Merriman recognized as one of the Top 300 RIAs by Financial Times

iStock_000018550149XSmallWe are excited to announce that Merriman Wealth Management, LLC was recognized as one of the Top 300 Registered Investment Advisors (RIAs) in 2014 by Financial Times!

Financial Times uses a number of quantifiable and objective measures of investor-centered criteria to select the top firms, including assets under management (AUM), AUM growth rate, years in existence, compliance record, industry certifications and online accessibility. We are proud to be named in this elite group.

Download a full copy of the Financial Times special report here.

 

Merriman is not affiliated with Financial Times and did not pay to participate in the list. Please see pages 2 and 12 of the FT Special Report for a full description of the selection methodology utilized by Ignites Distribution Research, a sister publication to Financial Times. Rankings are historical in nature and are not indicative of future performance. The FT 300 list is not an endorsement from Financial Times nor a testimonial of client experience with Merriman.
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The nuances of rebalancing

iStock_000019901243SmallI recently received a question from a client of mine about an article that referenced re-balancing a portfolio at the same time each year. In theory, an annual rebalance is not a bad way to go. However, there’s quite a bit more to how we manage the rebalancing process than that.

For Merriman clients, we:

  • Avoid unnecessary transaction costs by using cash inflows and outflows as a tool to rebalance a portfolio back to its target allocation. Cash inflows are used to buy underweight asset classes and cash outflows are used to sell overweight asset classes.
  • Allow assets that are performing well to continue to perform – a documented trend called momentum – by placing tolerance bands around our allocations. This also helps avoid excessive rebalancing transaction costs.
  • Favor rebalancing tax-deferred accounts in December to coincide with mutual fund distributions and Required Minimum Distributions (RMDs), again reducing transaction costs.
  • Help defer taxes by rebalancing taxable accounts in January, when appropriate.

Market performance can also have an impact on the need for rebalancing. If returns are flat for a few years, there is less need for rebalancing. In volatile times, more.

In addition there will be one-off cases such as:

  • Tax loss harvesting. If there is a significant downturn in the markets (think 2008), we can use that as an opportunity to harvest losses to be used against future gains. We did this for our clients in 2008 and it is paying dividends today.
  • Introduction or deletion of an asset class can also provide an opportunity to rebalance your portfolio.

Rebalancing your portfolio is an integral step in maintaining a well-balanced portfolio and reducing its risk. But to do it once a year at the same time every year may not be the best solution for you. Depending on your situation, a more customized rebalancing approach may save you significant money in transaction costs and taxes in the long run. As always, check with your advisor to find out what’s right for you.

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Benchmarks, Diversification & Time Horizons – Part 4 of 4

In this four-part blog series from Merriman Research, we’re offering our thoughts on the following important investment questions:

  • When evaluating your investment returns, what benchmark(s) are relevant?
  • What is the rationale for diversification?
  • How should your investment time horizon be considered?

Investors may overlook the fact that these questions are highly interrelated. To properly consider any one, you must understand the context the other two foster. We’ll just have to jump right in to explain. If you missed Part 1Part 2 or Part 3, start there and come back.

Part 4: Historic returns analysis supports diversification & longer time horizons

In this our fourth and final post of this blog series, we offer an assessment of historic index performance data.  We expect that your better understanding of this history will contribute to your appreciation of the benefits of diversification and longer-term time horizons for your financial planning. Read More…

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Benchmarks, Diversification & Time Horizons – Part 3 of 4

In this four-part blog series from Merriman Research, we’re offering our thoughts on the following important investment questions:

  • When evaluating your investment returns, what benchmark(s) are relevant?
  • What is the rationale for diversification?
  • How should your investment time horizon be considered?

Investors may overlook the fact that these questions are highly interrelated. To properly consider any one, you must understand the context the other two foster. We’ll just have to jump right in to explain. If you missed Part 1 or Part 2, start there and come back.

Part 3: Thoughts on time horizons – Define and don’t undermine

In general, the appropriate time horizon for an investor depends on when that investor may need the money. This determination can become quite complicated, depending on specific circumstances, and will likely change over time. It can even differ for various components of an investor’s wealth. For the purposes of this article, we can say that the time horizon for the vast majority of our clients can be measured in many years, and even decades – and in some cases can extend beyond an individual’s lifetime (e.g., with generational transfers). Read More…

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Benchmarks, Diversification & Time Horizons – Part 2 of 4

In this four-part blog series from Merriman Research, we’re offering our thoughts on the following important investment questions:

  • When evaluating your investment returns, what benchmark(s) are relevant?
  • What is the rationale for diversification?
  • How should your investment time horizon be considered?

