Weekly Market RecapThis week saw mixed housing and good jobs data in the US. Europe saw further progress on the Greek bailout. Various US firms reported quarterly earnings. Declines from companies including IBM, Caterpillar and Microsoft on weaker than expected results offered a timely reminder on how stock picking can potentially lead to a volatile portfolio. With bad headlines from Russia, Greece and China in recent months it can be tempting to shy away from international diversification in favor of a US-centric portfolio. But, did you know that Russia and China, despite their volatility, are among two of the best performing markets in dollar-terms so far in 2015? They are both up over 10% respectively this year. This comes at a time, when certain US benchmarks, like the Dow, are now in negative territory for the same period. Of course, Greek stock markets have been weak, but Greece remains a very small part of the European stock market which is, in aggregate, ahead of the performance of US stock markets year-to-date. So actually, many of the regions you might expect to be dragging down an international portfolio, given recent panic inducing headlines, are actually helping it this year. Nonetheless, what has been a drag on international portfolios over the past year has been the US dollar. The dollar has risen approximately 14% against a trade-weighted basket of currencies over the past 12 months. This is a drag on foreign returns, especially for stock markets in Australia, Canada and the UK recently. Perhaps more importantly, currency moves have a tendency to be self-correcting over the medium term for your portfolio. This is because of how flows of exports react to currency moves. A strong dollar generally makes US exports more expensive. This has the effect of helping foreign firms as their exports grow and hindering domestic firms. As such, we believe the stronger dollar may signal better growth prospects for stocks outside the US in future. In fact, many US companies have mentioned the headwind of a strong dollar as they reported earnings recently. Overall, whether the US or foreign markets perform better depends on the time period you look at. Historically, foreign developed markets outperformed the US in the 1970s, 1980s and 2000s, but lagged in the 1990s and in the past few years. Yet, with our investment approach the goal is not to pick a single winner, but rather combine countries in your portfolio for lower volatility. Looking back to 1970, our analysis shows that an internationally diversified portfolio has consistently been lower risk than holding any region or country in isolation. Finally, remember that the US market currently may be relatively expensive relative to both other countries and its own history on a medium-term basis. It has a cyclically adjusted price to earnings ratio of 27 currently. Most would agree that that is high relative to history. Though we don't believe it's possible to predict the markets in the short term, this relatively high US valuation is another reason why we believe that long-term investors be internationally diversified. Disclaimer: Your Portfolio Summary
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Saturday, July 25, 2015
Your Weekly Update - Greece Makes Bailout Progress
Sunday, July 19, 2015
Your Weekly Update - The Role Of Bonds In Your Portfolio
Weekly Market RecapThe US economy appears to remain on track. At a high level, US unemployment at 5.3% is significantly down from its 10% peak in 2009 and the US has delivered a stronger performance in recent years than many developed nations. The first quarter in the US was weak due to what are believed to be transitory factors, and more recent data points to improvement. The Fed also sees Europe on a "firming footing", more-so than in recent history and, over the past week, Greece has approved measures for a new bailout. This week we want to discuss the role of bonds in your portfolio. The returns for bonds have historically been more stable than returns for stocks on a year-to-year basis. We focus your portfolio on high credit quality bonds, with a general bias to those issued by governments in developed markets. Based on our research, these bonds are generally considered less risky than bonds issued by corporations. Finally we diversify bond exposure by including TIPS which we expect to help protect your portfolio from unexpected inflation. In our view, bonds help bring balance and add stability to a portfolio. You may have noticed this in recent weeks as your bond holdings rose in value at times when concerns for the broader market grew. This is what we expect. Bonds have the potential to deliver relatively stable income over time, but given their high credit quality, can also protect your portfolio at times when stocks are weak. For example, in both the 1930s and 2000s, decades which contained multiple recessions, US government bonds outperformed US stocks. This is unusual, but can happen when growth is weak. This speaks to the value of diversified portfolio construction. Historically stocks and bonds in combination have delivered a smoother return than stocks in isolation. And with smoother returns, investors are more likely to stick with their long-term plan. Bonds can be particularly helpful to returns when stock markets are weak. We also note that some investors have concerns about holding bonds in a rising rate environment. Historical analysis suggests that bonds can perform better than expected when rates rise. In addition our fixed income portfolio is globally diversified and the US is one of few countries expected to raise rates, other nations are currently reducing rates. Our recent Forbes piece on the value of bonds is here: Disclaimer: Your Portfolio Summary
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Wednesday, July 15, 2015
Fwd: Betterment
Agreement This agreement (the "Agreement") is entered into between Betterment LLC ("Betterment") and MTG, LLC d/b/a Betterment Securities ("Betterment Securities"), on one hand, and the registered investment advisor that is signatory to the Agreement ("Advisor"), on the other hand. The Agreement is effective as of the date Advisor provides Advisor's electronic signature.
