Posts in Articles
Innovest's NonProfit Client Spotlight - Delta Dental of Colorado Foundation

Did you know that nearly half of Colorado’s children have experienced cavities by the time they start kindergarten? This startling statistic drives Delta Dental of Colorado Foundation’s work in the community. The foundation works to eradicate childhood tooth decay through a variety of initiatives and grants. Their work includes integration of dental care into medical organizations as well as educating both medical and dental students.

The foundation has also developed creative methods to achieve their goals. They pioneered mini-grants in 2015 to award eleven organizations grants ranging from $1,000 - $15,000 per grant to spur oral health innovation throughout Colorado. Partnering with the company in 2016, they awarded five nearly $50,000 innovation grants. Three supported the development of technology from bacteria-fighting retainers to regenerative materials for teeth.

Their work also includes educational programs for children and pregnant women. This includes the bilingual “Cavities Get Around” campaign to emphasize the importance of baby teeth and to raise awareness of the impact sugary drinks – particularly juice – have on children’s oral health. The campaign provides resources to primarily low-income, vulnerable families in Colorado.

Innovest is proud to provide consulting services to Delta Dental of Colorado Foundation!

 

 

HR Will Have More Opportunities to Demonstrate Value in 2012

During 2010 and 2011, many human resources departments were  focused on restructuring, downsizing, rebalancing the workforce, consolidation of HR into smaller, more centralized groups, budget-cutting, and trying to prepare for the economic recovery. This year, HR organizations are increasing their budgets and looking to a year of building, and less of retrenchment. Click here for an article from Bloomberg BNA which discusses this trend.

ArticlesGordon Tewell
Caveat Emptor: The New Bond Market

Please click here to read the full article.

Scott Middleton, CFA, CIMA, Director – Investment Committee

While the warning of “buyer beware” has often been applied to sale of real property, investors would be wise to contemplate the phrase in relation to today’s bond market.  Since the depths of the credit crisis in late 2008, investors have been drawn to bonds’ relative stability and income. After all, why would investors want to own money market funds that pay microscopic, if any, income, much less own equities (regardless of their attractive valuations) that entail punishing volatility? 

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Successful Investors Go Beyond Comparing Manager Composites

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Rich Todd, Managing Principal & Co-Founder

Manager and product due diligence must go beyond examining a manager’s track record. This approach is not news to most good firms in the investment consulting industry. Qualitative issues must always be considered, including manager tenure, philosophy and process, and firm health, to name a few. However, an often overlooked, yet critical, element of due diligence is evaluating the quality of a manager’s advertised track record or “composite.” A composite is the aggregation of all accounts that are managed in a particular strategy by a money manager.  Because attractive track records can lead to inflows of more assets, and consequently income to investment firms, at Innovest we believe that it is not uncommon for investment firms to embellish their performance.

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Dependent Eligibility Verification Audits

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Guest Columnists:

John Schultz, J.D., LL.M., Managing Director

Brook L. Erker, CPA, Director

Denver Compensation & Benefits, LLC

In an environment of skyrocketing health care costs combined with a struggling economy, employers are increasingly looking at new methods to reduce costs and at the same time stay competitive.  Health care costs are the third largest expense for employers, and therefore a significant cost containment area available to employers.  One tool to reduce health care costs that has gained quite a bit of attention recently is the dependent eligibility verification audit.  This relatively new type of audit is becoming a standard in large and small companies alike because of the impact it can have on costs. Statistics vary by source but in general show that approximately 3% to 12% of dependents in a health plan are not eligible for coverage.  By removing these ineligible dependents, employers are experiencing cost reductions related to medical costs.

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The Future is Never Like the Past

An article by Innovest's Richard Todd, Managing Principal, from the Innovest 2nd Quarter 2010 Newsletter, "The Research Report."

How would you have built a portfolio in 2009? For the majority of the first quarter of 2009, you would have stayed very defensive with lots of cash. However, beginning in mid-March 2009, you would have become aggressive by focusing on equities, especially non-U.S. equities with a healthy concentration in emerging markets. Forget Treasuries and munis, and invest in junk bonds and bank loans. Voila! You just made over 50% in 2009! Hindsight is easy, isn’t it?

To continue reading Rich's article, please click here.

Should You Consider a Roth IRA Conversion?

To continue reading Scott's article, please click here.

Municipal Bonds: Should You Build a Portfolio or Invest in a Fund?

Denver Business Journal - by Richard Todd

A prominent economist recommended that high-net-worth investors should never buy municipal bond mutual funds and instead should ladder their own bond portfolios.  (“Laddering” means having a portfolio of investments with holdings that range from short maturities to long ones.)

He argued that owning individual bonds until maturity offers the certainty of regular income payments, without management fees or expense ratios.

Investors should have learned this lesson in the past year: Portfolios’ downside risk should be quantified and carefully considered.  For high-net-worth investors, municipal bonds can be an ideal strategy to reduce portfolio volatility.  However, the approach to implementing and managing a municipal portfolio is an important consideration.

