Putting Investors’ Interests First – By Choice or by Legislation?

Putting Investors’ Interests First – By Choice or by Legislation?

The DOL Fiduciary Rule After almost a decade of wrangling over the details, the Department of Labor’s Fiduciary Rule officially went into effect on June 9, 2017. What does this mean? All financial advisors are now required by law to always act in the best interests of their clients when providing advice on retirement accounts or retirement planning. This includes greater fee transparency, ensuring fees are reasonable, and disclosing potential conflicts of interest. How Does This Impact You? The good news is that this new rule has no effect on any of our clients’ accounts and does not impact the way we do business at Capstone Capital. Since our inception as an independent registered investment advisor in 2002, we have voluntarily adhered to the fiduciary standard as defined by the Advisors Act, and have clearly disclosed fees and potential conflicts of interest to our investors. Although this new rule has garnered significant controversy in the financial industry and certain aspects of it still need to be clarified, we feel that overall it will be a good thing for investors. We are especially pleased that substantial media attention surrounding the DOL Fiduciary Rule has increased public awareness and understanding of the importance of the fiduciary standard and the benefit it provides to investors. You may be thinking, “What’s the big deal? Don’t all financial professionals already put their clients’ interests first?” Unfortunately, the reality is that until now, many financial professionals were only bound by a “suitability standard.” In other words, they could recommend investment products that would give them the highest payout or count towards sales quotas, as long as...
The Election’s Impact on the Market

The Election’s Impact on the Market

For better or for worse, the suspense is finally over and our next president has been elected. Whether you are shouting for joy or crying your eyes out, what does this all mean for the stock market? Many people are shocked that Donald Trump won. Based on concerns we’ve heard about how this election would affect the market, many people are probably just as shocked that the Dow Jones Industrial Average jumped up 1.4 percent (256 points) the day after the election, and the S&P 500 rose 1.1%. A lot of people were expecting a big drop in the market because that’s exactly what happened after the past two elections. Could it be that after the past two elections the market was reacting negatively to news that our next president would be a Democrat, and that now the market is reacting positively to the election of a Republican? Don’t count on it. The market fell the day after George W. Bush was elected in 2000, and it rose the day after the re-election of Bill Clinton in 1996. Historically, there has been no predictable impact on the market based on whether a Republican or Democrat takes office in the White House. Furthermore, the day after the election gives no indication as to how the market will perform over the next 12 months. In fact, although the S&P 500 dropped 5 percent the day after Barack Obama won the presidency in 2008, over the course of the following 12 months the S&P 500 gained 26%. In 2012, the swing was even more dramatic, losing 3% the day after the election,...
Weathering Stormy Markets

Weathering Stormy Markets

It’s normal to get nervous about your investments when you hear news of stock market dips and slow downs. But it’s important to remember not to panic. During these times, you need to stay in the market, remember your long term plan and weather the storm. Click the link below to watch a short video about the importance of staying in the market:...
Dimensional Origins

Dimensional Origins

Watch this great video introducing the origins and philosophy of Dimensional Fund Advisors, a remarkable company that provides critical support to our investment management services for clients....