Joe Duran

Duran Duranblog

Joe Duran

Feb 14, 2018, 3:19 PM EST

Flash crash: The value of advisers in coping with uncertainty

PracticeManagement-Main

By Joe Duran

A week ago Monday, the Dow fell 1,175 points. Although that was not anywhere near a record percentage decline, it turned out to be the biggest point decline in history. After 19 months without a 5% decline from the peaks (a record in itself), volatility came roaring back, with wild swings on a daily basis. Most professionals have been waiting for the return to "normal" levels of volatility for years. However, no matter how knowledgeable anyone is, nobody really knows exactly when or how extreme declines will come, or when they will be over. We use mathematics and accuracy when reviewing the past, but there is a blend of art, science and experience involved in looking into the future. It is impossible to have an exact or accurate answer when looking forward. No one knows what the market will do tomorrow, much less what might happen years from now. Yet entire financial lives are counting on our ability to anticipate the future. As I... Read full post

Jan 25, 2018, 5:14 PM EST

How bitcoin and blockchain will change the world

Bitcoin-Main

By Joe Duran

Bitcoin climbed in value from less than $1,000 at the beginning of 2017 to $14,000 by the end of the year. A coin of Ethereum was worth $8 on Jan. 1, 2017, and $843 one year later. Who would not be intrigued with the idea of owning something that appreciated thirteenfold, or even a hundredfold, in one year? Even the least sophisticated investors are wondering if cryptocurrency is a real thing or just a bubble of speculation. The real revolution is not the currency but the system that supports it.... Read full post

Jan 2, 2018, 12:26 PM EST

The biggest losers and winners of 2017

race-bike

By Joe Duran

Politics and the presidency have seldom played a more dominant role in our popular culture as they did last year. Despite the wall to wall coverage of the White House, 2017 turned out to be a far calmer and less disruptive year in the financial markets and the wealth management industry than many anticipated. In the background, our world continues to shift and 2017 turned out to be an intriguing one in many ways. In thinking about the past year, we present our perspective of the biggest losers (and winners): 1. Loser: The DOL Rule. It's not clear where we sit with the Department of Labor rule that would have applied a fiduciary standard to all retirement plan participants. The implementation, which was meant to occur in April 2017, would have been a dagger in the heart of many independent broker-dealers, their brokers and the commission-based firms supporting them. It was at center stage as the major catalyst to change the industry... Read full post

Dec 13, 2017, 5:27 PM EST

Three big effects of the shifting broker protocol

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By Joe Duran

About a month ago, Morgan Stanley announced it was leaving the protocol. A few weeks later, UBS followed suit. The protocol is the mutual agreement that lays the ground rules for advisers to leave their existing brokerage firm and take specified client data with them. Launched in 2004 between Smith Barney, Merrill Lynch and UBS (Morgan Stanley joined a couple of years later), the protocol was intended to reduce litigation among member firms and to protect client information privacy. The list of participants has mushroomed to over 1,500 firms today.UNDERSTANDING THE DEPARTUREThe official line by Morgan Stanley is that they left the agreement to invest more in their existing advisers (and escape the other participants that are gaming the system). However, many in the industry suspect this was really about stemming the tide of departing advisers. The original intent was for the big three (later the big four) firms to reduce internal... Read full post

Nov 21, 2017, 4:41 PM EST

An American Thanksgiving

Win-metal

By Joe Duran

Last week while I was at the Schwab Impact conference in Chicago, the country I grew up in had a revolt that placed 92-year-old President Robert Mugabe into military confinement. Until yesterday, he had led Zimbabwe since 1980, when I was a pimply faced 12-year-old student dreaming of coming to America. I lived through the civil war and the ensuing transition from white minority leadership to an emerging majority led democracy (or at least the African version of one).As a first generation American, I can't help but think about the differences between the country I grew up in and my adopted home and contrast why two countries, both with really good people who want the same things, can have such fundamentally different experiences. In those differences are principles that every one of us should seek to instill in our companies. So in the spirit of Thanksgiving, I'm going to highlight three unique traits that are the cornerstone of... Read full post

