Another day, another round number. The Dow Jones Industrial Average closed above 23000, the latest milestone in a year with quite a few. (And this on the day before the 30th anniversary of Black Monday.)
But often lost in these headlines moments are causes for caution. Ominous trends. Ambiguous developments.
Two WSJ Wealth Adviser alum take a look at one worrisome trend that has emerged recently: investors keep yanking money out of stock funds.
Investors pulled roughly a net $36 billion out of U.S. stock mutual and exchange-traded funds in the third quarter, according to EPFR Global. Overall in 2017, more money has flowed out of such funds than has flowed in, EPFR data show, even as the Dow has climbed to 51 fresh highs this year.
Many investors are concerned that the steady rise in U.S. indexes has left shares looking expensive. They also recently have grappled with elevated tensions between the U.S. and North Korea, hurricane-related disruptions to the economy and signals that the Federal Reserve is planning to raise interest rates further and wind down its unprecedented asset-purchase program. …
… Others think the money leaving U.S. stock funds is a positive development. The outflows have coincided with elevated cash holdings and could signal major indexes can climb even higher. They figure with less invested in U.S. stock funds, there is plenty of money to put back in if investors get more optimistic.
These analysts and investors reckon some caution is healthy in a rising market. What would worry them that a peak may be near, they say, is the kind of exuberance they remember seeing from investors in the dot-com boom in the late-1990s.
Below, some of the best analysis and insight from WSJ writers and columnists, and occasionally beyond, on investing, the wealth-management business and more.
Change atop AmEx. Kenneth Chenault, the head of American Express and one of the country’s most prominent African-American corporate leaders, will step down as chairman and chief executive on Feb. 1.
Havoc in hedge land. The prospect of interest rate increases in the U.S. and U.K. is playing havoc with the trades of several large hedge funds.
PLANNING AND INVESTING
Giving. George Soros‘s mammoth wealth transfer provides a template for ultra-rich families who often grapple with how to balance their philanthropic and investment goals, especially as the individuals who made the fortunes get older.
Retirement review. The U.S. Government Accountability Office released a report that calls on Congress to establish an independent commission to “comprehensively examine the U.S. retirement system and make recommendations” on ways to improve retirement security. The report noted that it has been 40 years since the last such commission, appointed by President Carter, evaluated the nation’s retirement system. Among the challenges on the horizon, the report notes, are the underfunding of Social Security, which is projected to be unable to pay full retirement benefits starting in 2035, and the shift from a defined benefit pension system to 401(k)-style plans, which puts the risks and responsibilities of funding retirement onto the individual. The GAO report recommends appointing representatives from government agencies, employers, the financial services industry, unions and academia. –Anne Tergesen
BUSINESS AND PRACTICE
WSJ Adviser Profile: Richard Saperstein, chief investment officer at HighTower’s Treasury Partners, says his firm often pairs advisers of different ages to manage accounts or oversee funds. Younger advisers benefit from the veteran’s experience, he says, while the younger advisers can re-energize their more-seasoned counterparts.
TRAVEL AND LIFESTYLE
Watch watch. WSJ’s horological expert searched the market for mechanical watches—the most desirable sort—and found three thrifty timepieces ($250 and under) that meet his exacting standards
The Middle Seat. Why United Airlines has quietly opened an unmarked, invitation-only eatery at Newark Liberty International Airport
– ADISA 2017 Annual Conference / Las Vegas, Oct. 23-25
– ACA Fall Compliance Conference / San Diego, Oct. 25-27
– FinCon 2017 / Dallas, Oct. 25-28
– The SRI Conference / San Diego, Nov. 1-3
– ACP Annual Conference / San Antonio, Nov. 8-11
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