>\n<!-- /wp:paragraph -->','Bitcoin - Tiptoe, through the Tulips...','','inherit','closed','closed','','2418-revision-v1','','','2021-01-17 21:50:13','2021-01-17 21:50:13','',2418,'https://ns2020-investech.investech.com/2418-revision-v1/',0,'revision','',0);
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INSERT INTO `wp_posts` VALUES (16987,2,'2023-03-01 11:25:16','2023-03-01 17:25:16','<!-- wp:group {\"align\":\"wide\",\"className\":\"wall-to-wall neutral-warm pad-2-0\"} -->\n<div class=\"wp-block-group alignwide wall-to-wall neutral-warm pad-2-0\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"10%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:buttons -->\n<div class=\"wp-block-buttons\"><!-- wp:button {\"align\":\"center\"} -->\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link wp-element-button\" href=\"/economic-trends\">Economic Trends</a></div>\n<!-- /wp:button --></div>\n<!-- /wp:buttons -->\n\n<!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\">Stay up to date with the latest Economic Trends! This new feature tracks important indicators you should be watching. Economic Trends are available from our menu or by clicking the Economic Trends button below.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\"><strong>This new service is FREE so you are welcome to share it with friends and family!</strong></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"textAlign\":\"center\"} -->\n<h2 class=\"has-text-align-center\">New to InvesTech Research - <em>Economic Trends</em></h2>\n<!-- /wp:heading --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"10%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:group -->\n\n<!-- wp:group {\"className\":\"wall-to-wall pad-2-0\"} -->\n<div class=\"wp-block-group wall-to-wall pad-2-0\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:image {\"id\":14420,\"width\":268,\"height\":80,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-full is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/03/BARRONS-logo.png\" alt=\"\" class=\"wp-image-14420\" width=\"268\" height=\"80\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:heading {\"level\":3,\"textColor\":\"maroon\"} -->\n<h3 class=\"has-maroon-color has-text-color\">Read what InvesTech &amp; Jim Stack were saying BEFORE the market peaked and started falling…</h3>\n<!-- /wp:heading -->\n\n<!-- wp:heading -->\n<h2><strong>“Preparing for a Bear Market”</strong></h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Dec. 17, 2021 –&nbsp;<em>Barron’s&nbsp;</em>interviewed Jim Stack, president of InvesTech Research, in a feature article about the best strategy and portfolio positioning for today’s high-risk market.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Read the&nbsp;<a href=\"https://webreprints.djreprints.com/58891.pdf\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>full article</strong></a>&nbsp;to see what steps investors should be taking to navigate this market safely.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:group -->\n\n<!-- wp:group {\"align\":\"wide\",\"className\":\"wall-to-wall neutral-warm pad-2-0\"} -->\n<div class=\"wp-block-group alignwide wall-to-wall neutral-warm pad-2-0\"><!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":14855,\"mediaLink\":\"https://ns2020-investech.investech.com/home/v22i02thumb/\",\"mediaType\":\"image\",\"mediaWidth\":26} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 26%\"><div class=\"wp-block-media-text__content\"><!-- wp:heading {\"textColor\":\"med-grey\"} -->\n<h2 class=\"has-med-grey-color has-text-color\">Don’t miss this essential issue as the Fed heads toward a monetary showdown…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3><em>On Collision Course with a Bear Market</em></h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Before volatility returned with a vengeance, InvesTech published its February issue, where we laid out the path of a (probable) bear market. With warning flags dropping into place, lofty levels of speculation and overvaluation, and increasingly entrenched inflation pressures, this has begun to resemble one of the most significant bull market tops in history. 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Through this wealth of market information, we\'re able to spot trends and detect patterns that most other research firms miss.</li>\n<!-- /wp:list-item -->\n\n<!-- wp:list-item -->\n<li><strong>Time-proven proprietary indicators and tools.</strong> We are unique in our ability to analyze both the monetary policy of the Federal Reserve as well as the technical health of the stock market, and what it means for your portfolio.</li>\n<!-- /wp:list-item -->\n\n<!-- wp:list-item -->\n<li><strong>InvesTech provides 100% independent, objective analysis.</strong> We sell no investment products. We provide fiercely independent research that you will not get from brokers, mutual fund advisors, and even many investment newsletters.</li>\n<!-- /wp:list-item --></ul>\n<!-- /wp:list -->\n\n<!-- wp:buttons {\"layout\":{\"type\":\"flex\",\"justifyContent\":\"center\",\"orientation\":\"horizontal\"}} -->\n<div class=\"wp-block-buttons\"><!-- wp:button {\"className\":\"is-style-high-impact\"} -->\n<div class=\"wp-block-button is-style-high-impact\"><a class=\"wp-block-button__link wp-element-button\" href=\"https://ns2020-investech.investech.com/free-sample/\">Request Free Sample</a></div>\n<!-- /wp:button --></div>\n<!-- /wp:buttons -->\n\n<!-- wp:buttons {\"className\":\"redBtn\",\"layout\":{\"type\":\"flex\",\"justifyContent\":\"center\",\"orientation\":\"horizontal\"}} -->\n<div class=\"wp-block-buttons redBtn\"><!-- wp:button /--></div>\n<!-- /wp:buttons -->\n\n<!-- wp:group {\"className\":\"toolboxed wall-to-wall neutral-warm\"} -->\n<div class=\"wp-block-group toolboxed 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<strong><em>monthly</em></strong> <em>InvesTech Research</em> newsletter contains both monetary and technical analysis and unique research.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"align\":\"center\",\"id\":5759,\"height\":75,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/02/knight.svg\" alt=\"\" class=\"wp-image-5759\" height=\"75\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"investech-indicators\">InvesTech Indicators</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Follow InvesTech\'s proprietary technical indicators <strong><em>daily </em></strong>to watch for important breakouts or warning flags.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"id\":7871,\"width\":90,\"height\":90,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/05/compass-328cc1.svg\" alt=\"\" class=\"wp-image-7871\" width=\"90\" height=\"90\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"market-insights\">Market Insights</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Keep<strong><em> </em></strong>up with <strong><em>weekly </em></strong>economic news and data releases and how these may affect your investing.  </p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-columns are-vertically-aligned-top\"><!-- wp:column {\"verticalAlignment\":\"top\"} 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-->\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/fin-data-icon.svg\" alt=\"\" class=\"wp-image-4931\" height=\"75\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"daily-data\">Daily Data</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p><strong><em>Daily </em></strong>access to a wide range of stock market metrics, including market indexes, breadth/volume data, and short-term indicators.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"top\"} -->\n<div class=\"wp-block-column is-vertically-aligned-top\"><!-- wp:image {\"align\":\"center\",\"id\":5760,\"height\":75,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/02/library-1.svg\" alt=\"\" class=\"wp-image-5760\" height=\"75\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"subscriber-library\">Subscriber Library</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Explore our library of Special Reports and past issues on important topics of a timeless and historically significant nature.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:buttons {\"layout\":{\"type\":\"flex\",\"justifyContent\":\"center\",\"orientation\":\"horizontal\"}} -->\n<div class=\"wp-block-buttons\"><!-- wp:button {\"className\":\"is-style-high-impact\"} -->\n<div class=\"wp-block-button is-style-high-impact\"><a class=\"wp-block-button__link wp-element-button\" href=\"https://ns2020-investech.investech.com/product/subscriptions/\">Become a Subscriber</a></div>\n<!-- /wp:button --></div>\n<!-- /wp:buttons -->\n\n<!-- wp:spacer {\"height\":\"10px\"} -->\n<div style=\"height:10px\" aria-hidden=\"true\" 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InvesTech boldly advised subscribers that the markets were \"heading toward a buying opportunity of a lifetime” – just 4 days after the <br>bear market bottom!</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">A Buying Opportunity of a Lifetime</span><span class=\"uagb-tm__company\">InvesTech Research</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/latimes-300x76.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Dec. 9, 2001</em> - \"In all probability, it is a new bull market.\"  InvesTech\'s growing confidence in the market also may stem from its past successes in calling critical turns.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Former bear warming to bullish possibilities</span><span class=\"uagb-tm__company\">Los Angeles Times</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/07/Marketwatch-300x150.png\" alt=\"MarketWatch logo\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Sept. 6, 2007</em>  - ‘Bull markets don’t die of old age, they die from deterioration and economic imbalances, and we are seeing economic imbalances now.’”</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Newsletter editor gets defensive</span><span class=\"uagb-tm__company\">MarketWatch</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/investech-2-300x120.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>July 27, 2007</em> - InvesTech was one of the first to call the devastating bear market in <br>2007-2009.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Bear Market Warning Flags!</span><span class=\"uagb-tm__company\">InvesTech Research</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/latimes-300x76.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Dec. 9, 2001 </em>- Jim Stack was a bear on the stock market—an angry, snarling bear—Today, he is rightly considered a hero for warning subscribers... away from stocks as they climbed toward their peaks and then careened into the worst decline in a generation.  </div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Easy to understand technical analysis.</span><span class=\"uagb-tm__company\">Los Angeles Times</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/nbr-300x102.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Jan. 1, 2002</em> - Paul Kangas:</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Jim Stack of InvesTech was the only panelist to correctly predict both a recession and bear market in 2001.</span><span class=\"uagb-tm__company\">Nightly Business Report</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/dallas-1-300x136.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Aug. 19, 2001</em> - Mr. Stack has often been the lonely voice.  More significantly, he\'s often been right.