Oct 30, 2017, 5:25 PM EST

Prepare clients for the terror of falling markets

Bear-Market

By Joe Duran

It's witching season and while our costumed children invade our neighborhoods for candies and treats, almost no-one considers the "trick" part of the equation anymore. It's much the same way for investors today; it's been nothing but treats and no bad scares for years now. At the turn of the century, we suffered two big bear markets in the first 10 years, but since then we have experienced historically low volatility. Since 2010, investors in all assets have benefited from a flood of capital and low interest rates provided by the ever-supportive Federal Reserve. Assets across the globe, from investments like stocks and bonds to less liquid assets like homes and fine art, have all appreciated measurably for years. More importantly, this has happened with some of the lowest levels of volatility we have ever witnessed. It's more fun to talk about the good stuff, but the scare is worse when you don't expect it. Here are four ways to... Read full post

Oct 9, 2017, 11:53 AM EST

If a GPS app can fail, so can fintech

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By Joe Duran

I recently read an article from the Philadelphia Inquirer about an 18-wheeler that drove several miles down the pedestrian-only Boardwalk in Atlantic City. The driver was following instructions of his onboard navigation system which had the boardwalk designated as a street. After passing several stunned onlookers, the driver found himself stranded and his tractor trailer had to eventually be dismantled and a berm built to get it off the boardwalk. In this case there were no damages other than confusion. It's an amusing story but also a great analogy in the dangers of trusting too much in technology, and why human judgment is so important even in a highly digitized world. WHEN TECH FAILSWe've all become completely dependent on technology and have come to trust that it's reliable and accurate. However, if we trust it blindly then we are no better than a computer ourselves. Unfortunately, it sometimes lets us down, so it's important to... Read full post

Sep 19, 2017, 4:49 PM EST

The role of an adviser when the unexpected happens

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By Joe Duran

When Hurricane Harvey hit Southern Texas, few could be truly prepared for the destruction brought on by the never before seen deluge of rain. Two weeks later Hurricane Irma destroyed several Caribbean islands and swamped Florida as the biggest hurricane to ever strike the Atlantic islands. Lives were turned upside down overnight as homes and cities confronted once unimaginable weather events.There are few models that anticipate a once-in-a-lifetime event, so when they happen, no one is really prepared for what might transpire. In some ways, people's financial lives are similar. We can prepare and plan for many outcomes, but few of us can ever really be ready when an unimagined event actually occurs. (More: Harvey and Irma — Reminders that advisory firms need solid continuity plans)PREPARING FOR THE UNIMAGINABLEThe best laid plans can very quickly be derailed by life getting in the way. It is highly unlikely any person had built... Read full post

Aug 17, 2017, 5:08 PM EST

5 non-money-related books to help you (and your children) live a better financial life

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By Joe Duran

Last week I was enjoying a late summer dinner with my daughter. We ended up discussing the books that I thought she should read ? books that I think are interesting and have helped me the most in my life. She's a sophomore in college and really wasn't interested in how-to books or other additional educational stuff. Since we are at the end of the summer season and many of us are about to send our kids back to school again, here is a short list of books that will help any person become a better decision maker. "Animal Farm" and/or "1984" by George Orwell: They might be very different books, but they both speak to the danger of being swept up with the crowd and losing your ability to think for yourself. While "Animal Farm," with its lowly creatures taking over the farm, might have been intended as a commentary on communism, I have always thought of it more as a lesson in the slowly creeping impact of a loss of integrity and the danger of ... Read full post

Jul 17, 2017, 4:15 PM EST

What we can learn from Amazon's acquisition of Whole Foods

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By Joe Duran

For the past 20 years, organic food grocer Whole Foods has rethought the way consumers shop for groceries and brought the farmers' market to neighborhoods all over the country. While pricey, it succeeded in a crowded sector, and grew in a small niche market into a nationally dominant position, becoming part of the American fabric in the process. In the meantime, shareholders were rewarded handsomely, as the stock grew tenfold from around $4 per share on June 30, 1997, to about $42 per share today. During the same period, Amazon reimagined the entire consumer experience for all of retail and their stock grew from $2.50 per share 20 years ago to around $1,000 per share today, a staggering 40,000% return over the past two decades (split adjusted). Last month , Amazon announced the acquisition of Whole Foods for $14 billion. A drop in the bucket compared to Amazon's current $480 billion market cap. While most food retailer stocks swooned... Read full post

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