Performance Goals in Executive Compensation
Annual Incentive Plans play a crucial role in improving short-term performance by setting performance metrics such as EPS, sales, and non-financial measures. Research explores how corporate boards determine performance goals and the influence of managers in the process.
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Housekeeping Internal Use Only- Advisor Education Dates: o November 14th: Investment / AUM Boot Camp in SLC o January 9th: 2020 Kick-Off Meeting in SLC Trade War (the good one): o No commissions on most trades (still some exceptions) o Most SMA minimums at TSC will be going down New Trader: o Brian Haley / 11 years US Bank Year End Prep: o Account reviews o Tax-loss harvesting & donations-in-kind
SMA Data Matrix Internal Use Only- Advisor Education
SMA Style Charts Internal Use Only- Advisor Education Internal Use Only- Advisor Education
SMA Risk Return Chart Internal Use Only- Advisor Education
SMA Correlation Chart Internal Use Only- Advisor Education
S&P 500 YTD Source: Baird 9/30/19
10 yr return data by asset class Source: Baird 9/30/19
Decade long winners: U.S. and Growth Stocks For most of the past decade: The US has trounced Int l stocks Growth stocks have outpaced value Source: Baird Market Chartbook , Q2 2019, data as of June 30, 2019
International stocks much cheaper than US Forward price to earnings ratio is a bottom-up calculation based on the most recent index price, divided by consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Returns are cumulative and based on price movement only, and do not include the reinvestment of dividends. Dividend yield is calculated as consensus estimates of dividends for the next 12 months, divided by most recent price, as provided by FactSet Market Aggregates. Past performance is not a reliable indicator of current and future results.
Earnings drive stock prices From 1960 thru 2017: Average annual earnings growth is 6.42% (S&P 500) The avg. annual return of the S&P 500 is 6.44% (not including dividends) Source: Columbia Threadneedle. 1/1/1960 to 12/31/17 using S&P 500 returns not including dividends reinvested.
The market has been getting cheaper The S&P 500 is up 4% from Feb 2018. Earnings of those 500 companies are 49% higher. The market is cheaper than in Feb 2018. Source: FactSet Quarterly Earnings Update as of Sept 30, 2019. Q4 2017 SP500 earnings were $26.96 per share. Q3 2018 SP500 earnings were $40.12
First time in 50 years Source: Atlanta Federal Reserve Data as of April 30, 2019
The recoveries have been trending longer * Source: JP Morgan Guide to the Markets, Q4 2019, Data as of Sept 30, 2019 Chart assumes current expansion started in July 2009 and continued through June 2019, lasting 123 months so far. Data for length of economic expansions and recessions obtained from the National Bureau of Economic Research (NBER). These data can be found at www.nber.org/cycles/ and reflect information through Sept 2019. Past performance is not a reliable indicator of current and future results.
Household balance sheets look good Source: JP Morgan Guide to the Markets, Q4 2019, Data as of Sept 30, 2019
Mortgage rates Source: Bilello Research 9/6/19
New home sales Source: Calculated Risk 8/23/19
Solid GDP growth stable inflation Source: Baird 9/30/19 Source: Baird 9/30/19
Investors feel very negative Source: Bespoke 10/10/19
Investors are NOT bullish Source: Bespoke 9/30/19
But the market has gone up a lot. From 1950 to 2017, the S&P 500 spent roughly 32% of its life within 5% of its all time high.
82% of the time when the S&P 500 makes a new all-time-high, the market is even higher six months later. (S&P Corporation, 1950-2018)
Most years are positive with large selloffs Since 1950, the S&P 500 has averaged an 11.0% annual gain. But the average intra-year drop has been nearly 14%.
Time horizon is critical Source: Bilello Research
Tariffs are hurting China Source: Bloomberg
Tariffs are hurting China Source: Bloomberg
Markets are betting on a Trump re-election Source: Prediict
Impeachments and stocks Source: Bianco
Fed still expected to be on an easing course Internal Use Only- Advisor Education Fed economic indicators point to lukewarm growth Unemployment rate lowest this century at 3.50%, but non-farm payrolls moving average below 200k GDP growth running at 2.0% Retail Sales showed unexpected weakness in Sept. at -0.1% Tariff wars and concern over global slowdown weigh on markets Daily up/down on agreement with China spikes interest rates and equities Markets pricing in a likelihood of at least two rate cuts (25 bp each) this year Likely to result in lower rates only on the short end of the curve Less inverted yield curve (only slightly inverted from Overnight/ 1- year)
Where we see rates heading Internal Use Only- Advisor Education Yield Curve Forecast 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1M 2M 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y 30Y 10/16/2019 Year Ago Forecast Source: Bloomberg, L.P. and Townsquare Capital
Quarterly Bond Market Monitor Source: Bloomberg, L.P. and Townsquare Capital
Cornerstone & Foundation Performance Internal Use Only- Advisor Education Performance YTD Cornerstone Foundation 10.11 10.43 Income Focused 11.76 12.35 Conservative G rowth & Income 12.53 12.83 G rowth & Income 13.29 Moderate G rowth & Income 14.01 14.19 G rowth 14.44 Enhanced G rowth 15.70 16.68 Equity Focused * EDUCATION AND INTERNAL USE ONLY. Performance figures as of 9.30.19; returns stated above do not include advisory fees.
BRIX Performance BRIX Performance Q TD YTD 1.46 2.92 Conservative Income 3.94 8.96 Stable Income 2.12 10.11 High Income 2.38 4.99 Tax Exempt Income 3.52 16.19 Conservative Equity 3.15 15.86 G rowth Equity 3.20 15.40 High G rowth Equity 1.25 10.60 International Equity 2.37 15.55 Small/Mid-Cap Equity * EDUCATION AND INTERNAL USE ONLY. Performance figures as of 9.30.19; returns stated above do not include advisory fees.
