December 29, 2009
High- and ultra-high net worth investors are increasingly unhappy with their advisory relationships. Dan Richards discusses articles about this trend in Business Week, the New York Times and Wall Street Journal. The fallout will include an increase in the number of clients exploring their options - some investors who have been on the fence about switching will conclude that if others are looking at moving, perhaps they should as well.
He offers a five-point strategy, drawing on ideas from workshops he has conducted and bringing together some of the things he has been writing about over the past year.
Youngstown, Ohio has the distinction of being America’s fastest-dying city, losing its population more rapidly than any other large metropolitan area. It is also home to Young Financial Group, whose founder, Mowry (“Mo”) Young has developed a unique client-centric marketing strategy that enabled him to acquire several hundred new clients over the last four years.
A dramatic reduction in consumer spending has doomed the US economy to slow growth and deflation, according to Gary Shilling. America’s 25-year spree of profligate spending is over, and it will be supplanted by a decade-long retrenchment that will ultimately bring the consumer savings rate from 4% to double-digits, where it has not been since the mid-1980s, he said
Hildy Richelson and Stan Richelson are bond advisors who focus their Philadelphia-based practice on the design and management of bond portfolios for high-net-worth individuals. The Richelsons argue that equities are too risky unless you have an infinite horizon – such as endowments. Individuals should buy bonds instead. They should avoid bond funds and buy individual bonds.
As the government prints more money to finance rapidly expanding budget deficits, every investor must prepare for a possible return of 1970s-style inflation.
In theory, equities should perform well during inflation. They represent real assets, and as the prices of these assets rise, so should equity prices.
In this case, though, history and theory are at odds.
We find ourselves glued to the computer screens or CNBC waiting to find out what the Dow’s next tick is going to be. Unfortunately, we are left with only a headache and wasted time. What’s next? Vitaliy Katsenelson’s advice: read. Read books that will bring you sanity, the ones that will snap you back into the discipline of an investor and out of the sorry shell of a nervous observer of the daily stock market melodrama. He offers some excellent choices and that come with plenty of sanity and sage advice.
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