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Using Interest Rates to Fight Inflation: News for Financial Advisers

The latest for financial advisers: Making use of low interest rates to fight inflation; plus, year-end tax planning moves

A roundup of the latest news and reports of interest to financial advisers.

Where Clients Go Wrong in Predicting Life Expectancy: David Blanchett writes that care must be taken to ensure mortality assumptions are reasonable because errors in estimates can significantly impact a client's retirement plan.

6 Ways to Fight the Return of Inflation: Clients should find ways to make use of low interest rates while they’re still here, writes Harry Stout.

Six Tax-Conscious Planning Moves to Discuss with Clients Before 2021 Ends: Advisers don't how the tax laws will change, but they can still prepare, according to Financial Advisor.

Hit Retirement Home Runs with Clients by Taking Moneyball Planning Approach: Adopting a Moneyball approach can lead to better outcomes, writes Myles Womack.

Should Your Clients Buy a Home In The U.S.? Investing in housing in booming locations may not be as safe a long-term bet as many seem to think, writes Robert Shiller.

A Retirement Domino Theory: When people retire, both their good and bad decisions can have a domino effect, writes Robert Laura.

UBS Going After Affluent Clients with Digital Advice Service: The bank plans to roll out the service, as well as a digital bank, in 2022, writes Financial Advisor IQ.

Stop the ESG Nonsense: Recently there has been a backlash against ESG-based investing. Some of this backlash is on target; some of it is completely wrong. None of it, however, fully identifies the worst thing about the ESG industry, writes Michael Edesess.

Stress Testing Portfolio Risk Estimates: Geoff Considine explores how estimated portfolio loss potential changes with different estimates of asset volatilities.

How Mutual Funds Mislead Investors: New research shows that mutual funds routinely select the benchmark that provides the greatest degree of outperformance, writes Larry Swedroe. They even switch benchmarks if a different one will boost their performance numbers.

Research of Interest

Art in Times of Crisis

Art is often presented as an investment of last resort or a potential safe haven in times of political or financial distress. Yet, as no study has focused on the performance of art markets in times of crisis, this paper fills this gap by means of unclosing historical auction archives. The authors trace the long-term performance of the U.K. art market, which we relate to periods of crisis such as the world wars, economic recessions, inflationary periods, and changes in monetary policy. By constructing an art price index from 1908 to 2016, the authors show that the value of British art expanded more than seven-fold over this century. The authors classify crises into economic and financial crises, systemic ones, and war periods. The results show that art outperformed equities and other financial assets in war times, which implies that it could serve as a hedge against political uncertainties. However, in times of economic and financial crises, the art market underperformed the equity market. The authors also detail changes in art preferences for specific paintings’ sizes, art schools, art objects’ liquidity, art (price) segments, and art(ist)’s nationality across crises.