Is the economist correct?

Click here to continue reading.

Madoff Fraud Shifts Focus to Concerns About Hedge Funds

The followings article by Richard M. Todd was recently published in the Denver Business Journal, Volume 60, Number 42, March 27 - April 2, 2009, (Denver Business Journal).

In 2008, hedge funds didn’t protect investors as many had expected. The CS/Tremont Hedge Fund Index, which included Bernie Madoff’s fraud, was down 19.07 percent for the year.

While some of the disappointment was attributed to the financial crisis, investors’ confidence also has been shaken by the depth and significance of Madoff’s fraud. Although Madoff managed separate accounts, his strategies were distributed primarily by feeder funds structured as hedge-fund partnerships.

Many people have written off the hedge-fund business. However, we think otherwise, and believe that solid, risk-adjusted returns should be in store for diversified hedge fund investors...

Click HERE to continue reading.

Fiduciary Liability

The following article by Brad Brewer was recently published in Transitions, March 2009, (Transitions).

Fiduciary liability is not a new topic, but the risks have increased as a result of a 2008 court ruling and the financial meltdown of the economy during 2008.

According to the fifth Annual Workplace Class Action Litigation Report by law firm Seyfarth Shaw LLP, for ERISA class actions, the monetary value of the top ten private plaintiff settlements entered into or paid in 2008 totaled $17.7 billion, compared with $1.8 billion in 2007. This article provides some background on the United States Supreme Court case making it easier for participants to file a lawsuit and measures a plan sponsor can take to mitigate their liability.

The United States Supreme Court decided the case of LaRue v DeWolff, Boberg & Associates, Inc. in the spring of 2008. The decision was unanimous, declaring that defined contribution participants can bring fiduciary breach lawsuits to recover individual damages...

Click HERE to continue reading.

Congress Expected to Repair Problems with Pension Plans

This article by Richard M. Todd was recently published in the Denver Business Journal, Volume 60, Number 33, January 23-29, 2009, (Denver Business Journal).

Many retirement industry experts expect the 111th Congress to undertake an extensive review of our retirement system.

Time has shown that defined benefit pension plans suffer from a fatal flaw: They spread risk without being clear about how, and by whom, the risks are borne. Surpluses in defined benefit plans lead to employers becoming exempt from the requirement to make their annual contributions, as well as result in plan participants and corporations fighting over the ownership of the surplus. Regulators, and even the courts, often step in to arbitrate the disputes.

Similarly, when surpluses turn to deficits during market collapses, plan participants become at odds with bondholders and shareholders about how the financial shortfall should be allocated.

Please click here to read the full article.

Is Staying the Course the Right Plan?

One of the world's largest investment managers is Capital Research and Management, which oversees the American Funds.  Jim Rothenberg, Chairman and Principal Executive Officer of the firm, recently warned of the emotions of the moment distracting investors from their purpose.  His comments include a look back at one of the darkest moments in U.S. history: 

"In April 1942, we were at war and we were losing.  Germany had overrun France.  Our Pacific fleet had been crippled at Pearl Harbor.  Inflation was rampant.  Companies faced wage and price controls and excess profit taxes.  In that bleak month, with no clear or compelling reason, the market simply reached the bottom of a long downturn and started to rise again.  By the end of June 1943, the Dow Jones Industrial Average had gained 54%."

For the full text of Rothenbergs comments, please click here.

ArticlesScott Middleton
Investment Portfolios Fifty Years from Now

In a fascinating and brief commentary, author William J. Bernstein ponders how investment portfolios will look 50 years from now.  Bernstein is an exponent of Modern Portfolio Theory and its emphasis on asset allocation.  Some of his conjectures include:

    There will always be bubbles and panics
    Risk and return will continue to be joined at the hip
    Equity investments should continue to offer higher returns than debt
    Diversification will become even more important than it is now

Please click here for the full text of his commentary.

Interesting Perspective on the Financial System

The issues surrounding mortgage foreclosures and the credit markets have generated a renewed interest in additional oversight of the financial industry.  Whether or not you agree that additional oversight is warranted, the attached article might be of interest.  Written by Peter Goodman and appearing in last weekend's New York Times, it reflects on how Milton Friedman would have potentially reviewed the situation.  The article is available by clicking on this link.

If you have any questions or comments, feel free to e-mail me at bradb@innovestinc.com.

Tatum Survey: Business Conditions are Somewhat Less Negative

Each month the executive services firm Tatum surveys its nationwide professionals regarding economic and business conditions.  Located in 37 offices across the U.S., Tatum is the nation's largest executive services firm serving more than 4,000 companies in a variety of industries.

As of April 1, their national survey indicated that while the economic slowdown is broadening, "the depth of the slowdown may be relatively shallow outside of real estate, construction, and industries directly affected by the sub-prime mortgage mess."  Nonetheless, the sixty-day outlook for business conditions remains very cautious.  The full text of the survey is available by clicking on this Tatum link.