FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Penny stocks are hurting your portfolio (Openfolio)
According to data from Openfolio, investors who have penny stocks in their portfolio "are 3x more likely to have lost money in 2014." Holders of penny stocks lost an average of 3.3% in 2014 while investors without penny stocks in their portfolios averaged a gain of 8.3%.
The percentage of penny stocks in a portfolio also had an impact as those with more than 20% averaged a 13.1% decline, compared to just a 3.3% drop for portfolios with a make up of less than 5%.
SuperGroup's CFO resigns after personally declaring bankruptcy (Business Insider)
Shaun Wills, the Chief Financial Officer of SuperGroup has resigned after personally declaring bankruptcy. "This decision was made upon the board becoming aware on 24 February 2015 that Shaun was made the subject of a personal bankruptcy order on 10 February 2015," according to a statement released by the company.
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Do people who have a 401(k) also need an IRA? (Charles Schwab)
Charles Schwab suggests a case can be made for having an IRA in addition to a 401(k). Which IRA is right for you? That depends on your income. For a Traditional tax-deductible IRA "the levels are $61,000-$71,000 for single filers, $98,000-$118,000 for married filing jointly," while the levels for a Roth IRA "are $116,000-$131,000 for single filers, $183,000-$193,000 for married filing jointly."
Interest in cash balance plans is growing (Financial Planning)
A recent Internal Revenue Service ruling has sparked a notable shift into cash balance plans, which allow "highly compensated participants to accelerate tax-deferred savings at a much higher rate than is possible with more common 401(k) plans." The new ruling "allows for ICRs to match “actual rate of return” estimates, permitting as much as 6%."
Employers are hiring more, and that will hurt wage growth (Bloomberg)
The large amount of employees re-entering the US labor force is likely to prevent a big jump in wages. Data released by the Bureau of Labor Statistics shows newer entrants into the labor force are seeing a notable increase in job offers. According to Bloomberg, "An expanded pool of able and willing workers keeps the unemployment rate from falling as fast as it otherwise would. The increased supply keeps companies from confronting a staffing shortage, which would force them to raise wages to attract talent."
