Dissecting the Impact on Valuation Drivers What impact, if any, will the imposition of tariffs have on the valuation of assets? How will the imposition of tariffs impact modeling? In this article, the author shares his thoughts on the various factors and industries that valuation professionals must weigh to prepare a valuation. Economic Uncertainty in Valuation Economic uncertainty arises when key macroeconomic indicators—such as GDP growth, interest rates, and fiscal policies—become unpredictable. This unpredictability reduces the accuracy of forecasts and limits visibility into future performance. For valuation professionals, it complicates the modeling of cash flows and expands the range of…
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Before investing client assets, advisors are required to assess a client’s risk tolerance. If the investor takes on more risk than they can endure, they are likely to lose more money than they can stomach when the inevitable bear market comes. And even if the market recovers, there’s a risk that the investor will panic sell at the bottom of the market. To read the full article in Financial Planning, click: Risk Tolerance: The Misperception that Keeps Hurting Clients.
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There are many reasons why clients need solid financial advice in these turbulent times. This article lays out four of them, starting with the observation that nobody—or almost nobody—can time the markets. Bob Clark, Editor-at-Large for Investment Advisor Magazine, explains the importance of speaking to the client’s understanding and the importance of a financial advisor’s role. To find out more on ThinkAdvisor’s article, click: 4 Reasons Clients Need You Now.
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The Risk-Free Rate is the Cornerstone in Finance for Estimating both the Cost of Equity and Debt Capital. In corporate finance and valuation, both academics and practitioners have long used government security (U.S. Treasury Bills and Bond) rates as proxies for risk-free rate of return. How do credit downgrades affect the risk-free rate for private company valuators? Anthony Banks explains.