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">From Afar, An Analyst Gets It Right</span><span class=\"uagb-tm__company\">Bill Deener, Staff Writer</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/07/washington-1-300x104.png\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Oct. 22, 1987</em> - The last stock in [InvesTech\'s] model portfolio was sold October 16, three days before the crash.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Only five newsletters predicted plunge</span><span class=\"uagb-tm__company\">The Washington Post</span></div></div></div></div></div><div class=\"uagb-testimonial__wrap  uagb-tm__imgicon-style-normal uagb-tm__image-position-top uagb-tm__bg-type-color \"><div class=\"uagb-tm__content\"><div class=\"uagb-tm__overlay\"></div><div class=\"uagb-tm__image-content\"><div class=\"uagb-tm__image\"><img class=\"uagb-tm-img-src\" src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/07/usatoday-300x118.jpg\" alt=\"\" width=\"189\" height=\"75\" loading=\"lazy\"></div></div><div class=\"uagb-tm__text-wrap\"><div class=\"uagb-tm__desc\"><em>Jan. 4, 1988</em> - InvesTech foresaw the stock market crash of Oct. 19. On Sept. 30, the <em>InvesTech </em>newsletter told stock investors to move to 94% cash.</div><div class=\"uagb-tm__meta-inner\"><div class=\"uagb-testimonial-details\"><span class=\"uagb-tm__author-name\">Expert Advice On Investing</span><span class=\"uagb-tm__company\">Dennis Cauchon, USA Today</span></div></div></div></div></div></div></div>\n<!-- /wp:uagb/testimonial -->\n\n<!-- wp:group {\"className\":\"wall-to-wall neutral-warm pad-3-0\"} -->\n<div class=\"wp-block-group wall-to-wall neutral-warm pad-3-0\"><!-- wp:columns {\"verticalAlignment\":\"center\"} -->\n<div class=\"wp-block-columns are-vertically-aligned-center\"><!-- wp:column {\"verticalAlignment\":\"center\",\"width\":\"\"} -->\n<div class=\"wp-block-column is-vertically-aligned-center\"><!-- wp:image {\"align\":\"center\",\"id\":5104,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/award-cup.svg\" alt=\"A magnificent trophy\" class=\"wp-image-5104\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"center\",\"width\":\"45%\"} -->\n<div class=\"wp-block-column is-vertically-aligned-center\" style=\"flex-basis:45%\"><!-- wp:heading {\"textColor\":\"maroon\"} -->\n<h2 class=\"has-maroon-color has-text-color\" id=\"kiplinger\"><strong>Kiplinger</strong></h2>\n<!-- /wp:heading -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 id=\"rated-best-source-of-investment-advice-by-kiplinger-personal-finance-magazine\">Rated Best Source of Investment Advice by Kiplinger Personal Finance Magazine.</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph {\"className\":\"red-caps\"} -->\n<p class=\"red-caps\"><strong>Best Stock Market Letter</strong></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"className\":\"em-red\"} -->\n<p class=\"em-red\">InvesTech Research, which promises ‘safety-first profits,’ has bested the overall stock market over the long haul with less risk. Publisher James Stack analyzes economic, monetary and market data (some going back more than 100 years) to make market calls and recommend allocations. <em>– Kiplinger Personal Finance</em></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"15%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:15%\"></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading -->\n<h2 id=\"investech-research-is-frequently-quoted-in-the-following\">InvesTech Research is Frequently Quoted in the Following:</h2>\n<!-- /wp:heading -->\n\n<!-- wp:gallery {\"linkTo\":\"none\",\"className\":\"multiply\"} -->\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped multiply\"><!-- wp:image {\"id\":15982,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/10/forbes-1-1024x513.png\" alt=\"\" class=\"wp-image-15982\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2809,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/11/Yahoo-Finance.png\" alt=\"\" class=\"wp-image-2809\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2810,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/08/MoneyShow.png\" alt=\"\" class=\"wp-image-2810\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2897,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/08/Barrons.png\" alt=\"\" class=\"wp-image-2897\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":2811,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2019/07/Marketwatch.png\" alt=\"\" class=\"wp-image-2811\"/></figure>\n<!-- /wp:image -->\n\n<!-- wp:image {\"id\":15981,\"width\":846,\"height\":423,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2022/10/NYT-1-1024x512.png\" alt=\"\" class=\"wp-image-15981\" width=\"846\" height=\"423\"/></figure>\n<!-- /wp:image --></figure>\n<!-- /wp:gallery -->\n\n<!-- wp:paragraph -->\n<p>Visit our <a href=\"https://ns2020-investech.investech.com/in-the-news/\">In The News</a> to read more.  </p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:group -->\n\n<!-- wp:heading -->\n<h2 id=\"market-insights\">Market Insights</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Keep<strong><em>&nbsp;</em></strong>up with&nbsp;<strong><em>weekly&nbsp;</em></strong>economic news and data releases and how these may affect your investing.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:acf/subscriber-content-teaser {\"name\":\"acf/subscriber-content-teaser\",\"data\":{\"post_to_show\":[\"9498\",\"9722\",\"8813\"],\"_post_to_show\":\"field_5f2aeab7381f9\",\"post_type_to_show\":\"investech-library\",\"_post_type_to_show\":\"field_5f2aec3f2eccd\",\"number_to_show\":\"3\",\"_number_to_show\":\"field_5f2aec6a2ecce\"},\"mode\":\"edit\"} /-->','Home Page - Logged Out','','inherit','closed','closed','','4-revision-v1','','','2023-03-01 11:25:16','2023-03-01 17:25:16','',4,'https://ns2020-investech.investech.com/?p=16987',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4977,3,'2021-01-26 18:43:35','2021-01-26 18:43:35','<!-- wp:paragraph -->\n<p>Managing risk in the final stages of a market cycle is vitally important for preserving capital and generating superior long-term investment returns. With a safety-first investment strategy, the first line of defense for protecting assets is to selectively take profits off the table and hold the proceeds in cash. Adjusting stock and sector weightings toward more resilient areas of the market can also fortify a portfolio. When bear market warning flags begin to wave, adding a bear fund can further reduce exposure to downside market movements and lower portfolio volatility.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Bear Fund Fundamentals</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A bear fund is a mutual fund or exchange-traded fund (ETF) designed to increase in value as the market drops. Conversely, the fund will lose value when the market rises. The original bear market mutual funds have been around since the mid-1990s, and several bear fund ETFs following the same principles were incepted just over a decade ago, prior to the last bear market. At InvesTech Research, the primary reason for using a bear fund is as an “insurance policy” to offset potential losses in core holdings of the portfolio during market declines. Our recommendation to add a bear fund to the Model Fund Portfolio has raised some questions from our subscribers. The most frequently asked questions –some simple, some more complex– are addressed below.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why use a bear fund instead of selling positions and raising cash?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Increasing cash in the portfolio is an important part of a defensive strategy, but there are several reasons for maintaining select long positions and partially offsetting them with the “insurance policy” of a bear market fund:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Diversification</strong>: Bear fund insurance allows you to hold onto more stocks in a portfolio, thus maintaining greater diversification while counteracting the impact of a stock or sector that doesn’t perform as anticipated.</li><li><strong>Lower portfolio volatility</strong>: Market volatility usually increases as risks rise. A strategy that manages risk is inherently less volatile, and by “neutralizing” a portion of the portfolio, volatility is reduced.</li><li><strong>Dividends</strong>: Dividend payments continue for the positions that are maintained in a portfolio.</li><li><strong>Reduce capital gains tax</strong>: In taxable accounts, selling stocks can create sizeable realized gains. Limiting sales can lessen the tax bite.</li><li><strong>Prepare for the next bull market</strong>: When risks begin to resolve and the time is right to increase market allocation, new additions for the portfolio must be properly vetted prior to purchase. In the meantime, exposure can be quickly increased by removing the bear fund, which “de-neutralizes” a portion of the portfolio to participate in the market recovery without delay.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>What do we mean by a “net” long position?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns {\"verticalAlignment\":\"center\"} -->\n<div class=\"wp-block-columns are-vertically-aligned-center\"><!-- wp:column {\"verticalAlignment\":\"center\",\"width\":\"50%\"} -->\n<div class=\"wp-block-column is-vertically-aligned-center\" style=\"flex-basis:50%\"><!-- wp:paragraph -->\n<p>The “net” long position in the Model Fund Portfolio is currently 55%. But how does this all add up?</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>As illustrated in the chart at right, current holdings include 63% long funds (blue), 8% short bear fund (red), and 29% cash (yellow). The bear fund effectively “neutralizes” or offsets the impact of an equivalent position of long holdings (shaded blue area). In other words, if the long position moves down, the bear fund moves up and the return on that combination should be negligible for the day. Therefore, the net long position, or overall exposure to the equity market, is the 63% long position minus the 8% short position which is equal to a 55% “net” long position.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"verticalAlignment\":\"center\",\"width\":\"50%\"} -->\n<div class=\"wp-block-column is-vertically-aligned-center\" style=\"flex-basis:50%\"><!-- wp:image {\"id\":4803,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-full\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/ModelPortfolioBarChart.png\" alt=\"InvesTech Model Fund Portfolio Chart\" class=\"wp-image-4803\"/><figcaption>InvesTech Model Fund Portfolio Chart</figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why is the ProShares Short S&amp;P 500 ETF (SH) a good choice for the Model Fund Portfolio?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>We recommended SH for a number of reasons. Our portfolio holdings are based on S&amp;P 500 sectors, so it’s appropriate to select an inverse index fund correlated to this broad market Index. ProShares Short S&amp;P 500 was incepted in 2006 and has a solid track record through the last bear market. It is the largest and most liquid inverse S&amp;P 500 fund, currently holding over $1.6B in assets. We also like some of the advantages ETFs have over mutual funds such as lower expense ratios and the ability to trade throughout the day.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Finally, this fund is passively managed to inversely correlate to the Index’s daily returns. Actively managed funds typically focus on profiting from shorting individual stocks, frequently use resource holdings, and may concentrate on attempts to time the market. Performance can vary depending on the manager’s ability to pick the right stocks to short. Thus, for a safety-first strategy, a more predictable passive fund is the best choice for our purposes.