Investment Strategy

Life can be as unpredictable as the markets. To mitigate the shocks that unforeseen personal expenses and economic fluctuations may bring, a well-rounded portfolio should address both short-term goals and expenses and long-term growth. The Bucket approach is one technique that can bring peace of mind today while still planning for tomorrow.

Investors today seek more than just market-average returns. They’re looking for strategies that deliver after-tax outperformance, align with their financial goals, improve tax efficiency, and reflect their personal values. Direct indexing helps meet these needs by offering index-like exposure through custom equity portfolios, enhancing after-tax outcomes and allowing for greater personalization. In other words, direct indexing is delivering on investors’ search for more and better.

The devastating wildfires in Greater Los Angeles are likely to be the costliest natural disaster in US history, and our most heartfelt thoughts go out to all those affected by these tragic events.   The human impact is immeasurable and the loss of lives, homes, businesses, and schools have placed communities in peril as they begin to recover and rebuild.  The financial impact is staggering: over 10,000 structures have been destroyed in one of the most expensive real estate markets in the country.

If you turned on your favorite financial news network or picked up a financial newspaper at any point in 2024, you likely read about an investment theme that has captivated Wall Street and Main Street alike. The “Artificial Intelligence (AI) Revolution” has created huge waves across financial markets as shares of chipmakers have skyrocketed higher. Companies outside of technology stocks, such as power producers and electrical component manufacturers, also recorded outsized returns last year.

The financial sector performed strongly in 2024, gaining over 28% and surpassing the S&P 500 Index as the segment recovered from the lows experienced during the banking crisis of 2023. The market gained confidence that the crisis was isolated to a select few banks and that a broader crisis had been averted.

In our recent Key Question “What Makes a Good Investment Manager?,” we highlighted the 8Ps framework that Key’s Multi-Strategy Research team uses to identify quality managers. As part of this process, the team is faced with an additional layer of complexity: If a manager has outperformed, is the outperformance driven by skill or simply luck?

In the immediate aftermath of the COVID-19 pandemic, options for higher-yielding securities were limited as interest rates hovered near historic lows. This environment would persist for several years, giving rise to the acronym TINA (There Is No Alternative). Yet, for investors seeking income, one option remained: dividend-paying stocks.

There’s a harsh sounding axiom in the financial lexicon that says “Economic expansions don’t die of old age. Rather, they are murdered by the Federal Reserve”.

Over the past three years small caps have underperformed large caps by the widest margin (-50% underperformance) since the dot-com bubble. Following a powerful rally in small cap equities over the past several trading sessions, investors may be wondering if this rally will continue and if adding exposure to this asset class makes sense.

Borrowing money is more than just acquiring it to facilitate a purchase or bridge short-term cash needs. Many people effectively employ credit and borrowing strategies as part of their overall financial planning.

Access to liquidity is an essential tool in the execution of every wealth plan.