WHEREAS, Advisor has entered into investment advisory agreements with Advisor's Clients (as defined below);
WHEREAS, the separate investment advisory agreements between Advisor and certain of Advisor's Clients provide Advisor with discretionary authority over the investment of Advisor's Clients assets;
WHEREAS, Betterment provides, among other things, software, advice, and digital services on a sub:advisory basis to the clients of registered investment advisors as part of an institutional service;
WHEREAS, Betterment Securities provides, among other things, custody and brokerage services to the clients of registered investment advisors that have engaged Betterment in connection with Betterment's institutional service; and
WHEREAS, Advisor and certain of Advisor's Clients desire to retain Betterment and Betterment Securities to provide Betterment and Betterment Securities's services to Advisor and certain of Advisor's Clients in the manner and on the terms set forth in the Agreement, and Betterment and Betterment Securities are willing to provide such services;
NOW THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Betterment, Betterment Securities, and Advisor hereby covenant and agree as follows:
1. Definitions.
Capitalized terms not otherwise defined in the Agreement shall have the definition provided in this section. Account. The brokerage account at Betterment Securities established in Client's name alone, in Client's name together with others, or in which Client has beneficial interest if the Account is an IRA.
Betterment. Betterment LLC, a Securities and Exchange Commission Registered Investment Advisor located at 61 West 23rd Street, 5th Floor, New York, NY 10010. Also Betterment's officers, directors, employees, representatives, successors, assigns, and authorized agents. Betterment, its agents, service providers, or its affiliates acting on behalf of Betterment under the Agreement are authorized to perform the services contemplated by the Agreement. For purposes of the Agreement, references to affiliates of Betterment include their respective officers, directors, employees, representatives, agents, successors, and assigns. Betterment Institutional. The platform for Advisors and Clients, as described on the Website, being contracted for in the Agreement. Betterment Securities. MTG, LLC, a FINRA member Broker:Dealer located at 61 West 23rd Street, 5th Floor, New York, NY, 10010, doing business as Betterment Securities. Also Betterment Securities's officers, directors, employees, representatives, successors, assigns, and authorized agents. Betterment Securities, its agents, service providers, or its affiliates acting on behalf of Betterment Securities. For purposes of the Agreement or the Brokerage Agreement, references to affiliates of Betterment Securities include their respective officers, directors, employees, representatives, agents, successors, and assigns. Client. A natural person, corporation, partnership, trustee, custodian, or other entity with which Advisor has entered into a separate investment advisory agreement, through which Advisor has discretionary authority to invest the assets of Client and has elected to engage Betterment and Betterment Securities to provide sub:advisory services and related services on its behalf. Interface. The collection of tools, features, adjustments, inputs, and other controls within the Website which are provided to establish and manage the Account and access the Sub:Advisory Services. Products. The investment products offered as part of the Sub:Advisory Services. Products may, but will not necessarily, include any of the following: exchange traded index funds, mutual funds, other similar equity related index funds, stocks, bonds, real estate investment trusts, master limited partnerships, money market funds, U.S. treasury funds, cash sweep accounts, and other liquid cash and cash:like vehicles. Website. World Wide Web sites and mobile applications operated by Betterment, including www.betterment.com and www.bettermentinstitutional.com, through which the Sub:Advisory Services are administered and, among other things, the Account is established, accessed, and managed by the Client and Advisor, and Account related information is made available. The Interface is part of the Website.
