NorthStar Blog


Bitcoin: What Is It Good For?

Content provided by Mark Matthews, Investment Research Analyst A Commodity? An Equity? Bitcoin continues to reach new highs, closing at $7,058 per share on November 2, 2017. But for many investors, bitcoin remains somewhat of a mystery. So, what is this highly popular digital currency, and why is it continuing on such a tear? Bitcoin...

ETF Expense Ratios: More Than Meets the Eye

Content provided by Grant Engelbart, CFA, CAIA, Portfolio Manager We’ve all got our pet peeves and soap boxes. For most people they have to do with human behavior. But for me, my biggest pet peeve is the constant attention to ETF expense ratios! The fee war has gotten out of control. I’m actually surprised there...

Latest integration from Orion Advisor Services Allows Advisors to Trade from Anywhere its Insight App is Installed

Trading for advisors is now faster and easier than ever. Execute trades from wherever the Orion Insight app is installed, including your CRM.

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Get the Details on our Latest Software Release

Get the details on our latest software release, catch up on Tuesday's webinar, and check out a guest blog, it's all coming up in today's Orion Weekly.

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The Advisor View: How Orion is Helping a New RIA with a Successful Launch

Orion Rep Portal

Adam shares his perspective on why his firm chose Orion and what sets it apart from the other portfolio accounting solutions available today.

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Orion Software Update November 2017 – Full Release Notes

The Orion Software Update November 2017 – Full Release Notes are here, just in time for our software update on November 11.

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The November Software Release Drops in Two Days

Take deeper a look at our newest trading and reporting enhancements, preview our tech release webinar, and learn about two upcoming conferences.

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November Software Update: Reporting and Trading Updates

November trading updates

Coming soon, we’ve got new November trading updates and also Reporting enhancements to create an ever better Orion experience.

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Five Reasons to Keep Expectations Low for Market Returns

Content provided by Kostya Etus, CFA, Portfolio Manager

“The light that burns twice as bright burns half as long, and you have burned so very, very brightly, Roy.” – Eldon Tyrell, Blade Runner (1982)

As regular readers of the CLS blog may know, I love watching movies. But, I am often disappointed with great movies because I hype them up in my mind to unreachable expectations. A recent example is “The Big Sick”. It was a great movie, but the stellar reviews and high praise from trusted colleagues elevated my expectations, and I ended up disappointed.

The markets are no different. Investors often have high expectations for market returns, which often lead to disappointment when the market doesn’t deliver. These expectations are elevated by the same forces driving those of movies — colleagues discussing their successes, sensational media headlines, and analyst and economist forecasts (similar to critics’ movie reviews). In addition, as bull markets heat up, expectations rise. Then, any type of negative market action may cause an unwarranted investor reaction — for example, selling investments in a panic as they hit bottom.

At CLS, we believe a bear market is unlikely because there are no signs of an economic recession. Global economic growth is stable and strengthening in many countries, and corporate earnings have rebounded in 2017 after several years of weakness. But, we do foresee below-average returns in the near future for the following reasons.

  1. U.S. stock market valuations are at record highs, which suggest a higher probability of reversion to the mean and weaker performance ahead.
  2. Since 1929, the U.S. market has never experienced a full year with such a small maximum drawdown as we have had in 2017 (see chart below).
  3. This is the first year since 1970 that the U.S. market has not had a single monthly negative total return.
  4. The U.S. market hit its sixth consecutive high in September. That’s the longest streak in 20 years. Meanwhile, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), which measures expected stock swings, fell to an all-time low, passing the last record set in 1993.
  5. The Dow has set 69 new records for closing highs since the 2016 presidential election. And, it has reached four 1,000-point milestones in one year for the first time ever.

All of these statistics suggest this is not the time to get comfortable. Markets are cyclical in nature and a reversal of direction may come sooner than later. This is why it is important to stress a balanced and globally diversified approach to investing that focuses on targeting risk based on both ability and willingness to take it on. Such an approach will help moderate expectations and help investors stay invested for the long run.

I took my own advice for the recent premiere of the much-anticipated “Blade Runner 2049”. I was excited about it, but I stayed away from trailers and reviews and kept my expectations reasonable. I thoroughly enjoyed it.



The Rise (and Fall?) of Bitcoin

Content provided by Marc Pfeffer, Senior Portfolio Manager

During the technology craze and eventual bust in the late 1990s, investors — myself included — didn’t know what they were buying; they just knew the stock symbols. It was irrelevant whether the companies made money or not, or what the price-to-earnings ratios were. It was a matter of buying a stock, holding on to it for even just a few minutes, and then selling, hopefully at a profit. Companies opened up as much as 10 times their IPO price.

Bitcoin is starting to remind me of that boom-and-bust time. When I talk to people on the street, whether it’s an Uber driver or my shoe-shine guy, I hear bitcoin being discussed with enthusiasm. And, as a father of a daughter who recently got engaged, it’s hard not to jump on the bandwagon and try to trade some bitcoin to fund the wedding I know is coming. But, I am older now and hopefully a little wiser — at least enough to know I shouldn’t trade something I know little about.

So, let’s start with the basics. Bitcoin is a cryptocurrency, which is a type of digital token that relies on cryptography to chain together transactions and control the creation of additional units of the currency. Bitcoin became the first decentralized cryptocurrency in 2009.

Well, where I come from currencies don’t swing 20% or so in a day. Imagine if the U.S. dollar swung like that!

Just last month, the Chinese government and financial regulators officially requested Chinese bitcoin exchanges and trading platforms to shut down. While the initial news brought the purchase price of one bitcoin down from approximately $5,000 to $3,000, it has since rebounded to all-time highs. Many speculators remain optimistic since the Chinese bitcoin exchange only accounted for approximately 10%-13% of global bitcoin trades.

Also last month, Mohamed El-Erian, a recognized global thinker and Chief Economic Adviser at Allianz, suggested the value of bitcoin should be cut in half, citing the crackdown in China and his belief that current prices assume mass adoption. Meanwhile, JPMorgan Chase CEO, Jamie Dimon, called the digital currency a fraud.

So, what does all this mean? It’s still pretty unclear. As for me, I will keep watching the rise — and possible fall — of bitcoin, while sticking to investments I know and understand that will help me grow wealth over the long term. And, maybe fund a wedding in the short term.