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Investors More Optimistic, But Portfolios Don’t Reflect It

Investors are more conservative in their portfolios, Jack Bogle's secret to investing and InvestCloud opens Los Angeles-based incubator.

Investors have become increasingly optimistic in their outlook on the U.S. economy and markets, yet they’re more conservative in their investment portfolios. Fifty-eight percent of investors surveyed expect economic conditions to improve over the next 12 months, up from 43 percent who had that view the previous year, according to a survey conducted by AMG Funds, the U.S. retail distribution arm of Affiliated Managers Group. Nearly two-thirds (64 percent) of investors expect U.S. stocks to rise, compared with 47 percent the year before. Yet, when it comes to their own money, investors are taking less risk. Nearly four in 10 investors describe their risk tolerance as conservative, while just 26 percent say they’re aggressive. There was also a decline in the number of investors focused on maximizing growth and returns (19 percent versus 22 percent the year before). “Investors’ forward-looking views on the economy seem to be misaligned with their current positioning within their investment portfolios,” said Jeffrey T. Cerutti, CEO of AMG Funds. “Investors with a positive view of the economic environment may wish to consider re-evaluating their allocation strategy to ensure that their investment approach is aligned with their outlook, risk tolerance, and the time horizon of their goals.”

Investing Tip: 'Just Stand There'

Copyright Carl Court, Getty Images

For his latest personal finance book, performance coach and author Tony Robbins interviewed 50 top U.S. investors, including Bridgewater Associates Founder Ray Dalio, and JP Morgan Asset Management CEO Mary Callahan Erdoes. Of all the investment strategies he discussed, Robbins said the best (and simplest) came from Vanguard founder Jack Bogle. The advice? "Tony, the secret is do nothing. Just stand there," Bogle said to Robbins. Or, more generally, invest and take advantage of compound interest.

InvestCloud Opens Fintech Incubator in LA

 

InvestCloud announced plans this week to open its own fintech accelerator and incubator—the InvestCloud Innovation Center—at its Pacific Design Center headquarters in Los Angeles. Banks, wealth managers, and other financial services firms will be able to undertake residencies at the Innovation Center to use InvestCloud’s platform to develop new apps and tools. John Wise, the co-founder and CEO of InvestCloud, said it will allow large financial institutions to work with the flexibility of a startup to speed up product delivery. The 10,747-foot Innovation Center can hold 15 six-person teams, and more centers are planned for New York and London. “Too often, digital projects take years to develop and cost millions. Many in-house initiatives are simply never delivered—typical failure rates for startups, incubators and internal IT projects are in the 90-percent-plus range,” Wise said. “Our platform and approach is hyper-modular in nature, providing massive leverage and predictability in delivery of financial apps; this is truly different. No project is allowed to take more than six months. Six people, six months, success.”

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