“Well, Jane, it just goes to show you, it’s always something – if it ain’t one thing, it’s another.”
– Roseanne Roseannadanna
In one form or another, whether in our quarterly commentaries, market updates, our annual Investment Perspectives, or in direct communication with our clients, the RGT investment team has been consistent in our stance that predicting the future is monumentally difficult, if not impossible. So when we actually make a prediction, and it turns out to be correct, we feel it’s worth noting. We ended our last quarterly commentary with, “One thing of which we can be reasonably certain: there will be something interesting to write about next quarter.” I think we can all agree that we nailed that one.
While 2016 was shaping up to be a good year for U.S. equities, entering the fourth quarter, following President-elect Trump’s surprising victory, domestic stock markets roared even higher. The best performing asset class, for both the quarter and the year, was U.S. small-cap stocks. As measured by the Russell 2000 Index, small-cap stocks shot up 8.83% in the fourth quarter and ended the year up 21.31%. That was quite a rebound for small-cap stocks, which returned -5.71% in 2015. This speaks to the volatility that investors in small-cap stocks have faced over the last 10 years. Since 2007, small-cap stocks have returned a compounded average of 5.75% per year. But, to realize that return, investors had to endure four years of negative returns (2007, 2008, 2011, and 2015); the worst, of course, was 2008 when the Russell 2000 was down -34.8%. It is important to remain invested through these downturns, as illustrated by the fact that those four years of negative returns have been offset by four years of positive returns exceeding 20% (2009, 2010, 2013, and 2016); the best of which was 2013 when the Russell 2000 was up 37.0%.
Large-cap U.S. Stocks, as represented by the S&P 500, rose more modestly in the fourth quarter, up 3.82% to end the year with a respectable 11.96% return. Stock markets in the rest of the world did not fare so well. The MSCI-EAFE Index, which represents the performance of large- and mid-cap securities across 21 developed markets, was down -0.71% in the fourth quarter and up only 1.0% for the year. Representative of all global equity markets, with performance of large- and mid-cap securities across 23 developed markets and 23 emerging markets, the MSCI-ACWI Index was up 1.27% in the fourth quarter and 8.36% for the year.
But, as Rosanne Roseannadanna noted, it’s always something. And in the fourth quarter of 2016, that something was bonds. Bond investors endured a roller coaster ride in 2016. The 10-Year Treasury rate began the year at 2.24%, but proceeded to fall throughout the first half of the year, bottoming out a 1.37% on July 5th. However, following the November election, interest rates soared, with the 10-Year Treasury peaking at 2.6% before settling at 2.45% at yearend. As a result, bond markets sold off, with the Bloomberg/Barclays U.S. Aggregate Index down -2.98% in the fourth quarter. Municipal bonds didn’t fare much better, down -2.63% for the quarter, and -0.39% for the year.
If 2016 didn’t illustrate the importance of owning a diversified portfolio, then just wait. We’re sure to get another great example, at some point, in the not-so-distant future.
At first glance the word phishing may appear to be a typo referring to a beloved hobby, but in the world of cyber security, phishing is a serious threat to your financial security.
What is Phishing?
Phishing attacks are techniques used by cybercriminals to manipulate computer users into revealing sensitive information or installing malware by way of electronic communication.
What to look for?
Phishing email messages are designed to trick an individual to act upon a request without raising suspicion. The emails usually contain a sense of urgency (past due notice, action required, transaction on hold, etc.). These notices are designed to peak curiosity and prompt you to log in to investigate. This login process will look and feel familiar but in reality you are in a hoax site – designed to steal your credentials and personal information in order to gain access to your accounts.
These emails could contain personal information and may even list co-workers or family members depending on the level of sophistication. Much of this information is available publicly and will often be used to validate the scam.
Look for items like attachments, spoofed links, spoofed websites, grammatical errors, urgent statements, vague language, misspelled words and poor graphics. Larger and legitimate companies have professional staff that spend a great deal of effort on clean, well-formatted communication. If the email does not look like the quality you are accustomed to, then it is likely to be fake.
