Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects

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I hope you had a wonderful weekend! Remember Valentine’s Day is tomorrow!

LRPC’s Monday Morning Minute for this week, “Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects” (presented below) comes to you courtesy of ThinkAdvisor. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week. This is a short piece I believe everyone can read in less than 60 seconds.

As his retirement approaches, Brian Rogers, Chairman and CIO at T. Rowe Price, shares his knowledge gained from 35 years working with investments.

Have a wonderful week!

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Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects

By Emily Zulz, Staff Reporter, ThinkAdvisor

On Brian Rogers’ desk at T. Rowe Price is an engraved cube displaying the reminder, “Doubt everything. Believe nothing.” “And I think those are good things for investors to do,” as well, Rogers said

As the time nears for him to step down from his current roles as chairman and CIO at T. Rowe, Rogers is taking time to reflect on his career. “One thing that really struck me” in 1982 when he joined T. Rowe, he recalled at the event, is how “passive was making increasing inroads into our business.” In addition, he said, “fees were under cyclical pressure in 1982. Fast forward to 2016 and it feels like the same two trends are in place, and will continue.”

Recently, T. Rowe Price announced that Rogers will retire as chairman and CIO on March 31, 2017, after nearly 35 years at the firm. While he will stay on as a non-executive chair, his role as CIO will be taken on by six senior investment executives. Recently, Rogers shared six keys to investment success he’s learned over his career.

1. Be an optimist

“When I think back over the course of my career I think back to Warren Buffett’s description of the 20th century,” in which Buffett suggested that ‘If you had $1,000 to invest in 1901 but you knew about everything that was going to happen in the 20th century, you never would have invested the money.’”

However, despite two world wars, depressions, financial crises, oil embargos, global tension and the Cold War, it actually was a good century in which to invest. Rogers suspects this century will be similar to the last. “So be an optimist despite how bad things seem and despite how volatile markets may be,” Rogers said. “Being optimistic, I think, is something that really makes sense for the individual and the institutional investor.”

2. View crises as opportunities

“When you look back over history, a lot of the crises we’ve lived through now just look like little blips on a price chart,” Rogers said. “If you think back to the crash of ’87, the downturn in 1990-91, even the Dot Com crash…when you look at a long-term price chart, they look like little blips. So you have to view those things as opportunities. Everything is cyclical.”

3. Price determines success

“Think of your own lives: If you pay too much for a house, it may not be a good investment for you. If you pay too much for a stock or bond, it may not be a good investment for you,” Rogers said. “Ultimately price and value converge, but it can happen from different directions. You can have price and value, and price drops. Or you can have value and price, and price rises. “Not surprisingly, it’s tougher to make money when prices are high.”

4. Be humble

“One of the things I think I’m known for within our organization is — -very gently — -from time to time telling people that they don’t know as much as they think they know,” Rogers said. “Over-confidence as an investor is a great challenge.” To support his point, Rogers quoted Confucius: Real knowledge is to know the extent of one’s ignorance. “One of the things we preach within the investment organization is ‘Know what you know. Know what you don’t know. And don’t be overconfident about it all,’” he added.

5. Avoid complexity

“Simplicity is a virtue. I have seen so many investors get into so much trouble over the years with what I call ‘fancy products,’” Rogers said. Today one of Rogers’ favorite investment products to “really go after” is leveraged ETFs. “Does anyone really think that betting the 3x Brazil [will go] up is a good bet for the individual investor?”  though he acknowledges “it would have been this year, but it’s a very difficult thing to do and I think the financial services industry from time to time should be criticized for offering products that are so complicated, so complex that investors can’t really understand the risk and return framework of them.”

6. Avoid investment cults

“I remember Bethany McLean when she wrote the book The Smartest Guys in the Room [about the Enron scandal], she talked about steering clear of companies that are so popular, so much in the press — think Valeant, think Theranos, think companies like that. Over the years it’s been companies like Enron and Tyco.”

For example, Rogers pointed out that the leaders of the equity markets in the ‘80s — like Digital Equipment Corporation, Data General and Intergraph — are barely remembered today. “Beware the ‘It’ stock,” he said. “And beware of companies always on the front page. Beware of hot sectors and companies with very low entries into their businesses.”

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About LRPC’s Monday Morning Minute

Lawton Retirement Plan Consultants, LLC (LRPC) Monday Morning Minute is crafted to provide decision-makers with important information about the economy, investments and corporate retirement plans in a format that allows a reader to consume the information in less than 60 seconds. As an independent, objective investment adviser, LRPC has access to many sources of research and shares the best and most relevant information with its readers each week.

About Lawton Retirement Plan Consultants, LLC

Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisory, fiduciary compliance, employee education, provider management and plan design services to retirement plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or bob@lawtonrpc.com or visit the firm’s website at http://www.lawtonrpc.com. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.

Six New Year’s Resolutions 401k Plan Sponsors Should Make

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By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

I hope that 2016 was a great year for you and that 2017 will be even better!

A few changes can make your good 401k plan into a great one. To help your 401k plan achieve greatness, consider making the following 401k plan improvements by year-end: [Read more…]

The Five Deadly Sins Of Investing

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I hope you had a great weekend! Time’s running out for you holiday shoppers!

