The goal is to find an investment that has reasonable long-term returns, even if it underperforms when other investments are gaining. Corporate bonds, for example, tend to outperform government bonds over an extended period.
For value investors, the last few years have been challenging. However, there are signs of material evolution in the market environment that should make for a more level playing field between value and growth going forward.
According to a 2013 PwC report, more than $41 trillion in assets will be transferred between generations over the next 50 years. PwC studies also show a 50% asset attrition rate for these transfers, suggesting the next generation of heirs don’t feel much loyalty to "Dad’s advisor."So how do wealth management firms build meaningful relationships with not just their client, but also those who stand to inherit?
Globalization has opened the door to investment opportunities around the world. Unfortunately, many investors choose not to take advantage of them, preferring to invest "closer to home," overweighting their portfolios toward domestic investments. This phenomenon is not unique among U.S. investors. It is the result of a cognitive bias for avoiding losses from riskier foreign markets.