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:image {\"align\":\"center\",\"id\":4801,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/bear_market_funds2.png\" alt=\"Bear Market Funds\" class=\"wp-image-4801\"/><figcaption><strong>Bear Market Alternatives</strong></figcaption></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>We’ve assembled a list of some of the larger funds that have longer track records, including both ETFs and mutual funds. Before purchasing any on the list above, you should perform your own due diligence to determine the suitability for your portfolio. Reasons for providing these additional choices include:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Some retirement accounts are limited to mutual fund investments only.</li><li>When using a passively managed fund, it’s best to choose one based on an index that most closely matches your portfolio holdings.</li><li>If you are willing to accept the added risk that comes with an actively managed fund, you may want to consider one of the total return alternatives.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>If a passive bear fund offsets the market on a daily basis, what happens over a longer period of time?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Due to the compounding of daily returns, performance over periods longer than one day will likely differ from the inverse of the target index. To demonstrate, let’s look at an exaggerated example of how compounding affects returns.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Assume that both ProShares Short S&amp;P 500 (SH) and the S&amp;P 500 start with a value of $100. On Day 1, the S&amp;P 500 loses 10% causing SH to gain 10%. The S&amp;P 500, therefore, ends Day 1 with a price of $90, while SH has grown to $110. If on Day 2 the S&amp;P 500 loses 10% again, its price drops to $81 and SH increases to $121. While achieving perfect correlation on a daily basis, after two days the S&amp;P 500 is down 19% and SH is up 21%.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>If the stock market continues to decline after purchasing a bear fund, gains can be much more than you might expect due to progressively larger dollar changes based on the increasing value of the investment. On the other hand, if the stock market rises persistently after a bear fund is purchased, the daily percentage changes result in progressively smaller dollar changes as the value of the investment decreases. Hence, investors lose less than they might expect when the fund’s return over the course of the rally is calculated.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:image {\"align\":\"center\",\"id\":4802,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/SH_SP500_07_10.png\" alt=\"S&amp;P 500 and SH after the stock market peak in October 2007\" class=\"wp-image-4802\"/><figcaption>S&amp;P 500 and SH after the stock market peak in October 2007</figcaption></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>This point is illustrated in the graphs above, which show the S&amp;P 500 and SH after the stock market peak in October 2007. Clearly, bear funds can serve as valuable “insurance” in a declining market, even if the position is held past the market bottom. <strong>One important note:</strong> bear fund performance in trendless, volatile markets is less predictable than in markets persistently trending up or down. In fact, due to compounding effects, an inverse index fund may even decline as the market remains flat.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why don’t you use a leveraged bear fund?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A leveraged bear fund is designed to go up two or three times as much as its benchmark goes down on a daily basis. “More” might sound better to the average investor; however, trying to time bear markets or corrections rarely works, and one can easily get burned with leveraged funds if the market doesn\'t move as anticipated and the compounding effect is magnified. With this in mind, we’d avoid the leveraged bear market funds due to the increased volatility and risk.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Summary: A Safety-first Approach</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Bear market funds should be used to neutralize portfolio risk and help you sleep at night – not as a tool for speculative short-term trading. With a safety-first investment strategy, an inverse index fund can serve as an effective, low cost insurance offering an efficient way to offset rising market risk and reduce portfolio volatility. When considering a bear fund, the following guidelines should be helpful:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Use bear funds as an insurance to offset a portion of your portfolio investments.</li><li>Stay with the passively managed bear funds that inversely correlate with the broader indexes.</li><li>Choose the larger more liquid funds with longer track records.</li><li>Gradually implement a bear fund position as a bear market becomes more likely.</li><li>Do not use leveraged funds.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>If bear funds are not an option for your portfolio, the alternative is to reduce your long positions to reach the target “net” allocation and hold the balance in cash.</p>\n<!-- /wp:paragraph -->','The \"Bare Necessities\" About Bear Funds','','inherit','closed','closed','','2457-revision-v1','','','2021-01-26 18:43:35','2021-01-26 18:43:35','',2457,'https://ns2020-investech.investech.com/2457-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4979,3,'2021-01-26 19:05:04','2021-01-26 19:05:04','<!-- wp:paragraph -->\n<p>Managing risk in the final stages of a market cycle is vitally important for preserving capital and generating superior long-term investment returns. With a safety-first investment strategy, the first line of defense for protecting assets is to selectively take profits off the table and hold the proceeds in cash. Adjusting stock and sector weightings toward more resilient areas of the market can also fortify a portfolio. When bear market warning flags begin to wave, adding a bear fund can further reduce exposure to downside market movements and lower portfolio volatility.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Bear Fund Fundamentals</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A bear fund is a mutual fund or exchange-traded fund (ETF) designed to increase in value as the market drops. Conversely, the fund will lose value when the market rises. The original bear market mutual funds have been around since the mid-1990s, and several bear fund ETFs following the same principles were incepted just over a decade ago, prior to the last bear market. At InvesTech Research, the primary reason for using a bear fund is as an “insurance policy” to offset potential losses in core holdings of the portfolio during market declines. Our recommendation to add a bear fund to the Model Fund Portfolio has raised some questions from our subscribers. The most frequently asked questions –some simple, some more complex– are addressed below.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why use a bear fund instead of selling positions and raising cash?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Increasing cash in the portfolio is an important part of a defensive strategy, but there are several reasons for maintaining select long positions and partially offsetting them with the “insurance policy” of a bear market fund:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Diversification</strong>: Bear fund insurance allows you to hold onto more stocks in a portfolio, thus maintaining greater diversification while counteracting the impact of a stock or sector that doesn’t perform as anticipated.</li><li><strong>Lower portfolio volatility</strong>: Market volatility usually increases as risks rise. A strategy that manages risk is inherently less volatile, and by “neutralizing” a portion of the portfolio, volatility is reduced.</li><li><strong>Dividends</strong>: Dividend payments continue for the positions that are maintained in a portfolio.</li><li><strong>Reduce capital gains tax</strong>: In taxable accounts, selling stocks can create sizeable realized gains. Limiting sales can lessen the tax bite.</li><li><strong>Prepare for the next bull market</strong>: When risks begin to resolve and the time is right to increase market allocation, new additions for the portfolio must be properly vetted prior to purchase. In the meantime, exposure can be quickly increased by removing the bear fund, which “de-neutralizes” a portion of the portfolio to participate in the market recovery without delay.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:heading {\"level\":3} -->\n<h3>What do we mean by a “net” long position?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The “net” long position in the Model Fund Portfolio is currently 55%. But how does this all add up?</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>As illustrated in the chart at right, current holdings include 63% long funds (blue), 8% short bear fund (red), and 29% cash (yellow). The bear fund effectively “neutralizes” or offsets the impact of an equivalent position of long holdings (shaded blue area). In other words, if the long position moves down, the bear fund moves up and the return on that combination should be negligible for the day. Therefore, the net long position, or overall exposure to the equity market, is the 63% long position minus the 8% short position which is equal to a 55% “net” long position.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4803,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-full\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/ModelPortfolioBarChart.png\" alt=\"InvesTech Model Fund Portfolio Chart\" class=\"wp-image-4803\"/><figcaption>InvesTech Model Fund Portfolio Chart</figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why is the ProShares Short S&amp;P 500 ETF (SH) a good choice for the Model Fund Portfolio?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>We recommended SH for a number of reasons. Our portfolio holdings are based on S&amp;P 500 sectors, so it’s appropriate to select an inverse index fund correlated to this broad market Index. ProShares Short S&amp;P 500 was incepted in 2006 and has a solid track record through the last bear market. It is the largest and most liquid inverse S&amp;P 500 fund, currently holding over $1.6B in assets. We also like some of the advantages ETFs have over mutual funds such as lower expense ratios and the ability to trade throughout the day.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Finally, this fund is passively managed to inversely correlate to the Index’s daily returns. Actively managed funds typically focus on profiting from shorting individual stocks, frequently use resource holdings, and may concentrate on attempts to time the market. Performance can vary depending on the manager’s ability to pick the right stocks to short. Thus, for a safety-first strategy, a more predictable passive fund is the best choice for our purposes.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:image {\"align\":\"center\",\"id\":4801,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/bear_market_funds2.png\" alt=\"Bear Market Funds\" class=\"wp-image-4801\"/><figcaption><strong>Bear Market Alternatives</strong></figcaption></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>We’ve assembled a list of some of the larger funds that have longer track records, including both ETFs and mutual funds. Before purchasing any on the list above, you should perform your own due diligence to determine the suitability for your portfolio. Reasons for providing these additional choices include:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Some retirement accounts are limited to mutual fund investments only.