Fifty years ago this Monday, Jack Bogle's Vanguard launched its First Index Investment Trust, now known as the Vanguard 500 Index Fund. That event, which was greeted by ridicule at the time, revolutionized investing by creating a low-cost way for retail investors to gain exposure to the stock market. Passive index funds like the Vanguard 500 Index fund are how many investors invest today-as of 2024, there are more assets in passive funds than actively managed ones, according to Morningstar.
Among other most-read wealth management articles this week:
The midterms and markets. Only two months are left until U.S. citizens cast their midterm votes. The elections are likely to change the balance of power in Congress, with Democrats being odds-on favorites in betting markets to win the House of Representatives and Republicans holding only a narrow edge in the Senate race. A House or Senate flip could reshape the prospects for geopolitics, immigration, judicial confirmations, and more. For this week's Big Q feature, we queried four wealth management leaders about what the elections could mean for markets.
Robinhood rallies. Shares of Robinhood soared nearly 17% Thursday on a more favorable outlook for the company after several analysts published positive reports about the brokerage firm's stock. One bullish assessment came from Morgan Stanley analyst Michael Cyprys, who said Robinhood's efforts to expand its services for customers are bearing fruit. He raised his rating of Robinhood stock to Overweight from Equal-weight.
Vacation home blues. Family vacation homes can be more than just properties. They are sources of family bonding and warm memories. Think July Fourth barbecues, s'mores at the fire ring, and melted pink sunsets. But it is the emotional power of those family experiences that can turn vacation homes into such sources of friction when it comes to inheritance planning. Guest columnist Helen Andreoli offers a series of detailed tips to prevent that from happening.
Cetera's big recruiting win. Wealth management company Cetera recruited a financial advisor practice with approximately $2.1 billion in assets under administration from rival LPL Financial, adding to Cetera's recruiting streak. The practice, called Sierra Ridge Advisor Group, operates as an office of supervisory jurisdiction, providing additional resources to advisors that affiliate with it.
Interactive Brokers stock takes a hit. Shares of Interactive Brokers plunged Tuesday after the brokerage firm was removed from a curated list of top U.S. stocks from Goldman Sachs, although it retains a Buy rating from Goldman analyst James Yaro. The same day, the stock also received a lukewarm welcome from UBS analysts assuming coverage of it. They gave it a Neutral rating and said, "We view IBKR as a best-in-class broker with a compelling growth runway, but believe the stock already reflects much of that advantage." The stock has since recovered some of this week's losses.
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