Various equity market indicators continue to suggest caution. Our proprietary adaptive market state analysis has improved from its defensive state into a more typical “neutral” state. But we’re observing a mosaic of other indicators that supports a cautious stance. Our equity scorecard is signaling potential trouble on the back of lower macro data — as are data from asset classes that tend to correlate with equities.

There are two reasons that we believe fixed-income markets are attractive relative to equity: First, there are potential diversification benefits of duration assets in an equity correction. Second, we continue to believe credit markets are best suited to benefit from the generous fiscal support policies that have been introduced.

While truly non-directional strategies represent excellent opportunities to diversify portfolios, many strategies designated as “alternatives” have inherent market beta and end up struggling alongside traditional...

High-quality bonds stumbled early in the current crisis. But there are many reasons to expect them to rise in a down market — making them our fixed income investment of choice.

The COVID-19 crisis has challenged individuals, families, companies, governments and investment markets around the world. It’s an experience that could fundamentally reshape consumer and corporate behavior, as well as financial markets.

One of your most personal financial goals as a grandparent may be to leave a legacy that helps ensure the success of future generations. With the cost of college rising every year, more and more grandparents have started contributing to their grandchildren’s education savings.

And we have good news: opening or contributing to a 529 plan offers benefits to you as the gift-giver too.

Enjoy tax-free investment growth — and other legacy planning benefits

Special provisions specific to 529 plans allow you to contribute without incurring federal gift taxes or reducing your unified federal estate and gift tax credit, while also reducing your taxable estate.

As an account owner, you have complete control over the assets and the flexibility to change beneficiaries at any time. You can also take non-qualified distributions, if needed. Earnings are subject to a 10% federal penalty.

And there are two big advantages exclusive to...

How unique is the current market volatility from an asset allocation perspective?

Josh Kutin: Every recession is different, and every market correction has its own nuances. A pandemic and intentional economic shutdown are unique, but some of the patterns we see are common: risky assets post large negative returns, volatility metrics spike sharply, and everyone becomes concerned about liquidity. It didn’t take long for the investing community to draw parallels between the pandemic-related market volatility of 2020 and the global financial crisis of 2008.

On March 27, the over $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. It builds on prior legislation intended to address the COVID-19 pandemic by providing support to businesses and individuals. Two essential components of the act are the Paycheck Protection Plan (PPP) and the Coronavirus Related Distribution (CRD) from retirement accounts. 

Paycheck Protection Plan for smaller businesses

The Paycheck Protection Plan is a two-year business loan administered by the U.S. Small Business Administration. In some cases, the loan is forgivable. Some key provisions are:

The COVID-19 crisis has challenged individuals, families, companies, governments and investment markets around the world. It’s an experience that could fundamentally reshape consumer and corporate behavior, as well as financial markets.

Over the long term, dividend initiators and growers have outperformed the S&P 500 — even during periods of economic recession – and may provide investors a cushion against losses.

Research is critical to finding companies that are positioned to initiate or grow dividend payments. The highest yielding stocks may not be able to sustain dividend payments, while high-quality companies with sound business models and healthy free cash flow may be better able to weather uncertain conditions.

When a world as interconnected as ours is forced to shelter-in-place, the impact on businesses, families and society is profound. But, behind closed doors and makeshift workspaces, people are creating a new normal, and sharing a collective hope for rebuilding the future.

Dividends have historically been an important component of equity total return. In the beginning of 2020, we believed their contribution would rise relative to equity price returns, which we expected to be lower.

How unique is the current market volatility from an asset allocation perspective?

Josh Kutin: Every recession is different, and every market correction has its own nuances. A pandemic and intentional economic shutdown are unique, but some of the patterns we see are common: risky assets post large negative returns, volatility metrics spike sharply, and everyone becomes concerned about liquidity. It didn’t take long for the investing community to draw parallels between the pandemic-related market volatility of 2020 and the global financial crisis of 2008.

On March 27, the over $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. It builds on prior legislation intended to address the COVID-19 pandemic by providing support to businesses and individuals. Two essential components of the act are the Paycheck Protection Plan (PPP) and the Coronavirus Related Distribution (CRD) from retirement accounts. 

Paycheck Protection Plan for smaller businesses

The Paycheck Protection Plan is a two-year business loan administered by the U.S. Small Business Administration. In some cases, the loan is forgivable. Some key provisions are:

When a world as interconnected as ours is forced to shelter-in-place, the impact on businesses, families and society is profound. But, behind closed doors and makeshift workspaces, people are creating a new normal, and sharing a collective hope for rebuilding the future.

Various equity market indicators continue to suggest caution. Volatility remains high, and the market no longer appears attractively valued after the April rebound. Eventually, we expect global economies to recover and (over the long run) for investors to be rewarded for equity positions. But for portfolios with tactical latitude, we believe that reducing exposures in an environment with an elevated risk of a correction makes sense.

Fixed-income markets represent an attractive area relative to equity for two reasons. First, the diversification benefits of duration assets should be beneficial in the equity correction scenario we discussed above. And secondly, we continue to believe credit markets are best suited to benefit from the recent generous fiscal support policies. Spreads have tightened over April, but many of the fixed-income pricing dislocations that began in March still haven’t rebounded.

Truly non-directional strategies represent...

Dividends have historically been an important component of equity total return. In the beginning of 2020, we believed their contribution would rise relative to equity price returns, which we expected to be lower.

The COVID-19 crisis has challenged individuals, families, companies, governments and investment markets around the world. It’s an experience that could fundamentally reshape consumer and corporate behavior, as well as financial markets.

Market volatility resulting from the coronavirus has evolved into the most serious risk event since the 2008 financial crisis. In response, investors have been frequently reminded to stay focused on their long-term goals amid this shorter term disruption. It’s good advice. Because in a volatile market, there’s a strong urge to move to a “safe” asset, like cash. And for many, it’s a mistake.

If there was ever a time for a strategic policy portfolio, this is it. It can act as a baseline and a bulwark if the target mix of asset class exposures is based on investor goals, risk tolerance and time horizon. This baseline approach can be even more effective when it has a dynamic component that can make adjustments to equity and risky asset exposures on a systematic basis — based on market signals — rather than relying on bad decisions borne out of panic.

But how does a portfolio manager build a resilient strategic portfolio that...

It’s now all but inevitable that we will see a deep contraction in U.S. economic activity as a result of the shutdown to contain the coronavirus. As of April 2, initial jobless claims (as reported by the Department of Labor) spiked to 6.6 million — a new record. Future DOL reports are likely to show further increases in the coming weeks, and it’s very likely that we’ll see the unemployment rate, recently at historic lows, rise to 6% in April. It may even reach 9%-10% in the upcoming months.