Text phishing is becoming more popular. Similar to email, be wary of any link or instructions received via text. Choose another method to communicate and verify the identity of the sender. Even if the number matches a contact in your phone, they could be a cybercriminal who has spoofed or deceived a known number.
Phone call threats are still very active. No legitimate firm or organization uses a phone call to gain information. Most, if not all, of these calls are fraudulent. There is usually an urgency to the call (past due, collections, safety risk, and insurance need).
The need for information to satisfy a demand is paramount and the caller can usually be quite persuasive. Get a case number and call the individual back on an official number. Do not give personal information out over the phone before you verify their identity.
Beware of friend or follower requests from individuals you do not know. Many scammers try to gain access to some personal information through your social media accounts. By allowing them to see more of your private information and activities, they have a better chance to phish for additional information.
Some requests might come from a replica account of someone you are already sharing with. The scammer will steal a few photos and create a sight that looks like the site of an established friend.
Once a contact has been established, the scammers will post links or bogus posts with the intent of stealing your information. Even legitimate friends may forward or share these links unknowingly. Stay suspicious of any and all links and posts in social media circles.
How can you protect yourself?
- Be suspicious of any unsolicited opportunity or communication. If you were not expecting it, then do not trust it until you have verified the source.
- Don’t click links or attachments without first understanding what it is and why you are clicking it. We have become accustomed to clicking things that come our way. The scammers trust that this habit will continue. Break the clicking habit and replace it with healthy skepticism.
- Directly contact the sender or the firm. Reach out via known contacts. Official websites, phone numbers, and email addresses are safe to vet the suspicious activity. Do not use links or contact info within the email, text, or social media post.
- Report all incidents. If you have been contacted fraudulently in any form, notify the individual or organization that has been spoofed. This will allow them to warn their other clients/contacts to prevent any resultant activity.
Financial Planning ranks RGT 10th largest in nation
DALLAS – The Dallas-based financial planning and investment advisory firm RGT Wealth Advisors has been recognized among the top 10 Registered Investment Advisory (RIA) firms in the country by Financial Planning magazine.
Based on the size of assets under its management, RGT was named the 10th largest firm on the magazine’s sixth annual ranking of the nation’s top 150 RIA firms. RGT is the largest of the seven Texas-based firms on the 2017 listing.
For more information about RGT Wealth Advisors, click here: http://rgtadvisors.com/.
Financial Planning, the only publication dedicated to independent financial planners, bases its annual rankings on the total discretionary and nondiscretionary assets under management as listed on SEC Form ADV as of November 2016.
“From the start, the cornerstone of this firm has been the relationship we build with clients and our ability to provide a personal approach to their wealth management goals,” said RGT Managing Director and Founding Partner Mark Griege. “For us, it’s all about service, integrity and professionalism. We do not stray from those tenets. As a result, we have gained the respect of our clients and the profession, enabling us to continue to grow in an evolving investment environment.”
Founded in 1985, RGT is an independent, fee-only firm that provides wealth advisory services, portfolio management and family office services. Although the 2017 selection marks the first time the firm has earned recognition among the top 10 RIA Leaders, it was recognized by Financial Planning in 2014 as the 12th “Fastest Growing RIA Firm.”
The firm is consistently ranked among the Top Wealth Managers in Dallas by D Magazine. Mr. Griege and Managing Director Todd Amacher have each been named to the prestigious Dallas 500 listing of the most powerful business leaders in Dallas-Fort Worth in the area of Banking and Finance/Investments.
RGT Wealth Advisors is a financial planning and investment advisory firm based in Dallas, Texas, with more than 30 years of experience in managing finances and investments for high net-worth individuals and families.
For more information about RGT Wealth Advisors, contact Managing Director Colleen Affeldt at 214-360-7000.