FUTURE RETURNS

WE DESERVE… a good paycheque and don’t begrudge anyone else getting one, but hefty golden parachutes tend to make our blood boil — unnecessarily. According to one study, CEO Contractual Protection and Managerial ShortTermism, “CEOs with contractual protection are protected from short-term performance swings and downside risk and, consequently, have weaker incentives to engage in myopic behavior,” such as cutting R&D, which hinders long-term growth at the expense of a shortterm gain. The study, which examined S&P 500 company data from 1995 through 2008, also concludes that short-termism decreased as the duration and amount of severance pay compared to a CEO’s base salary increased.

WE LIKE… a vote of confidence and U.S. investors are certainly showing their faith in capital markets. The Center for Audit Quality’s ninth annual Main Street Investors Survey reports that 73% of all investors surveyed are confident in U.S. capital markets, backed by an increasing amount of confidence in corporate boards and management. The survey found that investors’ confidence that corporate directors are looking out for their best interests increased to 59% this year, from 49% a year ago and 46% in 2012. Likewise, their faith in management increased to 62% from 54% last year and 48% in 2012. The top three entities investors trust are still independent auditors, financial advisors and brokers, and stock exchanges, all topping 70%.

WE KNOW… we’re on the wrong (i.e., older) side of the millennial generation divide, but still share their faith in exchange-traded funds. Millennials are far more likely than other groups of investors to have ETFs in their portfolios and see such funds as the core investment type in their portfolios in the future, according to the 2015 ETF Investor Study by Charles Schwab & Co. Inc. Boomers have just 17% of their portfolios in ETFs, while Millennials have 41%. Gen-Xers have 25% by the way. As for whether ETFs will form the core of their portfolios in the future, 70% of Millennials agreed, compared to just 24% of Boomers and 21% of mature investors.