</li><li>When using a passively managed fund, it’s best to choose one based on an index that most closely matches your portfolio holdings.</li><li>If you are willing to accept the added risk that comes with an actively managed fund, you may want to consider one of the total return alternatives.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>If a passive bear fund offsets the market on a daily basis, what happens over a longer period of time?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Due to the compounding of daily returns, performance over periods longer than one day will likely differ from the inverse of the target index. To demonstrate, let’s look at an exaggerated example of how compounding affects returns.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Assume that both ProShares Short S&amp;P 500 (SH) and the S&amp;P 500 start with a value of $100. On Day 1, the S&amp;P 500 loses 10% causing SH to gain 10%. The S&amp;P 500, therefore, ends Day 1 with a price of $90, while SH has grown to $110. If on Day 2 the S&amp;P 500 loses 10% again, its price drops to $81 and SH increases to $121. While achieving perfect correlation on a daily basis, after two days the S&amp;P 500 is down 19% and SH is up 21%.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>If the stock market continues to decline after purchasing a bear fund, gains can be much more than you might expect due to progressively larger dollar changes based on the increasing value of the investment. On the other hand, if the stock market rises persistently after a bear fund is purchased, the daily percentage changes result in progressively smaller dollar changes as the value of the investment decreases. Hence, investors lose less than they might expect when the fund’s return over the course of the rally is calculated.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"align\":\"center\",\"id\":4802,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/SH_SP500_07_10.png\" alt=\"S&amp;P 500 and SH after the stock market peak in October 2007\" class=\"wp-image-4802\"/><figcaption>S&amp;P 500 and SH after the stock market peak in October 2007</figcaption></figure></div>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>This point is illustrated in the graphs above, which show the S&amp;P 500 and SH after the stock market peak in October 2007. Clearly, bear funds can serve as valuable “insurance” in a declining market, even if the position is held past the market bottom. <strong>One important note:</strong> bear fund performance in trendless, volatile markets is less predictable than in markets persistently trending up or down. In fact, due to compounding effects, an inverse index fund may even decline as the market remains flat.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why don’t you use a leveraged bear fund?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A leveraged bear fund is designed to go up two or three times as much as its benchmark goes down on a daily basis. “More” might sound better to the average investor; however, trying to time bear markets or corrections rarely works, and one can easily get burned with leveraged funds if the market doesn\'t move as anticipated and the compounding effect is magnified. With this in mind, we’d avoid the leveraged bear market funds due to the increased volatility and risk.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Summary: A Safety-first Approach</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Bear market funds should be used to neutralize portfolio risk and help you sleep at night – not as a tool for speculative short-term trading. With a safety-first investment strategy, an inverse index fund can serve as an effective, low cost insurance offering an efficient way to offset rising market risk and reduce portfolio volatility. When considering a bear fund, the following guidelines should be helpful:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Use bear funds as an insurance to offset a portion of your portfolio investments.</li><li>Stay with the passively managed bear funds that inversely correlate with the broader indexes.</li><li>Choose the larger more liquid funds with longer track records.</li><li>Gradually implement a bear fund position as a bear market becomes more likely.</li><li>Do not use leveraged funds.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>If bear funds are not an option for your portfolio, the alternative is to reduce your long positions to reach the target “net” allocation and hold the balance in cash.</p>\n<!-- /wp:paragraph -->','The \"Bare Necessities\" About Bear Funds','','inherit','closed','closed','','2457-revision-v1','','','2021-01-26 19:05:04','2021-01-26 19:05:04','',2457,'https://ns2020-investech.investech.com/2457-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4980,3,'2021-01-26 19:07:18','2021-01-26 19:07:18','<!-- wp:paragraph -->\n<p>Managing risk in the final stages of a market cycle is vitally important for preserving capital and generating superior long-term investment returns. With a safety-first investment strategy, the first line of defense for protecting assets is to selectively take profits off the table and hold the proceeds in cash. Adjusting stock and sector weightings toward more resilient areas of the market can also fortify a portfolio. When bear market warning flags begin to wave, adding a bear fund can further reduce exposure to downside market movements and lower portfolio volatility.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Bear Fund Fundamentals</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A bear fund is a mutual fund or exchange-traded fund (ETF) designed to increase in value as the market drops. Conversely, the fund will lose value when the market rises. The original bear market mutual funds have been around since the mid-1990s, and several bear fund ETFs following the same principles were incepted just over a decade ago, prior to the last bear market. At InvesTech Research, the primary reason for using a bear fund is as an “insurance policy” to offset potential losses in core holdings of the portfolio during market declines. Our recommendation to add a bear fund to the Model Fund Portfolio has raised some questions from our subscribers. The most frequently asked questions –some simple, some more complex– are addressed below.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why use a bear fund instead of selling positions and raising cash?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Increasing cash in the portfolio is an important part of a defensive strategy, but there are several reasons for maintaining select long positions and partially offsetting them with the “insurance policy” of a bear market fund:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Diversification</strong>: Bear fund insurance allows you to hold onto more stocks in a portfolio, thus maintaining greater diversification while counteracting the impact of a stock or sector that doesn’t perform as anticipated.</li><li><strong>Lower portfolio volatility</strong>: Market volatility usually increases as risks rise. A strategy that manages risk is inherently less volatile, and by “neutralizing” a portion of the portfolio, volatility is reduced.</li><li><strong>Dividends</strong>: Dividend payments continue for the positions that are maintained in a portfolio.</li><li><strong>Reduce capital gains tax</strong>: In taxable accounts, selling stocks can create sizeable realized gains. Limiting sales can lessen the tax bite.</li><li><strong>Prepare for the next bull market</strong>: When risks begin to resolve and the time is right to increase market allocation, new additions for the portfolio must be properly vetted prior to purchase. In the meantime, exposure can be quickly increased by removing the bear fund, which “de-neutralizes” a portion of the portfolio to participate in the market recovery without delay.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:heading {\"level\":3} -->\n<h3>What do we mean by a “net” long position?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The “net” long position in the Model Fund Portfolio is currently 55%. But how does this all add up?</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>As illustrated in the chart at right, current holdings include 63% long funds (blue), 8% short bear fund (red), and 29% cash (yellow). The bear fund effectively “neutralizes” or offsets the impact of an equivalent position of long holdings (shaded blue area). In other words, if the long position moves down, the bear fund moves up and the return on that combination should be negligible for the day. Therefore, the net long position, or overall exposure to the equity market, is the 63% long position minus the 8% short position which is equal to a 55% “net” long position.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4803,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-full\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/ModelPortfolioBarChart.png\" alt=\"InvesTech Model Fund Portfolio Chart\" class=\"wp-image-4803\"/><figcaption>InvesTech Model Fund Portfolio Chart</figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why is the ProShares Short S&amp;P 500 ETF (SH) a good choice for the Model Fund Portfolio?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>We recommended SH for a number of reasons. Our portfolio holdings are based on S&amp;P 500 sectors, so it’s appropriate to select an inverse index fund correlated to this broad market Index. ProShares Short S&amp;P 500 was incepted in 2006 and has a solid track record through the last bear market. It is the largest and most liquid inverse S&amp;P 500 fund, currently holding over $1.6B in assets. We also like some of the advantages ETFs have over mutual funds such as lower expense ratios and the ability to trade throughout the day.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Finally, this fund is passively managed to inversely correlate to the Index’s daily returns. Actively managed funds typically focus on profiting from shorting individual stocks, frequently use resource holdings, and may concentrate on attempts to time the market. Performance can vary depending on the manager’s ability to pick the right stocks to short. Thus, for a safety-first strategy, a more predictable passive fund is the best choice for our purposes.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:image {\"align\":\"center\",\"id\":4801,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/bear_market_funds2.png\" alt=\"Bear Market Funds\" class=\"wp-image-4801\"/><figcaption><strong>Bear Market Alternatives</strong></figcaption></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>We’ve assembled a list of some of the larger funds that have longer track records, including both ETFs and mutual funds. Before purchasing any on the list above, you should perform your own due diligence to determine the suitability for your portfolio. Reasons for providing these additional choices include:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Some retirement accounts are limited to mutual fund investments only.</li><li>When using a passively managed fund, it’s best to choose one based on an index that most closely matches your portfolio holdings.</li><li>If you are willing to accept the added risk that comes with an actively managed fund, you may want to consider one of the total return alternatives.