Investors may overlook the fact that these questions are highly interrelated. To properly consider any one, you must understand the context the other two foster. We’ll just have to jump right in to explain. If you missed Part 1, start there and come back.

Part 2: Thoughts on diversification – Why is it a good thing?

Investors tend to appreciate diversification in bad times, but not so much in good times. Investors like the idea of diversifying to mitigate losses, but don’t like diversification when it suppresses gains. Just look back at 2013 – the S&P 500 was up 32.4%, but any version of a “diversified” portfolio would have gained much less. A balanced benchmark, along the lines of a 50%/50% stock/bond split, was up about 15% (if we just blend the returns of the S&P 500 and the Barclays U.S. Aggregate).

Why should I diversify?” a balanced client may ask. The answer is To control risk and we only need to look back to 2008 for an example. That year, the S&P 500 declined 37%, whereas a 50%/50% balanced benchmark was down only 16%. Read More…

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Benchmarks, Diversification & Time Horizons – Part 1 of 4

In this four-part blog series from Merriman Research, we’re offering our thoughts on the following important investment questions:

  • When evaluating your investment returns, what benchmark(s) are relevant?
  • What is the rationale for diversification?
  • How should your investment time horizon be considered?

Investors may overlook the fact that these questions are highly interrelated. To properly consider any one, you must understand the context the other two foster. We’ll just have to jump right in to explain.

Part 1: Thoughts on benchmarks – What’s the right yardstick for you?

For investors, a benchmark is the yardstick by which to measure the relative success of their investment returns. Broad market indexes, for both stocks and bonds, can serve well to provide a daily status report on how the investment community interprets news and developing trends on the economy, corporate profits and even international geopolitics. And, over time, broad indexes do present appropriate performance standards, which can be used to evaluate an investor’s performance in terms of both achieved return and experienced risk. Read More…

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Social Security strategies for couples

iStock_000010373589SmallThere are countless articles online on strategies for maximizing your Social Security benefits. Married couples have far more options than singles, and the rules are complex. If you are married and eligible (or almost eligible) for Social Security, it is worth talking to a financial or tax professional to ensure you weigh all of your options. In the meantime, this article from Kiplinger provides a nice primer on two of those available strategies: File and Suspend and Restricting an Application. It’s worth a quick read so you can come prepared to speak intelligently with your advisor, and thereby maximize your probability of a successful outcome.

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Leveraged Global Opportunity Fund

In a follow up to a recent blog piece on our TrendWise Investment Program, the Merriman Research Team got together again to discuss our hedge fund, the Leveraged Global Opportunity Fund. Mark Metcalf again hosted Rafael VillagranDennis Tilley, and Alex Golubev for a discussion on how LGO fits into Merriman’s overall investment philosophy.

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The Merriman Research Team discusses our TrendWise Investment Program

Recently, our Research Team of Dennis Tilley, Rafael Villagran, and Alex Golubev got together with Financial Advisor Mark Metcalf to discuss our TrendWise Investment Program. Many of the program’s details were covered, including the following:

  • Harnessing market momentum using objective data
  • Rules based trend following
  • Limiting subjective interpretation
  • Dealing with whipsaw trades
  • Small/Value tilt in the program

Enjoy!

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Stop worrying about rising interest rates

There is practically universal opinion that interest rates will rise in the future, and that bond portfolios will suffer painful losses when this happens. At Merriman, we think the financial news media has blown this story way out of proportion, with inflammatory headlines designed to capture attention. Narratives include “the coming bloodbath for bond holders” and “the imminent bursting of the 30-year bond bubble.”

Our Chief Investment Officer, Dennis Tilley, recently wrote an article detailing three reasons why we’re not worried about rising interest rates. Here’s a quick summary:

1. The Experts and Consensus Are Often Wrong

History provides countless examples of when experts and/or a super-consensus have been wrong about the future of stock and bond movements. This is why we don’t use market predictions to manage client portfolios.

2. A Portfolio Duration of Four to Five Years Is Optimal

The sweet spot duration for Merriman investors holding bonds is in the maturity range of four to five years. This intermediate duration provides a nice compromise of offering overall portfolio stability, market crisis/deflation/recession protection, a long-term real return above inflation and – perhaps most importantly – the ability to quickly adapt to a rising-rate environment. With this duration, we believe our clients don’t have to worry about rising interest rates. The article provides more detail and charts illustrating this point.

3. Rising Rates Signal an Improving Economy

Finally, rising interest rates are likely to coincide with an economy that is improving, which is generally good for stocks. Yes, temporarily, bonds will lose value due to rising yields. However, we expect only single digit losses from our bond portfolio, not the “bloodbath” that some pundits seem to think will happen.

Read the full article here to get more insight.

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