[x_custom_headline type=”center” level=”h2″ looks_like=”h3″ accent=”true”]Firm Update[/x_custom_headline]
As we start the New Year and look back over the last year we want to thank all the individual investors and families that came on-board as clients in 2015. With the equity and fixed income markets performing sluggishly in 2015 more investors than expected came to us seeking tailored investment guidance as well as a new approach in 2016. Even though the broad markets struggled last year, we were still able to find pockets of performance in certain equity industry groups. We have also identified a few segments of the bond market where we could find yield without sacrificing credit quality.
As we start 2016, the firm looks forward to continuing providing unbiased investment advice and planning for our clients. As an independent RIA firm we are not limited in our investment product selection.We are free from the pressure to make recommendations based on the influence of a brokerage firm, bank and or institution. We work with only the most tax efficient, liquid, transparent and low cost investment products available and on the industry’s leading technology platform Every investor should have access to institutional quality products, fee only advice and have their assets on an industry’s leading custody platform.
[x_custom_headline type=”center” level=”h2″ looks_like=”h3″ accent=”true”]Market Commentary[/x_custom_headline]
I hope and trust everyone had a great holiday season.
Looking back at 2015, I’d have to say that we should be happy it’s over. No single asset class or sector outperformed relative to historical averages. The S&P 500 finished the year up only1% due to its dividend yield. The Bond markets struggled on fears of the Federal Reserve raising interest rates (which we continue to believe will be a good thing over time). Real Estate values through most of the country were stagnant in all but a few major metropolitan areas. Oil Markets continued to lay witness to a freefall in prices as OPEC decided to flood the markets in order to maintain sovereign cash flows. Other commodities lost value as China’s economy finally started to come back to earth. Hedge funds, often considered the “Smart Money”, which historically have done well in flat and down markets returned on average a meager 1.4%. Even cash, considered the safest part of the market (money markets and short treasuries) saw near negative performance relative to inflation.
In summary, we feel that staying prudently invested and well diversified through 2016 will continue to produce returns for our clients. 2016 should reward those who focus on the fundamentals in their portfolios and stick to a well laid out investment plan.Click here for a more in depth look at our outlook for 2016.[x_custom_headline type=”center” level=”h2″ looks_like=”h3″ accent=”true”]Product Commentary[/x_custom_headline]
At CRA we continue to focus on building individual custom portfolios based on a client’s age, risk profile and liquidity needs. One critical component of every portfolio and each client experience is the custodian. While we are open to working with a client’s custodian of choosing (State Street, Fidelity, Merrill, TD Ameritrade etc) we have come to rely on and have found a great partner in Schwab. Charles Schwab serves millions of individual investors who invest on their own, through a workplace retirement plan, or in the case of Copper River Advisors those investors who work with an independent financial advisor or RIA. Here are a few facts on Schwab.
–9.3 million active investment accounts
–1.3 million retirement plan participants
–20th Largest U.S Bank
Independent Advisor Services-Provides trading, custody, technology, practice management and other support services to nearly 7,000 independent investment advisors whose assets represent 1.4 Trillion at Schwab.
CEO Walt Bettinger’s recent post on the RIA business and Schwabs relationship to the industry.
ETF Flows in 2015
ETfs continued to grow in assets in 2015 and the numbers speak for themselves. In 2015 ETFs took in $238 billion in new assets, which was just short of the record of $243 billion set in 2014. No other structured investment product came even close. In 2015 ETFs brought in more assets than mutual funds and hedge funds combined.Here are a few insights into the flows of 2015.
International ETFs took in nearly half of all assets. Of that half a large percentage was allocated to currency hedged products that are structured to minimize currency volatility.Three of the largest gainers being DBEF, HEZU, HEDJ.
Low cost and smart beta ETFs picked up considerable assets.We will discuss the smart beta ETF space in an upcoming monthly newsletter.
529 and 401k Plans
One final note. Our goal for this newsletter is to keep it short in length and keep you informed on some of the ideas, products, knowledge and market experience that is the basis of the firm. Please provide any feedback you may have on this newsletter, and please feel free to contact us at any time.
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