No stone unturned. Although we most often get credit for our evidence-based investment approach, we are also helping clients with seemingly small things just below the surface that can make a big difference when the unexpected happens. One such example is helping clients properly name account beneficiaries for their retirement accounts. IRAs (and other retirement accounts) pass by operation of law according to your beneficiary designations on file, rather than per your estate planning documents. This is a very common misconception.

Experience tells us that it is essential to name a contingent beneficiary in addition to the primary. If a husband and wife were to die at the same time, the assets would pass to their estate, which may result in delays and higher federal income taxes for their beneficiaries. Click here to read an article on this topic.

Just four weeks ago, Jason Zweig of The Wall Street Journal warned investors to lower their long-term expectations of stock returns going forward. He gave one bit of advice for improving your odds of success—diversify internationally. If you’re a client of Hill Investment Group you can put a check mark next to this guidance. Unlike most investors, you’ve had significant international exposure since becoming a client. Here’s an excerpt:

After more than six years of a bull market, investors should stare a cold, hard truth straight in the face: Future returns on stocks are likely to be far slimmer than the fat gains of the past few years.

Leading investment analysts think you will be lucky to squeeze out an average return of 2% annually, after inflation and fees, from a typical portfolio of stocks and bonds over the coming decade or so.

Investment expenses will loom much larger in a world of smaller expected returns. So will avoiding big mistakes.

Friends and clients of our firm know that we’ve been singing the same evidence-based refrain for many years, so it is a pleasure to see when the major financial media joins in our song. In the Sunday, August 22nd issue of The Wall Street Journal, Jason Zweig concludes that the old-fashioned, active fund manager is dead. Anyone with that job description is best served looking for new employment.

Jason bases his piece on a recent submission by Charles Ellis to the Financial Analysts Journal, The Rise and Fall of Performance Investing (subscription required). Here’s an excerpt from the summary of Ellis’ article:

As acceptance of indexing grows, clients and managers have an opportunity to stop focusing on price discovery (which has made our markets so efficient) and refocus on values discovery, whereby investment professionals can help investors achieve good performance by structuring an appropriate, long-term investment program and staying with it.

So where will the active managers land next? Today, there are only a few hundred thousand financial advisors for tens of millions of investors. Ellis asks, “Who better to fill the insatiable demand for financial advisers than former portfolio managers who know firsthand how hard it is to beat the market?”

Click here to read Jason Zweig’s WSJ piece (subscription required).