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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
December 9, 2008- Vol 2, Issue 50
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Today, we offer insights from three of the brightest minds in the
investment industry: Niall Ferguson,
Mohammed El-Erian, and John
Paulson.
Niall Ferguson is the author
of the best-selling book, The Ascent of
Money, and has been recognized by Time magazine as one of the world's 100 most influential people. In our
interview, Ferguson examines the de-leveraging process and how advisors
should react to the changing landscape of asset
class returns.
The Financial Frontiers Awards are
presented annually for outstanding research papers in financial
planning. We provide access to the 2008
award-winning papers, along with information about how to submit papers for next year's awards. These
awards are co-sponsored by Janus and the Financial Planning Association,
and we thank Janus for their continued sponsorship of our service.
PIMCO CEO and co-CIO Mohammed El-Erian
provides a comprehensive analysis of the current credit crisis, along with
guidance for investment strategy. Traditional
rebalancing is not the way to go,
he says, and investors should go up the
capital structure instead of increasing equity positions.
John Paulson, whose
top-performing hedge fund earned him a multi-billion paycheck in 2007,
discusses where he sees opportunities in
the year ahead. His views contrast with El-Erian's;
Paulson says the de-leveraging process is
a little more than half complete.
GM will be forced into bankruptcy.
An additional $15 billion in aid from Congress could mean it happens at the
end of March rather than in the next few weeks, but even with a government
bailout, the auto giant's bankruptcy is a
question of when, not if.
Lastly, we highlight some recent Advisor Market Commentaries.
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Our Interview with Niall Ferguson
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Massive
de-leveraging, a full year or more of recession followed by years of slow
growth, high unemployment, and war-time like federal deficits certainly doesn't
bode well for most investments over the near term. And that's Niall
Ferguson's best-case scenario.
Read the article
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The
Financial Frontiers Awards: Investing in the Future of Our Profession
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Each year, the
Financial Frontiers Awards, co-sponsored by Janus and the Financial Planning
Association, encourages practitioners and academics alike to share their
latest research and showcase new ideas in financial services. The most
outstanding research papers on financial topics are chosen (and rewarded)
based on how well they educate advisors on aspects of their practice and
the extent to which they provide practical solutions for their clients.
2008's winning papers: The Hedonic
Pleasure IndexTM - An Enhanced Model for Spending Inflation and
Who Is Planning for the Planner?
Becoming Consumers of Our Profession.
Read the article
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Mohammed El-Erian: "Resist the Temptation to
Automatically Rebalance"
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El-Erian says traditional rebalancing does not work in today's
markets. Putting more money into equities is not the right choice,
and investors should be looking at fixed income and special situations.
Read the article
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John Paulson on De-leveraging and Opportunities in
Financial Services
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John Paulson says the best opportunities are now in the fixed income
markets, and discusses which classes of distressed assets he believes are
most attractive. However, he does not see a long term shift in asset
class returns - equities will outperform fixed income over the long term.
Read the article
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GM
on the Highway to Bankruptcy
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The auto industry
may soon receive a government bailout, but GM is still headed for
bankruptcy. Congressional hearings last week revealed a lack of
understanding of the key issues among lawmakers which, combined with the
positions of unions and management, make bankruptcy the inevitable endgame.
Read the Article
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Highlights
from Advisor Market Commentaries
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We highlight recent submissions to Advisor Market
Commentaries:
Over the last month, we've offered three articles (Tantalizing Opportunities in
High-Grade Bonds, The Disappearance of the Equity Risk
Premium and Dan Fuss: The 50-Year Opportunity in
Bonds) about opportunities in the investment grade bond market.
This week, PIMCO's analysts expressed similar thoughts:
Read the Commentary
Ray Ferrara of the ProVise Management Group offers a positive spin on much
of the downbeat news in today's headlines:
Read the Commentary
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Advisor
Perspectives
Box 380
Lexington, MA 02420
(781) 376-0050
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