2. Retention of and Acceptance by Betterment. Advisor hereby retains Betterment to provide Sub:Advisory Services (as detailed below) to Advisor with respect to Clients' Accounts upon the terms and conditions set forth herein, and Betterment hereby accepts such retention and agrees to render the services set forth herein. Advisor acknowledges that certain of Betterment's Sub:Advisory Services are services that Advisor does not independently provide, and Betterment acknowledges that Advisor provides certain investment advisory services that Betterment does not independently provide.
3. Compensation. In consideration for the Sub:Advisory Services performed by Betterment hereunder, Clients' Accounts shall pay to Betterment an advisory fee in respect of the Accounts, which shall be computed and payable in accordance with the terms in Betterment's direct agreement with the Client. Additionally:
(a) Advisor, Betterment, and Betterment Securities shall each contract separately and directly with each Client with respect to each party's advisory, brokerage, and custody fee arrangements ("Fees"). The terms of each party's Fees from the Client are to be documented and communicated to the other party via the Website.
(b) Betterment's separate agreements with Clients provide authority for Betterment to directly debit the Advisor's Fees from Clients' Accounts, as set forth in the separate investment advisory agreements between Advisor and Clients, and to disburse Advisor's Fees to Advisor.
(c) Betterment shall collect the Fees on a quarterly basis for the prior quarter.
(d) The Fees in total shall not exceed 150 basis points per annum.
4. The SubIAdvisory Services. Betterment shall provide the following services to Advisor and Client pursuant to the Agreement for any Client that separately agrees to Betterment and Betterment Securities agreements (the "Sub:Advisory Services"):
(a) Betterment shall, subject to the supervision and oversight of the Advisor, and consistent with the Client's Investment Policy Statement (the "IPS", as defined below), manage the investment and reinvestment of assets in the Account, including the purchase and sale of any Products. Pursuant to the Sub:Advisory Agreement between Betterment and Client, Betterment shall manage the Client's Account on a discretionary basis and act as Client's attorney:in:fact with limited power:of:attorney and authority for Client and on Client's behalf to buy, sell, and otherwise effect investment transactions in the name of the Account in accordance with the parameters set forth in the IPS.
(b) Betterment shall recommend an investment plan to Client via the Interface that is based on Betterment's investment methodology regarding asset allocation strategies, ongoing portfolio management, and certain information and preferences provided by Advisor and/or Client (the "IPS"), information
about which may be found on the Website. Advisor and Client may adjust the IPS via the available options in the Interface in order to provide further input for Betterment's discretionary investment management. The IPS memorializes the investment goals and strategic management policies governing the Client's Account.
(c) Betterment shall provide to Clients and Advisors the services and features presented on the Website as currently available for Betterment Institutional users, respectively, under the terms provided on the Website. By way of example:
a. Betterment shall provide Advisor with rights to access, view, and make certain changes in the Interfaces of Clients who have an Account.
b. Advisor will not be permitted to make withdrawals or deposits of funds, establish any sources for funding an Account or destinations for withdrawals from an Account, and will not have the authority to establish new Accounts on a Client's behalf.
(d) Unless otherwise agreed to by Betterment and Advisor in a signed writing, Betterment shall determine the Products available for inclusion in the Sub: Advisory Services. Betterment may change the Products available for inclusion in the Sub:Advisory Services without notice to Advisor or Client, provided that those Products have daily liquidity.
For avoidance of doubt, Betterment is solely responsible for providing the Sub:Advisory Services in connection with the Account, independent of any other investment advisory services Advisor may have agreed to provide to Client. Betterment is not contracting to provide any other investment advisory services to Advisor or Clients outside of Clients' Accounts. 5. Exclusivity. Each of the parties acknowledges and agrees that (a) each will manage accounts and perform investment advisory services for others apart from under this Agreement; (b) depending upon investment objectives and cash availability, each may sell a particular Product for certain accounts, and buy such Product for other accounts and, accordingly, transactions in particular accounts may not be consistent with transactions in other accounts or with some of such party's investment recommendations; (c) where there is a limited supply of a Product, each will use its best efforts to allocate or rotate investment opportunities, but that absolute equality among all of Betterment's Accounts and Clients cannot be assured; and (d) each party, its directors, officers, employees, or agents may from time to time have an interest, direct or indirect, in a Product which is purchased, sold, or otherwise traded for an Account, and such party may effect transactions in such products for an Account which may be the same as or different from the action which such party and/or such other persons may take with respect thereto for its or other accounts.