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>If a passive bear fund offsets the market on a daily basis, what happens over a longer period of time?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Due to the compounding of daily returns, performance over periods longer than one day will likely differ from the inverse of the target index. To demonstrate, let’s look at an exaggerated example of how compounding affects returns.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Assume that both ProShares Short S&amp;P 500 (SH) and the S&amp;P 500 start with a value of $100. On Day 1, the S&amp;P 500 loses 10% causing SH to gain 10%. The S&amp;P 500, therefore, ends Day 1 with a price of $90, while SH has grown to $110. If on Day 2 the S&amp;P 500 loses 10% again, its price drops to $81 and SH increases to $121. While achieving perfect correlation on a daily basis, after two days the S&amp;P 500 is down 19% and SH is up 21%.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>If the stock market continues to decline after purchasing a bear fund, gains can be much more than you might expect due to progressively larger dollar changes based on the increasing value of the investment. On the other hand, if the stock market rises persistently after a bear fund is purchased, the daily percentage changes result in progressively smaller dollar changes as the value of the investment decreases. Hence, investors lose less than they might expect when the fund’s return over the course of the rally is calculated.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>This point is illustrated in the graphs at right, which show the S&amp;P 500 and SH after the stock market peak in October 2007. Clearly, bear funds can serve as valuable “insurance” in a declining market, even if the position is held past the market bottom. <strong>One important note:</strong> bear fund performance in trendless, volatile markets is less predictable than in markets persistently trending up or down. In fact, due to compounding effects, an inverse index fund may even decline as the market remains flat.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"align\":\"center\",\"id\":4802,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/SH_SP500_07_10.png\" alt=\"S&amp;P 500 and SH after the stock market peak in October 2007\" class=\"wp-image-4802\"/><figcaption>S&amp;P 500 and SH after the stock market peak in October 2007</figcaption></figure></div>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why don’t you use a leveraged bear fund?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A leveraged bear fund is designed to go up two or three times as much as its benchmark goes down on a daily basis. “More” might sound better to the average investor; however, trying to time bear markets or corrections rarely works, and one can easily get burned with leveraged funds if the market doesn\'t move as anticipated and the compounding effect is magnified. With this in mind, we’d avoid the leveraged bear market funds due to the increased volatility and risk.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Summary: A Safety-first Approach</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Bear market funds should be used to neutralize portfolio risk and help you sleep at night – not as a tool for speculative short-term trading. With a safety-first investment strategy, an inverse index fund can serve as an effective, low cost insurance offering an efficient way to offset rising market risk and reduce portfolio volatility. When considering a bear fund, the following guidelines should be helpful:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Use bear funds as an insurance to offset a portion of your portfolio investments.</li><li>Stay with the passively managed bear funds that inversely correlate with the broader indexes.</li><li>Choose the larger more liquid funds with longer track records.</li><li>Gradually implement a bear fund position as a bear market becomes more likely.</li><li>Do not use leveraged funds.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>If bear funds are not an option for your portfolio, the alternative is to reduce your long positions to reach the target “net” allocation and hold the balance in cash.</p>\n<!-- /wp:paragraph -->','The \"Bare Necessities\" About Bear Funds','','inherit','closed','closed','','2457-revision-v1','','','2021-01-26 19:07:18','2021-01-26 19:07:18','',2457,'https://ns2020-investech.investech.com/2457-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4981,3,'2021-01-26 19:07:40','2021-01-26 19:07:40','<!-- wp:paragraph -->\n<p>Managing risk in the final stages of a market cycle is vitally important for preserving capital and generating superior long-term investment returns. With a safety-first investment strategy, the first line of defense for protecting assets is to selectively take profits off the table and hold the proceeds in cash. Adjusting stock and sector weightings toward more resilient areas of the market can also fortify a portfolio. When bear market warning flags begin to wave, adding a bear fund can further reduce exposure to downside market movements and lower portfolio volatility.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Bear Fund Fundamentals</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A bear fund is a mutual fund or exchange-traded fund (ETF) designed to increase in value as the market drops. Conversely, the fund will lose value when the market rises. The original bear market mutual funds have been around since the mid-1990s, and several bear fund ETFs following the same principles were incepted just over a decade ago, prior to the last bear market. At InvesTech Research, the primary reason for using a bear fund is as an “insurance policy” to offset potential losses in core holdings of the portfolio during market declines. Our recommendation to add a bear fund to the Model Fund Portfolio has raised some questions from our subscribers. The most frequently asked questions –some simple, some more complex– are addressed below.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why use a bear fund instead of selling positions and raising cash?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Increasing cash in the portfolio is an important part of a defensive strategy, but there are several reasons for maintaining select long positions and partially offsetting them with the “insurance policy” of a bear market fund:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Diversification</strong>: Bear fund insurance allows you to hold onto more stocks in a portfolio, thus maintaining greater diversification while counteracting the impact of a stock or sector that doesn’t perform as anticipated.</li><li><strong>Lower portfolio volatility</strong>: Market volatility usually increases as risks rise. A strategy that manages risk is inherently less volatile, and by “neutralizing” a portion of the portfolio, volatility is reduced.</li><li><strong>Dividends</strong>: Dividend payments continue for the positions that are maintained in a portfolio.</li><li><strong>Reduce capital gains tax</strong>: In taxable accounts, selling stocks can create sizeable realized gains. Limiting sales can lessen the tax bite.</li><li><strong>Prepare for the next bull market</strong>: When risks begin to resolve and the time is right to increase market allocation, new additions for the portfolio must be properly vetted prior to purchase. In the meantime, exposure can be quickly increased by removing the bear fund, which “de-neutralizes” a portion of the portfolio to participate in the market recovery without delay.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:heading {\"level\":3} -->\n<h3>What do we mean by a “net” long position?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The “net” long position in the Model Fund Portfolio is currently 55%. But how does this all add up?</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>As illustrated in the chart at right, current holdings include 63% long funds (blue), 8% short bear fund (red), and 29% cash (yellow). The bear fund effectively “neutralizes” or offsets the impact of an equivalent position of long holdings (shaded blue area). In other words, if the long position moves down, the bear fund moves up and the return on that combination should be negligible for the day. Therefore, the net long position, or overall exposure to the equity market, is the 63% long position minus the 8% short position which is equal to a 55% “net” long position.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"align\":\"right\",\"id\":4803,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignright size-full\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/ModelPortfolioBarChart.png\" alt=\"InvesTech Model Fund Portfolio Chart\" class=\"wp-image-4803\"/><figcaption>InvesTech Model Fund Portfolio Chart</figcaption></figure></div>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why is the ProShares Short S&amp;P 500 ETF (SH) a good choice for the Model Fund Portfolio?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>We recommended SH for a number of reasons. Our portfolio holdings are based on S&amp;P 500 sectors, so it’s appropriate to select an inverse index fund correlated to this broad market Index. ProShares Short S&amp;P 500 was incepted in 2006 and has a solid track record through the last bear market. It is the largest and most liquid inverse S&amp;P 500 fund, currently holding over $1.6B in assets. We also like some of the advantages ETFs have over mutual funds such as lower expense ratios and the ability to trade throughout the day.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Finally, this fund is passively managed to inversely correlate to the Index’s daily returns. Actively managed funds typically focus on profiting from shorting individual stocks, frequently use resource holdings, and may concentrate on attempts to time the market. Performance can vary depending on the manager’s ability to pick the right stocks to short. Thus, for a safety-first strategy, a more predictable passive fund is the best choice for our purposes.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:image {\"align\":\"center\",\"id\":4801,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/bear_market_funds2.png\" alt=\"Bear Market Funds\" class=\"wp-image-4801\"/><figcaption><strong>Bear Market Alternatives</strong></figcaption></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>We’ve assembled a list of some of the larger funds that have longer track records, including both ETFs and mutual funds. Before purchasing any on the list above, you should perform your own due diligence to determine the suitability for your portfolio. Reasons for providing these additional choices include:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Some retirement accounts are limited to mutual fund investments only.</li><li>When using a passively managed fund, it’s best to choose one based on an index that most closely matches your portfolio holdings.</li><li>If you are willing to accept the added risk that comes with an actively managed fund, you may want to consider one of the total return alternatives.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>If a passive bear fund offsets the market on a daily basis, what happens over a longer period of time?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Due to the compounding of daily returns, performance over periods longer than one day will likely differ from the inverse of the target index. To demonstrate, let’s look at an exaggerated example of how compounding affects returns.