LRPC’s Monday Morning Minute for this week, “The Five Deadly Sins Of Investing” (presented below) comes to you courtesy of ThinkAdvisor. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week. If you are short on time, make sure you take a look at each of the five headings below.

Sometimes the best way to improve how you invest is to learn what not to do. This week’s article outlines some of the biggest investing mistakes all investors should avoid.

Have a wonderful week!

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The Five Deadly Sins Of Investing

By Daniel S. Kern, appearing in ThinkAdvisor

One of my friends in school was renowned for frequently telling us: “I aced that test!” He was never shy about sharing his answers after a test. His certainty about the answers made me question whether my answers were correct.

I eventually realized that he was wrong more often than right, and he became notorious for misplaced self-confidence. When he joined an investment firm after graduating from school, some of us joked about starting a “contrarian” fund to bet against his stock picks. Overconfidence is one of the “deadly sins” highlighted in studies of behavioral economics.

The investment industry is filled with confident people similar to my friend, who may be well-meaning but who also pass along bad ideas that become accepted as conventional wisdom. Here’s my top five list of investing mistakes that become deadly sins of investing: [Read more…]

Socially Responsible Investing Ratings Can Boost Your 401k’s Value

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By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

Recently Morningstar, creator of the Morningstar Star Ratings for mutual funds, introduced Sustainability Ratings to gauge an investment’s adherence to SRI principles. 401k plan participants, millennials especially, have become interested in socially conscious and impact investing. A recent U.S. Trust survey found SRI factors are important to 93% of millennials when making an investment decision. Your 401k plan can have greater value to your employees if you begin sharing Morningstar’s Sustainability Ratings for your 401k investment options. [Read more…]

Did You Hire The Right 401k Investment Adviser?

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By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

As a 401k plan sponsor, you are probably aware that there are some new fiduciary regulations going into effect in April of 2017. You probably have spent some time wondering (worrying?) whether these regulations affect your relationship with the investment adviser or investment advisor who works with your 401k plan. They might. Here’s how to tell. [Read more…]

How To Hire A 401k Investment Adviser

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By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

Employer plan sponsors often ask me which investment adviser credentials are most important to look for when hiring a 401k investment adviser. As a 401k investment adviser myself, I have observed a number of plan sponsors hiring the wrong advisers because they aren’t looking at the right investment adviser credentials and are using an incorrect set of criteria to judge who is best.

Following are some universal, common sense criteria that plan sponsors can apply when hiring a 401k investment adviser along with important investment adviser credentials to evaluate. The information is divided into what I would consider the three major categories plan sponsors should evaluate: Fiduciary Responsibility, Firm and Background. [Read more…]

What Plan Sponsors Need To Do NOW In Response To 401k Money Market Fund Rules

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 By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

The large mutual fund families are doing everything possible to keep you from moving your 401k money market investments away. BlackRock, Federated, Fidelity and Vanguard have all announced changes to their money market fund offerings which they hope will allow them to retain existing 401k money market balances. These changes are in response to the Securities and Exchange Commission (SEC) 401k money market fund reform rules outlined below. [Read more…]

After Reaching New Highs, Can Stock Market Rally Continue?

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MMM Newsletter and Website Header 10.2.15I hope you had a great weekend! Training camps are open and football is back!

LRPC’s Monday Morning Minute for this week, “After Reaching New Highs, Can Stock Market Rally Continue” (presented below) comes to you courtesy of Charles Schwab. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share the most relevant information with you each week. This is a short piece I believe everyone can read in less than 60 seconds.

Where does the U.S. stock market go from here? Are more new highs in the offing, or is a correction just around the corner? See what the experts from Schwab have to say below.

Have a wonderful week!

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After Reaching New Highs, Can Stock Market Rally Continue?

By Schwab Newsroom

It took 14 months and some rather unnerving dips along the way, but U.S. stocks finally climbed to new highs in July. The path ahead could be just as fraught. Stocks could still grind higher in the coming months, but there will likely be more moments that test your resolve.

“Volatility will continue to be elevated, but at this point we believe the U.S. economy should continue to show modest growth, helping to support similarly modest gains for equities,” says Liz Ann Sonders, senior vice president and chief investment strategist at Charles Schwab.

Here’s what you need to know about the market’s ascent and what could lie ahead for investors: [Read more…]

401k RFP Tips For Employers

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By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

Recently my Registered Investment Advisory (RIA) firm has been fortunate to receive a number of Requests For Proposals (RFPs) for investment advisory services. While I am grateful to receive these RFPs, I continue to be puzzled by how some plan sponsors choose to manage their RFP process. So, outlined below, I have provided some tips on how plan sponsors can optimize their 401k RFP process to ensure it produces the best possible result. [Read more…]

401k Investment Menu Best Practices

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By Robert C. Lawton, AIF, CRPS, President, Lawton Retirement Plan Consultants, LLC

How does your 401k investment menu compare to the marketplace? Do you have too many investment options or too few? Are you taking advantage of all the safe harbor options available to you? In this low return, low interest rate environment there is a new set of best practices to use for 401k investment menu construction that includes: [Read more…]