6. Brokerage Services. Advisor and Betterment hereby agree to accept Clients' appointment of Betterment Securities as broker:dealer and custodian for Clients' Accounts in connection with Betterment's Sub:Advisory Services. Betterment Securities accepts such appointment and shall provide custody and brokerage services for each Client's Account, per Client's appointment and pursuant to a separate agreement between Client and Betterment Securities. Advisor and Betterment acknowledge that the Client's self:directed appointment of Betterment Securities for brokerage services may not result in the lowest commissions and/or custody fees.
7. Responsibilities of Advisor. In connection with any Account of Advisor's Clients, the Advisor shall:
(a) Be responsible for monitoring each Account on an ongoing basis.
(b) Ensure that each Client's personal information on the Website is accurate and
up to date. 8. Responsibilities of Betterment. In connection with any Advisor's Clients' Accounts, Betterment shall:
(a) Manage the Clients' Accounts on the basis of the financial situation and investment objectives provided to Betterment by Advisor and/or Clients and in accordance with any reasonable restrictions imposed.
(b) Maintain a compliance program in accordance with the requirements of the Advisers Act.
(c) Maintain policies and procedures and controls reasonably designed to address business continuity and/or disaster recovery while continuing to safeguard any information regarding the Account.
9. Representations and Warranties of the Parties.
(a) Betterment and Advisor represent and warrant to the other that: (i) the performance of its obligations hereunder does not violate any law or regulation of a governmental body having jurisdiction thereon, or any right of any third party, including, but not limited to, any property (including intellectual property) or privacy right; and (ii) it has all the necessary legal and corporate authority to enter into and perform under this Agreement.
(b) Advisor represents and warrants to Betterment as follows:
a. Advisor is an investment advisor registered with the Securities and Exchange Commission as such under the Investment Advisers Act of 1940 and/or all State regulatory bodies with which Advisor is required to be registered, and at all times during the effectiveness of this Agreement shall remain so.
b. Each employee at Advisor who provides investment advisory services is duly licensed with State and/or Federal authorities as required by
(c) Betterment represents and warrants to Advisor as follows:
a. Betterment is an investment advisor registered with the Securities and Exchange Commission as such under the Investment Advisers Act of 1940 and/or all State regulatory bodies with which Betterment is required to be registered, and at all times during the effectiveness of this Agreement shall remain so.
b. Betterment shall prepare and retain all records relating to the accounts and its services hereunder required by applicable law.
c. Betterment shall have responsibility for providing Betterment's Form ADV and privacy policy to Client. Betterment shall provide a copy of Betterment's Form ADV and privacy policy to Client when Client first signs up for the Account, and shall subsequently provide a copy of Betterment's Form ADV to Client upon any material amendment (at a minimum, on an annual basis as required).
d. Betterment has the experience and knowledge in the area of investments and management of client accounts dedicated to such investments necessary to perform its obligations under this Agreement.
e. Betterment will notify Advisor immediately in writing if any representation or warranty Betterment makes hereunder becomes incorrect for any reason.
10. Account Information. Each of the parties acknowledges and agrees that information about it and any of the Accounts may be shared by each of them with their affiliated companies and also may be shared by them with unaffiliated companies solely for use in connection with management of Betterment and fulfillment of their respective obligations under this Agreement. Neither Betterment nor Advisor shall share private information relating to the Accounts with any person or entity other than as aforesaid and as permitted or required by applicable law. 11. Confidential Information. Each of Betterment and Advisor agree to maintain the confidentiality of the terms of this Agreement, each party's trade secrets and any documents or information supplied by either party that is not otherwise in the public domain or previously known to the other party relating to the business of each respective party, (collectively, the "Confidential Information"). In particular, the parties will not disclose the Confidential Information to any outside party (expect as required by law, judicial process or regulation or upon request by a regulator having jurisdiction over such party), the parties will not use the Confidential Information for any purpose other than the performance of their respective obligations under this Agreement, and will use their best efforts to prevent the unauthorized disclosure of all Confidential Information.