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Assume that both ProShares Short S&amp;P 500 (SH) and the S&amp;P 500 start with a value of $100. On Day 1, the S&amp;P 500 loses 10% causing SH to gain 10%. The S&amp;P 500, therefore, ends Day 1 with a price of $90, while SH has grown to $110. If on Day 2 the S&amp;P 500 loses 10% again, its price drops to $81 and SH increases to $121. While achieving perfect correlation on a daily basis, after two days the S&amp;P 500 is down 19% and SH is up 21%.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>If the stock market continues to decline after purchasing a bear fund, gains can be much more than you might expect due to progressively larger dollar changes based on the increasing value of the investment. On the other hand, if the stock market rises persistently after a bear fund is purchased, the daily percentage changes result in progressively smaller dollar changes as the value of the investment decreases. Hence, investors lose less than they might expect when the fund’s return over the course of the rally is calculated.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>This point is illustrated in the graphs at right, which show the S&amp;P 500 and SH after the stock market peak in October 2007. Clearly, bear funds can serve as valuable “insurance” in a declining market, even if the position is held past the market bottom. <strong>One important note:</strong> bear fund performance in trendless, volatile markets is less predictable than in markets persistently trending up or down. In fact, due to compounding effects, an inverse index fund may even decline as the market remains flat.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"align\":\"center\",\"id\":4802,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/SH_SP500_07_10.png\" alt=\"S&amp;P 500 and SH after the stock market peak in October 2007\" class=\"wp-image-4802\"/><figcaption>S&amp;P 500 and SH after the stock market peak in October 2007</figcaption></figure></div>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why don’t you use a leveraged bear fund?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A leveraged bear fund is designed to go up two or three times as much as its benchmark goes down on a daily basis. “More” might sound better to the average investor; however, trying to time bear markets or corrections rarely works, and one can easily get burned with leveraged funds if the market doesn\'t move as anticipated and the compounding effect is magnified. With this in mind, we’d avoid the leveraged bear market funds due to the increased volatility and risk.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Summary: A Safety-first Approach</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Bear market funds should be used to neutralize portfolio risk and help you sleep at night – not as a tool for speculative short-term trading. With a safety-first investment strategy, an inverse index fund can serve as an effective, low cost insurance offering an efficient way to offset rising market risk and reduce portfolio volatility. When considering a bear fund, the following guidelines should be helpful:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Use bear funds as an insurance to offset a portion of your portfolio investments.</li><li>Stay with the passively managed bear funds that inversely correlate with the broader indexes.</li><li>Choose the larger more liquid funds with longer track records.</li><li>Gradually implement a bear fund position as a bear market becomes more likely.</li><li>Do not use leveraged funds.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>If bear funds are not an option for your portfolio, the alternative is to reduce your long positions to reach the target “net” allocation and hold the balance in cash.</p>\n<!-- /wp:paragraph -->','The \"Bare Necessities\" About Bear Funds','','inherit','closed','closed','','2457-revision-v1','','','2021-01-26 19:07:40','2021-01-26 19:07:40','',2457,'https://ns2020-investech.investech.com/2457-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4983,3,'2021-01-26 19:18:28','2021-01-26 19:18:28','<!-- wp:paragraph -->\n<p>Managing risk in the final stages of a market cycle is vitally important for preserving capital and generating superior long-term investment returns. With a safety-first investment strategy, the first line of defense for protecting assets is to selectively take profits off the table and hold the proceeds in cash. Adjusting stock and sector weightings toward more resilient areas of the market can also fortify a portfolio. When bear market warning flags begin to wave, adding a bear fund can further reduce exposure to downside market movements and lower portfolio volatility.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Bear Fund Fundamentals</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A bear fund is a mutual fund or exchange-traded fund (ETF) designed to increase in value as the market drops. Conversely, the fund will lose value when the market rises. The original bear market mutual funds have been around since the mid-1990s, and several bear fund ETFs following the same principles were incepted just over a decade ago, prior to the last bear market. At InvesTech Research, the primary reason for using a bear fund is as an “insurance policy” to offset potential losses in core holdings of the portfolio during market declines. Our recommendation to add a bear fund to the Model Fund Portfolio has raised some questions from our subscribers. The most frequently asked questions –some simple, some more complex– are addressed below.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why use a bear fund instead of selling positions and raising cash?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Increasing cash in the portfolio is an important part of a defensive strategy, but there are several reasons for maintaining select long positions and partially offsetting them with the “insurance policy” of a bear market fund:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Diversification</strong>: Bear fund insurance allows you to hold onto more stocks in a portfolio, thus maintaining greater diversification while counteracting the impact of a stock or sector that doesn’t perform as anticipated.</li><li><strong>Lower portfolio volatility</strong>: Market volatility usually increases as risks rise. A strategy that manages risk is inherently less volatile, and by “neutralizing” a portion of the portfolio, volatility is reduced.</li><li><strong>Dividends</strong>: Dividend payments continue for the positions that are maintained in a portfolio.</li><li><strong>Reduce capital gains tax</strong>: In taxable accounts, selling stocks can create sizeable realized gains. Limiting sales can lessen the tax bite.</li><li><strong>Prepare for the next bull market</strong>: When risks begin to resolve and the time is right to increase market allocation, new additions for the portfolio must be properly vetted prior to purchase. In the meantime, exposure can be quickly increased by removing the bear fund, which “de-neutralizes” a portion of the portfolio to participate in the market recovery without delay.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"60%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:60%\"><!-- wp:heading {\"level\":3} -->\n<h3>What do we mean by a “net” long position?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The “net” long position in the Model Fund Portfolio is currently 55%. But how does this all add up?</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>As illustrated in the chart at right, current holdings include 63% long funds (blue), 8% short bear fund (red), and 29% cash (yellow). The bear fund effectively “neutralizes” or offsets the impact of an equivalent position of long holdings (shaded blue area). In other words, if the long position moves down, the bear fund moves up and the return on that combination should be negligible for the day. Therefore, the net long position, or overall exposure to the equity market, is the 63% long position minus the 8% short position which is equal to a 55% “net” long position.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"align\":\"right\",\"id\":4803,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignright size-full\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/ModelPortfolioBarChart.png\" alt=\"InvesTech Model Fund Portfolio Chart\" class=\"wp-image-4803\"/><figcaption>InvesTech Model Fund Portfolio Chart</figcaption></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why is the ProShares Short S&amp;P 500 ETF (SH) a good choice for the Model Fund Portfolio?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>We recommended SH for a number of reasons. Our portfolio holdings are based on S&amp;P 500 sectors, so it’s appropriate to select an inverse index fund correlated to this broad market Index. ProShares Short S&amp;P 500 was incepted in 2006 and has a solid track record through the last bear market. It is the largest and most liquid inverse S&amp;P 500 fund, currently holding over $1.6B in assets. We also like some of the advantages ETFs have over mutual funds such as lower expense ratios and the ability to trade throughout the day.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Finally, this fund is passively managed to inversely correlate to the Index’s daily returns. Actively managed funds typically focus on profiting from shorting individual stocks, frequently use resource holdings, and may concentrate on attempts to time the market. Performance can vary depending on the manager’s ability to pick the right stocks to short. Thus, for a safety-first strategy, a more predictable passive fund is the best choice for our purposes.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:image {\"align\":\"center\",\"id\":4801,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/bear_market_funds2.png\" alt=\"Bear Market Funds\" class=\"wp-image-4801\"/><figcaption><strong>Bear Market Alternatives</strong></figcaption></figure></div>\n<!-- /wp:image -->\n\n<!-- wp:paragraph -->\n<p>We’ve assembled a list of some of the larger funds that have longer track records, including both ETFs and mutual funds. Before purchasing any on the list above, you should perform your own due diligence to determine the suitability for your portfolio. Reasons for providing these additional choices include:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Some retirement accounts are limited to mutual fund investments only.</li><li>When using a passively managed fund, it’s best to choose one based on an index that most closely matches your portfolio holdings.</li><li>If you are willing to accept the added risk that comes with an actively managed fund, you may want to consider one of the total return alternatives.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>If a passive bear fund offsets the market on a daily basis, what happens over a longer period of time?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Due to the compounding of daily returns, performance over periods longer than one day will likely differ from the inverse of the target index. To demonstrate, let’s look at an exaggerated example of how compounding affects returns.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Assume that both ProShares Short S&amp;P 500 (SH) and the S&amp;P 500 start with a value of $100. On Day 1, the S&amp;P 500 loses 10% causing SH to gain 10%. The S&amp;P 500, therefore, ends Day 1 with a price of $90, while SH has grown to $110. If on Day 2 the S&amp;P 500 loses 10% again, its price drops to $81 and SH increases to $121. While achieving perfect correlation on a daily basis, after two days the S&amp;P 500 is down 19% and SH is up 21%.