The Stress Test - What Does It Mean and What Is So Funny About The Results?

The Fed completed its annual “stress test” of bank’s financial health.  So what does that mean to us and our clients?  And, what is so contradictory about these results?

When you custodian your assets (the location that actually holds your assets) you want the organization to be sound and viable in the worst of times.  You want your assets accessible when you need them.  So, holding assets with custodians that at least meet these Fed criteria appears wise and preferably you would like to be at the top of this list.  Not all banks on this list custodian investment assets.  But, it is nice to see the Bank of New York Mellon at the top of the custodians, where we custodian most of our assets.

What is so funny about the results is that some of the Banks on the bottom of this list had an ad campaign a few years ago describing that they are so big and strong that their clients had better access to financial products.  Based on these and prior results that does not appear to be the case.  Any time someone tells you that they have better access or proprietary investments, consider that as a signal that you need to find another adviser.

Read The Full Article   (or search the title "Fed Stress Tests Find Banks Adequately Capitalized")

Price Risk to MLPs

A popular investment of late has been MLPs.  For income seeking investors the low interest rate environment has limited many safer more secure options, and it appears many have chosen to seek income in MLPs.  However, with the recent price cut in oil, many of these price dependent oil and gas projects and services might struggle to maintain their income and begin to realize the risk portion of the equation and mistakes made in the gaining popularity.

Read the Full Article

2014 Review on Where to Stash Cash

It is always a bit of a conundrum strategizing for your short term cash needs, but especially exasperating domestically because of the “feds” recent actions and the low interest environment.  So, it is nice to see this article from Annamaria Andriotis highlighting and describing some of the basic options.

Read this Article

This article links to Wall Street Journal (WSJ).  Occasionally the WSJ limits access to subscribers based on its marketing strategy.  Often, if the link requires subscriber access, you can “search” the original title of the article and gain access through your search function, where apparently the WSJ allows access.

Why Funds Fees Barely Budge


This article addresses the common complaint we hear from many new clients, “my investments never seem to go anywhere?”  Although the article does not directly state your investments are going nowhere because of the management and turnover costs you’re paying, it certainly does indicate that it could be a large deterrent and an attribution that remains hidden to many investors.

Read The Full Article

Workers Come Out Winners Even After 401(k) Lawsuits Are Losers


An article that describes the high stakes game being played between the employer and the service providers of a qualified plan, such as 401ks, and the potential liabilities these groups create by ignoring the general interest of the employee.  But, what should also be noted is the interests of these groups are not aligned and as each group stake gets larger, it becomes more important to have your interest represented by an expert.

Read The Full Article

Are You Brilliant, or Lucky?

Jason Zweig calls you either Lucky or Brilliant, when you beat the market.  We might differ in our approach and say instead you were “fooled by randomness” as described in Nassim Talelb’s book.  Either way, we could not agree more with Jason’s conclusions that focus on the structure, process and interests far outweighs historical performance.

Read The Full Article