12. Liability and Indemnification.
(a) Liability. The duties of each of Betterment and Advisor shall be confined to those expressly set forth in this Agreement. Except with regard to claims indemnifiable under Section 12(b), neither Betterment nor Advisor shall have liability for any indirect, incidental, consequential, special, exemplary, or punitive damages to each other even if Betterment or Advisor, as the case may be, has been advised of the possibility of such damages. Betterment shall not be liable for any loss arising out of any investment or disposition hereunder, except a loss directly resulting from willful misfeasance, bad faith, or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder. Furthermore, under no circumstances shall Betterment be liable for any loss arising out of any act or omission taken by Advisor, another sub:advisor, or any other third party, in respect of any portion of a Client's assets not managed by Betterment pursuant to this Agreement and the separate Sub:Advisory Agreement between Betterment and Client. Notwithstanding the foregoing, nothing herein shall be deemed to relieve Betterment or Advisor of any liability it would otherwise have under applicable federal securities laws. Except as expressly set forth herein, neither party makes any warranty, express or implied, statutory or otherwise, as to any matter whatsoever.
(b) Indemnification. (i) The Advisor shall indemnify Betterment and Betterment Securities (the "Indemnified Parties") for any liability and expenses, including reasonable attorneys' fees, arising from, or in connection with, Advisor's breach of this Agreement or its representations and warranties herein or as a result of Advisor's willful misfeasance, bad faith, negligence, reckless disregard of their duties hereunder or violation of applicable law; provided, however, that the Indemnified Parties shall not be indemnified for any liability or expenses that may be sustained as a result of the Indemnified Parties' willful misfeasance, bad faith, negligence, or reckless disregard of its duties hereunder. Further, Advisor shall indemnify the Indemnified Parties for any liability and expenses, including reasonable attorneys' fees, arising from, or in connection with, any investment decision Advisor makes with respect to an Account or any decision or modification Advisor makes in or to a Client's Interface; and (ii) Betterment shall indemnify Advisor for any liability and expenses, including reasonable attorneys' fees, arising from, or in connection with, Betterment's breach of this Agreement or its representations and warranties herein or as a result of Betterment's willful misfeasance, bad faith, negligence, reckless disregard of their duties hereunder or violation of applicable law; provided, however, that Advisor shall not be indemnified for any liability or expenses that may be sustained as a result of the Advisor's own willful misfeasance, bad faith, negligence, or reckless disregard of its duties hereunder. Further, Betterment shall indemnify Advisor for any liability and expenses, including reasonable attorneys' fees, arising from, or in connection with, any investment decision Betterment makes with respect to an Account.
13. Access Interruptions. Advisor understands that neither Betterment Securities nor Betterment guarantee that access to the Website and Account via the Interface will be available all the time. Betterment Securities and Betterment reserve the right to reasonably suspend access without prior notice for scheduled or unscheduled system repairs or upgrades. Further, access to the Website, and hence, the Account, may be limited or unavailable due to, among other things: market volatility, peak demand, systems upgrades, maintenance, any kind of interruption of the services provided by Betterment Securities or Betterment's ability to communicate with Betterment
Securities, hardware or software malfunction or failure, internet service failure or unavailability, the actions of any governmental, judicial, or regulatory body, and force majeure. Advisor agrees that neither Betterment nor Betterment Securities will be liable to Advisor for losses of any kind incurred by Advisor resulting from such access limitations or unavailability. 14. Access Suspension. Betterment, at its sole discretion, may prevent Advisor or any of its directors, members, officers, partners, managers, or employees from accessing the Interface without prior notice to Advisor. Upon suspension, Betterment will contact Advisor and explain the reason for the suspension and work with Advisor to address any issues or concerns.
15. Termination.
(a) The Agreement may be terminated by either Betterment or Advisor upon thirty (30) days written notice of such termination delivered to the other party.