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>If the stock market continues to decline after purchasing a bear fund, gains can be much more than you might expect due to progressively larger dollar changes based on the increasing value of the investment. On the other hand, if the stock market rises persistently after a bear fund is purchased, the daily percentage changes result in progressively smaller dollar changes as the value of the investment decreases. Hence, investors lose less than they might expect when the fund’s return over the course of the rally is calculated.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>This point is illustrated in the graphs at right, which show the S&amp;P 500 and SH after the stock market peak in October 2007. Clearly, bear funds can serve as valuable “insurance” in a declining market, even if the position is held past the market bottom. <strong>One important note:</strong> bear fund performance in trendless, volatile markets is less predictable than in markets persistently trending up or down. In fact, due to compounding effects, an inverse index fund may even decline as the market remains flat.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"align\":\"center\",\"id\":4802,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/SH_SP500_07_10.png\" alt=\"S&amp;P 500 and SH after the stock market peak in October 2007\" class=\"wp-image-4802\"/><figcaption>S&amp;P 500 and SH after the stock market peak in October 2007</figcaption></figure></div>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>Why don’t you use a leveraged bear fund?</h3>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>A leveraged bear fund is designed to go up two or three times as much as its benchmark goes down on a daily basis. “More” might sound better to the average investor; however, trying to time bear markets or corrections rarely works, and one can easily get burned with leveraged funds if the market doesn\'t move as anticipated and the compounding effect is magnified. With this in mind, we’d avoid the leveraged bear market funds due to the increased volatility and risk.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:heading -->\n<h2>Summary: A Safety-first Approach</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>Bear market funds should be used to neutralize portfolio risk and help you sleep at night – not as a tool for speculative short-term trading. With a safety-first investment strategy, an inverse index fund can serve as an effective, low cost insurance offering an efficient way to offset rising market risk and reduce portfolio volatility. When considering a bear fund, the following guidelines should be helpful:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li>Use bear funds as an insurance to offset a portion of your portfolio investments.</li><li>Stay with the passively managed bear funds that inversely correlate with the broader indexes.</li><li>Choose the larger more liquid funds with longer track records.</li><li>Gradually implement a bear fund position as a bear market becomes more likely.</li><li>Do not use leveraged funds.</li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>If bear funds are not an option for your portfolio, the alternative is to reduce your long positions to reach the target “net” allocation and hold the balance in cash.</p>\n<!-- /wp:paragraph -->','The \"Bare Necessities\" About Bear Funds','','inherit','closed','closed','','2457-revision-v1','','','2021-01-26 19:18:28','2021-01-26 19:18:28','',2457,'https://ns2020-investech.investech.com/2457-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4986,3,'2021-01-26 20:11:18','2021-01-26 20:11:18','<!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4827,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/etf-express-cartoon/\",\"mediaType\":\"image\",\"mediaWidth\":41} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 41%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/ETF-Express-Cartoon.png\" alt=\"\" class=\"wp-image-4827 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4829,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/number-of-etfs/\",\"mediaType\":\"image\",\"mediaWidth\":22} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 22%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaId\":4831,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/active-vs-passive-stock-funds-inflows/\",\"mediaType\":\"image\"} -->\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4839,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/total-assets-domestic-equity-index-funds/\",\"mediaType\":\"image\",\"mediaWidth\":33} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 33%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4840,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/v99i04/\",\"mediaType\":\"image\",\"mediaWidth\":27} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 27%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer {\"height\":42} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:11:18','2021-01-26 20:11:18','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4988,3,'2021-01-26 20:21:20','2021-01-26 20:21:20','','rollercoaster','','inherit','open','closed','','rollercoaster','','','2021-01-26 20:21:20','2021-01-26 20:21:20','',2468,'https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png',0,'attachment','image/png',0);
INSERT INTO `wp_posts` VALUES (4989,3,'2021-01-26 20:21:25','2021-01-26 20:21:25','<!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4827,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/etf-express-cartoon/\",\"mediaType\":\"image\",\"mediaWidth\":41} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 41%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/ETF-Express-Cartoon.png\" alt=\"\" class=\"wp-image-4827 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4829,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/number-of-etfs/\",\"mediaType\":\"image\",\"mediaWidth\":22} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 22%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaId\":4831,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/active-vs-passive-stock-funds-inflows/\",\"mediaType\":\"image\"} -->\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4839,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/total-assets-domestic-equity-index-funds/\",\"mediaType\":\"image\",\"mediaWidth\":33} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 33%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4840,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/v99i04/\",\"mediaType\":\"image\",\"mediaWidth\":27} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 27%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer {\"height\":42} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:21:25','2021-01-26 20:21:25','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4991,3,'2021-01-26 20:25:37','2021-01-26 20:25:37','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4829,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/number-of-etfs/\",\"mediaType\":\"image\",\"mediaWidth\":41} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 41%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaId\":4831,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/active-vs-passive-stock-funds-inflows/\",\"mediaType\":\"image\"} -->\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4839,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/total-assets-domestic-equity-index-funds/\",\"mediaType\":\"image\",\"mediaWidth\":33} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 33%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4840,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/v99i04/\",\"mediaType\":\"image\",\"mediaWidth\":27} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 27%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer {\"height\":42} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:25:37','2021-01-26 20:25:37','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4992,3,'2021-01-26 20:26:10','2021-01-26 20:26:10','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4829,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/number-of-etfs/\",\"mediaType\":\"image\",\"mediaWidth\":26} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 26%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaId\":4831,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/active-vs-passive-stock-funds-inflows/\",\"mediaType\":\"image\"} -->\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4839,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/total-assets-domestic-equity-index-funds/\",\"mediaType\":\"image\",\"mediaWidth\":33} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 33%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4840,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/v99i04/\",\"mediaType\":\"image\",\"mediaWidth\":27} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 27%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer {\"height\":42} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:26:10','2021-01-26 20:26:10','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4994,3,'2021-01-26 20:28:59','2021-01-26 20:28:59','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"60%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:60%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4829,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaId\":4831,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/active-vs-passive-stock-funds-inflows/\",\"mediaType\":\"image\"} -->\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4839,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/total-assets-domestic-equity-index-funds/\",\"mediaType\":\"image\",\"mediaWidth\":33} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 33%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4840,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/v99i04/\",\"mediaType\":\"image\",\"mediaWidth\":27} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 27%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer {\"height\":42} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:28:59','2021-01-26 20:28:59','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4996,3,'2021-01-26 20:39:48','2021-01-26 20:39:48','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4829,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaId\":4831,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/active-vs-passive-stock-funds-inflows/\",\"mediaType\":\"image\"} -->\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4839,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/total-assets-domestic-equity-index-funds/\",\"mediaType\":\"image\",\"mediaWidth\":33} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 33%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4840,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/v99i04/\",\"mediaType\":\"image\",\"mediaWidth\":27} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 27%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer {\"height\":42} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:39:48','2021-01-26 20:39:48','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (4998,3,'2021-01-26 20:41:32','2021-01-26 20:41:32','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4829,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:media-text {\"mediaId\":4831,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/active-vs-passive-stock-funds-inflows/\",\"mediaType\":\"image\"} -->\n<div class=\"wp-block-media-text alignwide is-stacked-on-mobile\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4839,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/total-assets-domestic-equity-index-funds/\",\"mediaType\":\"image\",\"mediaWidth\":33} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 33%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\",\"fontSize\":\"large\"} -->\n<p class=\"has-large-font-size\"></p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:media-text {\"mediaPosition\":\"right\",\"mediaId\":4840,\"mediaLink\":\"https://ns2020-investech.investech.com/subscriber-library/passing-investing-etfs-an-inevitable-black-eye/v99i04/\",\"mediaType\":\"image\",\"mediaWidth\":27} -->\n<div class=\"wp-block-media-text alignwide has-media-on-the-right is-stacked-on-mobile\" style=\"grid-template-columns:auto 27%\"><figure class=\"wp-block-media-text__media\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840 size-full\"/></figure><div class=\"wp-block-media-text__content\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph -->\n\n<!