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Lessons of Successful Entrepreneurs; How Bobbi Brown Built Her Business; Investing in Women

Worth’s Greatest Hits; Your Portfolio in 2042; Tony Robbins Takes Aim at Wealth Management

Five Fantastic New SUVs; Warming to Spring Fashion; 25 Things You Can Do to Live Longer

WO46_Cover_final_mk.indd 1 2/23/17 1:53 PM

TEAMCaleb "Spuds" Powell, CPWA®, Managing Director

Randall Allen, Senior Wealth Advisor

Grace Apuy, CFP®, Senior Wealth Advisor

Darnel Bentz, Senior Wealth Advisor

Curt Biren, CPWA®, AIF®, Senior Wealth Advisor

Thomas Connaghan, Senior Wealth Advisor

Dustin Gale, CFP®, Senior Wealth Advisor

Diane Spirandelli, CFA®, Senior Wealth Advisor

Samuel Waltman, CFA®, Senior Wealth Advisor

PROFESSIONAL SERVICES PROVIDEDComprehensive wealth-management and investment-advisory services

ASSETS UNDER MANAGEMENT$13 billion (as of 12/31/16)

LARGEST CLIENT NET WORTH$500+ million

MINIMUM FEE FOR INITIAL MEETINGNone required

MINIMUM NET WORTH REQUIREMENT$1 million

COMPENSATION METHODAsset-based fees

PRIMARY CUSTODIAN FOR INVESTOR ASSETSFidelity Investments

FINANCIAL SERVICES EXPERIENCECaleb, 21 years; Randall, 16 years; Grace, 10 years; Darnel, 13 years; Curt, 28 years; Thomas, 18 years; Dustin, 10 years; Diane, 43 years; Samuel, 13 years

EMAILspowell@kayne.comrallen@kayne.comgapuy@kayne.comdbentz@kayne.comcbiren@kayne.comtconnaghan@kayne.comdgale@kayne.comdspirandelli@kayne.comswaltman@kayne.com

WEBSITEwww.kayne.com

L E A D I N G W E A L T H A D V I S O R | L O S A N G E L E S — S A N F R A N C I S C O , C A

I L L U S T R A T I O N B Y K E V I N S P R O U L S

Should you ignore the “noise” and stay the course with your long-term investment strategy?B Y K AY N E A N D E R S O N R U D N I C K

Front row: Diane Spirandelli, Dustin Gale, Caleb "Spuds" Powell, Grace Apuy; back row, left to right: Thomas Connaghan, Randall Allen, Darnel Bentz; not pictured: Curt Biren, Samuel Waltman

KAYNE ANDERSON RUDNICK

1800 Avenue of the Stars, 2nd Floor, Los Angeles, CA 90067

580 California Street, Suite 1750, San Francisco, CA 94104

175 South Main, Suite 500, Salt Lake City, UT 84111

11001 West 120th Avenue, Suite 400, Broomfield, CO 80021

800.231.7414

B Y K AY N E A N D E R S O N R U D N I C K

Kayne Anderson_WOR46.indd 140 2/14/17 10:36 AM

n 2016, all the major stock indexes reached all-time highs, including the Dow Jones Industrial Average, the S&P 500, the Nasdaq Composite and the Russell 2000. What’s more, several indexes posted double-digit returns, including the Dow, S&P and the Russell 2000, which returned 21.31 percent last year.1

Despite the stellar year for stocks, most well-diversified portfolios did not keep up with the returns seen by the all-equity indexes, due to exposure to the fixed-income market, which has nose-dived since the election.

Nevertheless, now is not the time to second-guess your long-term invest-ment plan. Instead, it’s actually a good time to remind yourself of why you em-barked on your long-term investment strategy in the first place—to help meet your daily needs and long-term goals.

Here’s why we believe it’s important to tune out the financial “noise” and stay fo-cused on your long-term investment plan.

Not all markets went up. While the eq-uity markets, by and large, posted dou-ble-digit gains last year, not all asset classes went up. In fact, many asset classes have declined in value since the election on November 8. For example, Treasury, municipal, corporate and

emerging-market bonds all have been de-clining, in addition to international and emerging-market stocks.

Many domestic equity industries, includ-ing consumer staples, utilities, REITs, tele-com and technology, declined in late 2016, as well. This may have impacted your invest-ments, as a well-diversified portfolio most likely has an allocation to these asset classes, which has hurt returns.

It’s important to remember that a portfo-lio composed entirely of stocks will generate a higher return during a bull market than a portfolio composed of 60 percent stocks and 40 percent bonds, or a 100 percent bond portfolio. However, a diversified portfo-lio will be less volatile than a portfolio con-taining all stocks. So, while you may not be

gaining in lockstep with the overall equity market, you are, regardless, shielding your portfolio from significant losses in the event of a major downturn or market correction.