(b) Termination of the Agreement shall not affect the right of the Advisor or Betterment to receive payment on the unpaid balance of Fees payable under the Agreement and earned prior to such termination.
(c) Upon termination of the Agreement in accordance with Section 15(a), Betterment shall, unless instructed otherwise by Advisor, offer Advisor's Clients the option to terminate Client's relationship with Betterment and shall not interfere with Advisor's efforts to move Advisor's Clients to another platform. However, if Client does not request to terminate Client's Account(s) with Betterment within 90 days Betterment shall consider such account(s) abandoned by Advisor and keep Client's Account(s) with Betterment under a new agreement if Betterment so desires.
(d) If Advisor and a Client terminate their investment advisory relationship for any reason, Advisor shall immediately notify Betterment. Betterment will offer such Client the option to terminate Client's relationship with Betterment. However, if Client does not request to terminate Client's Account(s) with Betterment within 90 days, or contacts Betterment during this period and requests to remain with Betterment under a new agreement, Betterment shall keep Client's Account(s) with Betterment under a new agreement if Betterment so desires.
(e) Advisor cannot close an Account on behalf of a Client. Clients must terminate their own account in accordance with the procedures provided in Betterment and Betterment Securities's separate agreements with Clients.
16. Survival. The provisions of Sections 12, 15, 25, and 26 shall survive the termination of the Agreement.
17. Amendment. The Agreement may only be modified, or any rights under it waived, by the parties' mutual written consent. For purposes of this section, however, Advisor shall be deemed to consent to an amendment of the Agreement by not objecting in writing within 30 days to any amendment to the Agreement Betterment provides via email to Advisor.
18. Assignment. Neither party may assign the Agreement without the other party's prior written consent, provided however that Betterment shall have the right to assign this Agreement to an affiliate of Betterment without prior written consent.
19. Independent Contractor Status. Betterment shall for all purposes hereof be deemed to be an independent contractor. Unless otherwise provided or authorized herein or by applicable law or regulation, neither party has the authority to bind or make any commitment on behalf of the other party. None of either party's employees are entitled to any employment rights or benefits of the other party.
20. Intellectual Property. All right, title, copyright, and other interest in and to any part of or all of the Website and any other Betterment system, software, or technologies shall at all times remain the sole and exclusive property of Betterment.
information regarding any party's customers or consumers is disclosed to the other
Updated: October 14, 2014. Copyright © Betterment LLC and Betterment Securities 2010 – 2014. All rights reserved.
party in connection with this Agreement, the other party receiving such information will not disclose or use that information other than as necessary to carry out the purposes of this Agreement. 23. Miscellaneous. The heading of each provision of the Agreement is for descriptive purposes only and will not be deemed to modify or qualify any of the rights or obligations set forth in each such provision.
24. Notices. All written notices to Advisor under the Agreement shall be sent to Advisor in electronic form through the email address Advisor keeps on record with Betterment. All written notices to Betterment under the Agreement shall be sent to Betterment at partners@betterment.com. The parties may mutually agree to provide notices in an alternative fashion.
25. Severability. If one or more of the provisions contained in the Agreement is determined to be invalid, illegal, or unenforceable in any respect under any applicable statute or rule of law, then such provision will be considered inoperable to the extent of such invalidity, illegality, or unenforceability, and the remainder of this Agreement will continue in full force and effect. 26. No Construction Against Drafter. The parties are sophisticated and have had the opportunity to be represented by their separate attorneys throughout the transactions contemplated by the Agreement. As a consequence, if an ambiguity or a question of intent or interpretation arises, the Agreement is to be construed as if the parties had drafted it jointly, as opposed to being construed against a party because it was responsible for drafting one or more provisions of the Agreement. 27. Entire Agreement. The Agreement is the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding and replacing any and all prior agreements, communications, and understandings (both written and verbal) regarding such subject matter.
