Forget picking stocks and stick to passive, index-based funds, says Princeton University professor Burton Malkiel on ETFFunds.com. “A blindfolded monkey could select a portfolio that would do just as well as one selected by the experts,” he says. And while some, like Warren Buffett, are successful at value-based investing, 86 percent of active fund managers underperformed in 2014. “It’s not that there isn’t anybody that can do it, but it is virtually impossible to find the one who’s going to beat the market,” Malkiel added. Instead, diversify and add some exposure to emerging markets, like Japan and Europe, he recommended.
Financial advisors in the United Kingdom are embracing online content and video, even if they're not sure what the benefit of social media is yet, according to a study by Birmingham Business School's Midland Excellence program. Educational online content is the best way to reach and attract new clients, the study showed, and 80 percent of advisor said they plan to use video in their efforts in the upcoming year. And while two-thirds had a content marketing strategy, nearly 20 percent said they had trouble sticking to it.
It’s pretty common for someone in the midst of a mid-life crisis to splurge on a vacation, new car or expensive new hobby, but an estimated 41 percent couldn’t afford it without depleting his or her savings. One financial advisor suggests setting up roadblocks, such as clearing large purchases with a partner, to prevent big emotional purchases. He suggests instead building smaller indulgences into the budget and to tie large purchases to a milestone like a birthday or anniversary.
President Barack Obama proposed raising taxes on the top 1 percent in his State of the Union address, but what's important to note is that the tax is not on income from labor, but from investments. The hike in the capital gains tax—from 23.8 percent to 28 percent—will only affect those couples who earn more than $500,000 annually, and will only be on the income they receive from an investment, i.e., a stock, bond or piece of real estate. In fact, 36 percent of the income of the top 1 percent comes from these capital gains, compared to just 10 percent for the 96th to 99th percentile, according to data from fivethirtyeight.com.