Monday, August 15News That Matters
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Do you understand exchange-traded funds? Here are some investing tips

Do you understand exchange-traded funds? Here are some investing tips

Finance
Many analysts are predicting that exchange-traded funds will continue to sweep up assets in 2017. ETFs recorded $ 288.6 billion of inflows in 2016 and closed the year with nearly $ 3 trillion in assets under management.Traded on exchanges just like stocks, these index-tracking investments have attracted investors with their trading flexibility, low costs and tax efficiency. Yet how well do investors actually understand the funds they're buying?As with any investment, advisors and individual investors should be ready to undertake careful due diligence before buying an ETF. One common source of confusion when it comes to these funds is that there are often sizable discrepancies between ETFs whose naming conventions sound very similar yet utilize very different approaches in terms of how they...
Britain’s political outlook seems toxic to investors

Britain’s political outlook seems toxic to investors

Finance
SUDDENLY Britain looks a lot less attractive as a home for international investors. The Conservative party under Theresa May gambled on a snap election to deliver a "mandate for Brexit". It unveiled a muddled manifesto that alienated voters and was out-campaigned by the veteran left-winger Jeremy Corbyn. The party lost its overall majority and will now be propped up by the very odd ducks in Ulster's Democratic Unionist party.The markets reacted less severely than might have been expected. That seems to be based on the view that a "soft Brexit" looks more likely. But it is far from clear that this is the case. David Davis, Britain's Brexit minister, seems to be ploughing ahead with plans to leave the single market and the Labour leadership is unlikely to oppose this. Moody's, the credit rat...
Swelling ranks of baby boomer retirees create negative impact on investment returns

Swelling ranks of baby boomer retirees create negative impact on investment returns

Finance
Baby boomers have been blamed for a long list of societal ills almost since the first member was born in 1946. A potentially decades-long decline in investment returns is one of the most serious charges to be laid at the generation's doorstep, and some experts think we may already be in the middle of it.Historical returns for a balanced portfolio have averaged about 8 percent annually. Between 2005 and 2050, according to a 2009 analysis, investment returns are likely to decline by about 0.9 percentage points. Economists generally agree on the driving force — the retirement and resulting change in spending and saving patterns of America's largest generation — but not the mechanism of the decline. The prevailing theory guesses retirees will depress returns by pulling money out of their 401(k...
Government actively working towards bank consolidation: Arun Jaitley

Government actively working towards bank consolidation: Arun Jaitley

Finance
NEW DELHI: The government is "actively working" towards consolidation of banks, said Finance Minister Arun Jaitley today. The meeting of top bankers with the finance minister, where ministry officials and RBI Deputy Governor S S Mundra were present, was called to take stock of lenders' financial position and speedy resolution of bad assets. "Consolidation of banks was not on the agenda as far as this present meeting is concerned. But I can tell you, we are actively working in that direction," Jaitley told reporters at a question-answer session, post first round of the discussions. "I can't give you further details because some of these are price sensitive, but you can take it that there is a movement going on in that direction," he emphasised. The minister hinted that a solution is c...
Are you a high-earning executive? Deferring compensation now could help you in retirement later

Are you a high-earning executive? Deferring compensation now could help you in retirement later

Finance
There are obviously many retirement vehicles you, as a corporate executive, have considered, but have you overlooked the option of the company-sponsored non-qualified deferred compensation plan?Significant wealth may be created in NQDC plans, where assets have the opportunity to compound tax-free and investment options are frequently attractive. Two times a year, corporate executives are offered the option of deferring a portion of their compensation in order to put away money for their retirement in these plans. Quickly approaching is the June 30 deadline for deferring variable or incentive compensation for this year.Basic modeling shows that assets invested inside a deferred compensation plan for 10 years would grow 1.75 percent more annually than the same amount invested for the same pe...