28. Dispute Resolution. IN THE EVENT OF ANY DISPUTE OR DISAGREEMENT BETWEEN THE PARTIES HERETO EITHER WITH RESPECT TO THIS AGREEMENT OR THE SUBJECT MATTER THEREOF, EACH PARTY WILL APPOINT A REPRESENTATIVE WHOSE TASK IT WILL BE TO MEET WITH THE REPRESENTATIVE APPOINTED BY THE OTHER PARTY FOR THE PURPOSE OF ENDEAVORING TO RESOLVE SUCH DISPUTE OR DISAGREEMENT. NO FORMAL PROCEEDINGS FOR THE RESOLUTION OF SUCH DISPUTE OR DISAGREEMENT MAY COMMENCE UNTIL EITHER ONE OF THE TWO REPRESENTATIVES CONCLUDES IN GOOD FAITH THAT AN AMICABLE RESOLUTION THROUGH CONTINUED NEGOTIATIONS OF THE MATTER DOES NOT APPEAR LIKELY. ANY SUCH DISPUTE OR DISAGREEMENT SHALL BE RESOLVED BY ARBITRATION PURSUANT TO THIS SECTION, AND IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA"). IF THE PARTIES CANNOT AGREE UPON AN
ARBITRATOR, ARBITRATION SHALL BE CONDUCTED BY A NEUTRAL ARBITRATOR SELECTED BY THE AAA WHO IS KNOWLEDGEABLE IN FINANCIAL SERVICES. THE PLACE OF ARBITRATION SHALL BE IN NEW YORK, NEW YORK WITH THE LAWS OF THE STATE OF DELAWARE APPLIED TO THE PROCEEDINGS WHERE FEDERAL LAW DOES NOT GOVERN. THE PROCEDURAL COSTS OF ARBITRATION SHALL BE BORNE EQUALLY BY THE PARTIES AND EACH PARTY SHALL BE RESPONSIBLE FOR ITS OWN ATTORNEYS' FEES, UNLESS THE ARBITRATOR AWARDS OTHERWISE. THE ARBITRATOR'S AWARD SHALL BE IN WRITING, AND SHALL INCLUDE A STATEMENT OF REASONS. THE ARBITRATOR'S DECISION AND AWARD SHALL BE FINAL AND BINDING AND MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY SEEK PRELIMINARY RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS OR OTHER EQUITABLE RELIEF FROM A COURT OF COMPETENT JURISDICTION PRIOR TO COMMENCING OR PENDING THE COMPLETION OF THE PROCEDURE SET FORTH HEREIN. 29. Electronic Signature. Advisor's intentional action in electronically signing the Agreement is valid evidence of consent to be legally bound by the Agreement. The electronically stored copy of the Agreement is considered to be the true, complete, valid, authentic, and enforceable record of the Agreement, admissible in judicial or administrative proceedings to the same extent as if the documents and records were originally generated and maintained in printed form. Advisor agrees not to contest the admissibility or enforceability of Betterment's electronically stored copy of the Agreement in any proceeding arising out of the terms and conditions of the Agreement. If the individual who electronically signed the Agreement did so on behalf of a corporation or other entity, the individual represents and warrants that they have all the necessary legal and corporate authority to enter into this agreement on behalf of the corporation or other entity. 30. B+ Institutional Services, LLC as solicitor for Betterment LLC. B+ Institutional Services LLC, a SEC Registered Investment Advisor ("B+"), and Betterment LLC, a SEC Registered Investment Advisor ("Betterment"), have entered into a written agreement whereby B+ has undertaken to introduce to Betterment certain investment advisors or organizations who may have an interest in Betterment's sub:advisory services. In return for B+'s solicitation services under this separate agreement, Betterment has agreed to pay B+ 40% of the fees generated from Betterment's Wrap Fee Program (described in Part 2 to Betterment LLC's Form ADV). B+ is not authorized to enter into any agreement or undertaking on behalf of Betterment with any person(s) or organization(s). Neither Advisor, Clients, nor any other person or organization solicited by B+ on behalf of Betterment who subsequently becomes a client of Betterment will be charged for the solicitation activities of the Solicitor. All referral fees paid to B+ represent a portion of the fees actually charged by Betterment for the Wrap Fee Program. There is no differential between the amount or level of investment advisory fees that Betterment will charge for managing Client accounts in excess of that which it
would customarily charge for managing any other new client with similar assets and which was not referred to Betterment by an advisor or organization introduced by B+.