The market is nearly impossible to time. There’s quite a bit of evidence showing the negative impact of trying to time the market to investor portfolios. One report, from research firm DALBAR, found that the average equity investor underperformed the broader stock market over a 30-year period, with an average annual return of about 3.66 percent per year, versus the S&P 500’s 10.3 percent return.2

This underperformance has been the result of bad market timing, as investors have sought to buy low and sell high, but have often done the opposite. That’s be-

cause investors often buy or sell when every-one else is doing the same. As a result investors end up buying stocks at a higher price than they would have, had they bought based on the company’s fundamentals or other factors, as opposed to when the mar-ket was going up or down.

There’s a reason you created a long-term investment strategy. An effective asset-allo-cation strategy can help you grow your in-vestments without exposing you to unnecessary risk. While it may be tempting to rebalance in the wake of the recent mar-ket performance, remember that market ral-lies and downturns can happen very quickly. Switching your asset allocation during the back half of a bull market might cause you

to pursue stocks that are overvalued, and therefore poised to go down in the event of a market correction.

Key takeaway. There are winners and losers in every market, as some assets gain during periods when others decline. It’s important to tune out the noise and sharpen your long-term perspective, which we believe is the best way to navigate volatile markets. l

1 FactSet2 Quantitative Analysis of Investor Behavior study, DALBAR, April 2016.

Information expressed herein is strictly the opinion of Kayne Anderson Rudnick and is provided for discussion purposes only. This report should not be considered a recommendation or solicitation to purchase securities. Past performance is no guarantee of future results.

K A Y N E A N D E R S O N R U D N I C K

RANKED #3 IN 2016 AND AMONG THE TOP 10 OF

BARRON’S LIST OF TOP INDEPENDENT FINANCIAL

ADVISORS FOR THE LAST FOUR YEARS, KAYNE

ANDERSON RUDNICK IS A BOUTIQUE INVESTMENT ADVISORY

FIRM THAT WAS FOUNDED IN 1984 TO MANAGE CAPITAL FOR

ITS FOUNDERS, INCLUDING JOHN ANDERSON (A FORBES 400

BILLIONAIRE AND THE BENEFACTOR OF UCLA’S ANDERSON

SCHOOL OF MANAGEMENT).

With offices in Los Angeles and San Francisco, the company

manages assets for both high net worth individuals and

institutions. Its advisors boast an average client relationship

duration of 10 years and a retention rate of 94 percent, thanks

to outstanding client service and comprehensive wealth-

management strategies, designed around clients’ unique

circumstances and objectives. l

A B O U T U S

IAn effective asset-allocation strategy can help you grow your investments without exposing you to unnecessary risk.

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Kayne Anderson_WOR46.indd 141 2/14/17 10:36 AM

Kayne Anderson Rudnick is featured in Worth® 2017 Leading Wealth Advisors™, a special section in every edition of Worth® magazine. All persons and firms appearing in this section have completed questionnaires, have been vetted by an advisory group following submission by Worth®, and thereafter paid the standard fees to Worth® to be featured in this section. The information contained herein is for informational purposes, and although the list of advisors presented in this section is drawn from sources believed to be reliable and independently reviewed, the accuracy or completeness of this information is not guaranteed. No person or firm listed in this section should be construed as an endorsement by Worth®, and Worth® will not be responsible for the performance, acts or omissions of any such advisor. It should not be assumed that the past performance of any advisors featured in this special section will equal or be an indicator of future performance. Worth®, a publication of the Worth Group LLC, is a financial publisher and does not recommend or endorse investment, legal or tax advisors, investment strategies or particular investments. Those seeking specific investment advice should consider a qualified and licensed investment professional. Worth® is a registered trademark of the Worth Group LLC.

Kayne Anderson Rudnick1800 Avenue of the Stars, 2nd Floor

Los Angeles, CA 90067

580 California Street, Suite 1750San Francisco, CA 94104

175 South Main Street, Suite 500Salt Lake City, UT 84111

11001 West 120th Avenue, Suite 400Broomfield, CO 80021

Tel. 800.231.7414

spowell@kayne.comrallen@kayne.comgapuy@kayne.comdbentz@kayne.com cbiren@kayne.com

tconnaghan@kayne.com dgale@kayne.com

dspirandelli@kayne.comswaltman@kayne.com

www.kayne.com

R E P R I N T E D F R O M

®

T H E E V O L U T I O N O F F I N A N C I A L I N T E L L I G E N C E

Randall Allen Senior Wealth Advisor

Grace Apuy, CFP® Senior Wealth Advisor

Darnel Bentz Senior Wealth Advisor

Curt Biren, CPWA®, AIF® Senior Wealth Advisor

Thomas Connaghan Senior Wealth Advisor

Dustin Gale, CFP® Senior Wealth Advisor

Diane Spirandelli, CFA® Senior Wealth Advisor

Samuel Waltman, CFA® Senior Wealth Advisor

Caleb "Spuds" Powell, CPWA® Managing Director