-- wp:spacer {\"height\":42} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph --></div></div>\n<!-- /wp:media-text -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:41:32','2021-01-26 20:41:32','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (5000,3,'2021-01-26 20:45:28','2021-01-26 20:45:28','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4829,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4831,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4839,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4840,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:45:28','2021-01-26 20:45:28','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (5001,3,'2021-01-26 20:47:07','2021-01-26 20:47:07','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4829,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4831,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4839,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"\"} -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4840,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-738x1024.png\" alt=\"\" class=\"wp-image-4840\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:47:07','2021-01-26 20:47:07','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (5003,3,'2021-01-26 20:47:49','2021-01-26 20:47:49','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4829,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4831,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4839,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"\"} -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4840,\"width\":175,\"sizeSlug\":\"medium\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-medium is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-216x300.png\" alt=\"\" class=\"wp-image-4840\" width=\"175\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:47:49','2021-01-26 20:47:49','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
INSERT INTO `wp_posts` VALUES (5004,3,'2021-01-26 20:48:16','2021-01-26 20:48:16','<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:pullquote -->\n<figure class=\"wp-block-pullquote\"><blockquote><p>Tempted by high-flying ETFs in this aging bull market? Just remember… Excitement is highest as the roller coaster goes over the top!</p></blockquote></figure>\n<!-- /wp:pullquote --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4988,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2021/01/rollercoaster.png\" alt=\"\" class=\"wp-image-4988\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"100%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:100%\"><!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In today’s technologically advanced world, featuring self-driving cars, pilotless airplanes, and smart homes, a “hands-off” trend is also gaining popularity among the investing public. As indicated by the headlines below, passive index investing has become all the rage, and Exchange Traded Funds (ETFs) are the tool of choice:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>ETFs could see $1 trillion in inflows over the coming year</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Small investors’ move to ‘passive’ stock funds becomes a stampede</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Global ETF assets reach $4tn</strong> <em>The global exchange traded fund industry smashed past $4tn in assets last month…</em></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph {\"placeholder\":\"Content…\"} -->\n<p>And our personal favorite</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Wheee! A Quadruple-Leveraged S&amp;P 500 ETF is Here</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The first Exchange Traded Fund (ETF) was launched in 1993, and although they were slow to start, ETFs have proliferated over the last decade, both in number (see graph at right) and the variety of index funds available. There’s now an ETF for nearly every strategy, no matter how esoteric, and that has helped fuel the passive investing craze.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4829,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/number-of-etfs.png\" alt=\"\" class=\"wp-image-4829\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p></p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer {\"height\":89} -->\n<div style=\"height:89px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"66.66%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:66.66%\"><!-- wp:image {\"id\":4831,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Active-vs-Passive-Stock-Funds-Inflows.png\" alt=\"\" class=\"wp-image-4831\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:paragraph -->\n<p>Over the past 24 years, one can see the shift in interest from actively managed mutual funds toward passive investing. As shown in the graph at left, net cash flows into actively managed funds were still four times larger than passive funds from 1993 through 2000. From 2001 through 2008, a change becomes evident as net cash flows for active funds turned negative while passive funds continued to grow. The disparity between the active and passive net cash flows during the current bull market (2009-2016) is remarkable, and it shows why there’s been a parabolic increase in the number of ETFs!</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:spacer -->\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"></div>\n<!-- /wp:spacer -->\n\n<!-- wp:paragraph -->\n<p><strong>So why has passive investing become all the rage in recent years?</strong><br>Many investors have been burned –not once, but twice– by the Tech Bubble of the 1990s and the Housing Bubble in 2007. Also, they are frustrated with the challenges of managing investments… a task that in this uncertain bull market has frequently seemed counterproductive.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The most popular index funds are touted as low-cost and broadly diversified, with a portfolio full of blue chip stocks. Moreover, ETFs offer “instant liquidity” with intraday trading compared to mutual funds that only settle at the end of each trading day. To the average investor, passive funds with minimal fees, implied safety, and lots of liquidity may appear to be the Holy Grail. As we’ll see, however, there is more to the story…</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>“Excitement is Highest as the Roller Coaster Goes Over the Top”</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>Just as the number of ETFs has grown, the past few years have witnessed an explosion in assets tied to passive investing that has extended to both mutual funds and ETFs (as shown in graph at right). A large part of the growth has been in ETFs, which are poised to overtake index mutual funds as the preferred indexing vehicle. Both types of products have doubled in assets just since 2012.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>It is important to recognize that passive investing is not a fresh new idea; in fact, the concept was introduced by John Bogle (the founder of Vanguard) in the 1970s. This strategy has shifted in and out of favor, becoming more popular as bull markets age and losing its luster only after the damage has been done by the next bear market. Just like riding a roller coaster, the peak in public enthusiasm often comes as the bull market is cresting the top.</p>\n<!-- /wp:paragraph --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:image {\"id\":4839,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/Total-Assets-Domestic-Equity-Index-Funds.png\" alt=\"\" class=\"wp-image-4839\"/></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:heading -->\n<h2>A Trip back in Time…</h2>\n<!-- /wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The rise in the popularity of index funds has been seen before.</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>It’s like deja vu all over again.</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:paragraph -->\n<p>The late 1990s: As the decade of the 1990s became the longest bull market in Wall Street history, the Tech Bubble wasn’t the only phenomenon catching investors’ attention. In 1998-99, headlines were touting the benefit of index investing as inflows reached record levels:</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Saving for Retirement Index Fever</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column -->\n<div class=\"wp-block-column\"><!-- wp:list -->\n<ul><li><strong>Who Needs a Money Manager?</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:columns -->\n<div class=\"wp-block-columns\"><!-- wp:column {\"width\":\"\"} -->\n<div class=\"wp-block-column\"><!-- wp:paragraph -->\n<p>In March 1999, we published the issue shown at right, comparing the emotional influx of index investors to lemmings. However, instead of falling off a cliff, index investors fell into the largest bear market since the 1930s (the S&amp;P 500 Index lost -49.1%).</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>2006-07: Index investing was even more popular at the peak of the last bull market (also one of the longer bull markets of the past 80 years):</p>\n<!-- /wp:paragraph -->\n\n<!-- wp:list -->\n<ul><li><strong>Index Funds: So Hot Right Now</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Index funds help you avoid risks of stock selection, market timing</strong></li></ul>\n<!-- /wp:list -->\n\n<!-- wp:list -->\n<ul><li><strong>Owning the S&amp;P 500 is cheap, easy and smart</strong></li></ul>\n<!-- /wp:list --></div>\n<!-- /wp:column -->\n\n<!-- wp:column {\"width\":\"33.33%\"} -->\n<div class=\"wp-block-column\" style=\"flex-basis:33.33%\"><!-- wp:image {\"id\":4840,\"width\":137,\"height\":201,\"sizeSlug\":\"medium\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-medium is-resized\"><img src=\"https://ns2020-investech.investech.com/wp-content/uploads/2020/12/V99I04-216x300.png\" alt=\"\" class=\"wp-image-4840\" width=\"137\" height=\"201\"/><figcaption>March 1999 Issue</figcaption></figure>\n<!-- /wp:image --></div>\n<!-- /wp:column --></div>\n<!-- /wp:columns -->\n\n<!-- wp:paragraph -->\n<p>In these previous periods, much like today, most investors perceived index funds – particularly the S&amp;P 500 Index funds – to be more diversified, safer investments. In the next two pages, we’ll discuss why index funds may not be all they’re thought to be…</p>\n<!-- /wp:paragraph -->','Passive Investing: Inevitable Black Eye','','inherit','closed','closed','','2468-revision-v1','','','2021-01-26 20:48:16','2021-01-26 20:48:16','',2468,'https://ns2020-investech.investech.com/2468-revision-v1/',0,'revision','',0);