Saturday, July 11, 2015
Your Weekly Update - China makes biggest daily gain in 6 years
Weekly Market RecapDespite ending the week on a high note, China is attracting headlines based on its volatile stock market in past weeks. Essentially Chinese retail investors borrowed money to purchase stocks speculatively. This trend reversed recently, causing prices to decline 30% off June highs. However, the Chinese government has been extremely focused on stopping the decline with a multitude of measures, and are apparently having some success as the Chinese markets resumed their rise late this week. Despite the recent decline, the Chinese market remains up over 20% year to date and over 90% on a 1 year view, well ahead of most other major markets. China has also outperformed the US market over the past decade. At FutureAdvisor, we believe that the volatility experienced in emerging markets can be managed by employing a diversified portfolio and that the emerging markets allocation will reward long-term investors. In Europe, after last week's "no" vote in the Greek referendum, the Greek government may agree to a new deal with the EU on further lending over the weekend. This could bring the recent episode in Greece to a close. Despite Greece, an important story in Europe this year appears to be the improving economies of France, Italy and Spain. These nations are all set for much improved economic performance this year based on IMF forecasts. France, Italy and Spain combined are over twenty times larger than the Greek economy. As Benjamin Graham said "In the short run, the market is a voting machine but in the long run, it is a weighing machine." Graham is the man who taught Warren Buffett to invest. His words have been timely this week, as the markets have alternated between fear and greed on a daily basis. Research shows that long-term investors who adhere to a well diversified strategy are rewarded, and often those who trade on short-term emotion fare less well. Recent weeks have also brought opportunities for tax-loss harvesting and automated rebalancing for Premium customers to help increase their after tax returns. Disclaimer: The views expressed herein are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Past performance is not indicative of future results. The tax loss harvesting strategy discussed should not be interpreted as tax advice and it does not represent in any manner that the tax consequences detailed will be obtained or that its tax loss harvesting strategy will result in any particular tax consequence. Clients should consult with their personal tax advisors regarding the tax consequences of investing. Your Portfolio Summary
Ways To Improve Your Portfolio
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Thursday, July 9, 2015
Fwd: Congratulations, we just got another 5 years of the US dollar
From: Simon Black <admin@sovereignman.com>
Date: Thu, Jul 9, 2015, 10:38 AM
Subject: Congratulations, we just got another 5 years of the US dollar
To: <mrpiebald@gmail.com>
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Sunday, July 5, 2015
Your Weekly Update - Greece Makes Headlines
Weekly Market RecapGreece has dominated the attention of financial markets this week. The Greeks will vote a referendum this Sunday to decide on their appetite for further austerity measures. However, it's important to remember that Greece has defaulted at least five times in the past, and Greece is small both in terms of its economic output and stock market. Hence if Greece does default it will not be unprecedented and the long-term impact is likely to be small. In fact, Greek GDP has declined an astonishing 25% under recent austerity measures and the Greek unemployment rate is the highest in the EU, so though it will likely entail short-term disruption, a Greek default could potentially even improve the nation's growth prospects relative to recent history. Defaults are not unusual, if that proves to be the outcome for Greece. Last year Argentina defaulted on its debt and the impact on global markets was minor. Equally last year, both Russia's invasion of Crimea and the Ebola crisis were causes for significant concern at the time, but ultimately a limited impact on global markets last year, which have made all time highs after these events. Our research shows that investors who react to short term news headlines often lose out on future returns. At FutureAdvisor we recommend portfolios that are constructed to help manage the ups and downs of the global markets and always with a long term view in mind. For example, on Monday when the markets were weak we saw fixed income positions within the portfolio rise in value as expected, and international diversification was also valuable. In this case Japan and the Yen performed relatively well in the face of broader market declines. Contrary to our stable approach, making short-term moves in your portfolio can hurt longer term returns due to the opportunity cost of being out of the market and the direct costs of trading. If you'd like to try our Premium service, we're currently offering 6 months free for you to enjoy the benefits of our allocation, automatic rebalancing and tax efficient processes, but this offer ends at midnight Pacific Time this Sunday (July 5). Disclaimer: Your Portfolio Summary
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