Advisor Perspectives

 

Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing

November 10, 2009- Vol 3, Issue 45

 

 

 

 

 

 

 

 

 

 

 

 

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Van Eck


If you missed Dan Richards' webinar, It's not Business as Usual: Five New Imperatives for Effective Client Communications, you can view a replay of it here.

Bruce Greenwald is a professor of finance at Columbia University, the Director of Research at First Eagle Funds, and perhaps the foremost expert on value investing.  In part one of our two-part interview, he discusses the structural problems facing the economy, the parallels to the Great Depression, and the implications for the unemployment rate.

Since the onset of the global financial crisis in late 2007, there has been an increasing number of papers and articles in financial journals and the popular financial press pointing out that actively managed investments of all types did not fare well relative to passive investment strategies. In this article, American Century Investments provides four fundamental reasons why those who have forecast the demise of active investment management are mistaken, in part due to one of the most common errors of behavioral finance-the Recency Effect (placing undue emphasis on the recent past to form future expectations).  We thank them for their sponsorship.

At the end of the 3rd quarter, the S&P 500® Index posted its strongest back-to-back quarterly performance since 1975. While the economy continued to stabilize and the
U.S. consumer showed signs of life, concern over the health of the consumer remained. Learn more about the key drivers of global financial markets from the perspective of the Janus investment team through this 3Q Financial Markets Review.  We thank them for their sponsorship.

Nouriel Roubini, the once-obscure economist who gained celebrity and the title "Dr. Doom" after correctly forecasting the financial crisis, believes that current Fed policies are destabilizing the markets and pushing the economy toward another collapse.

More articles below...

Oppenheimer

Case studies
rank as one of the most effective ways to tell your story to prospects. As Dan Richards writes, well-written case studies can be more persuasive and memorable than the typical marketing material which advisors use with prospects. 

In the latest installment of his articles intended for an educated layman, Adam Apt addresses the relationship between risk and return, and shows that the connection between them is neither rigid nor obvious, and that we can be cheated of our money by disregarding risk and fixating only on return.

In a letter to the Editor, a reader responds to our article, The "V" Points Downward

We review the changes in the Advisor Perspectives Universe of assets held by high- and ultra-high net worth investors, and show the changes in asset allocation, performance of the most popular mutual funds, and those mutual funds that gained and lost popularity among advisors. 

Lastly, we highlight submissions to Advisor Market Commentaries.


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In our interview, Greenwald discusses what the
US must do to replace its diminishing manufacturing base, and the government policies that are necessary to eventually solve the current crisis.

 

Bruce Greenwald on Structural Problems in the Economy and Unemployment

 

4 Reasons to Emphasize Active Investment Management

 

Active investment management has recently "taken it on the chin" primarily because of the recent global financial market crisis. However, there are very good reasons to emphasize active investment management as part of your overall portfolio investment strategy.

4 Reasons to Emphasize Active Investment Management

 

3rd Quarter Financial Markets Review


Janus offers their quarterly Financial Markets Review, which provides insight into the key drivers of global financial markets from the perspective of the Janus investment team. Covered topics include quarterly performance of global equity and fixed income markets, significant macroeconomic developments and their impact on financial markets during the period and key factors to watch going forward.

3rd Quarter Financial Markets Review

 

Roubini: Fed Policies are Destabilizing the Financial System

 

As a consequence of Fed policy, Roubini said, investors should prepare for an anemic U-shaped recovery and avoid risky assets "across the board."

Roubini: Fed Policies are Destabilizing the Financial System

 

Using Case Studies to Make Your Case


As you think about how you're going to tell your story to prospects, consider using case studies. Well-written and relevant case studies can be among the most powerful weapons in your marketing arsenal.

Using Case Studies to Make Your Case

 

Not by Return Alone: Judging Investment Performance


If you believe, rightly, that return and risk are related, you may be inclined to stride further down this path on the assumption that return is always proportional to risk, that higher risk implies higher return, and vice versa. Stop. This path will lead you into a swamp of bad investment decisions.

Not by Return Alone: Judging Investment Performance

 

Letters to the Editor - The "V" Points Downward

 

In a letter to the Editor, a reader responds to our article, The "V" Points Downward.

Letters to the Editor - The "V" Points Downward

 

Changes in the Advisor Perspectives Universe


We review the changes in the Advisor Perspectives Universe of assets held by high- and ultra-high net worth investors.

Changes in Asset Allocation
Q3 2009 Performance among the Most Popular Mutual Funds
Changes in the Most Popular Mutual Funds

 

Highlights from Advisor Market Commentaries

 
The recent global recession has made the efficacy of fiscal-stimulus packages one of the most prominent policy debates in economics today. This column finds that the multiplier of defence spending falls in a range of 0.6 to 0.8 and argues that non-defence multipliers are unlikely to be larger. It says we should be sceptical when policymakers claim government-spending multipliers in excess of one and suggests tax cuts may be preferable to spending increases.

"Design and Effectiveness of Fiscal-stimulus Programmes" by Robert Barro and Charles Redlick

The mess this country finds itself in was not caused by bankers, or greed, or a collapse of the capitalist system. It's been caused by not allowing the free market system to work. A 10-12 year wave of misplaced government policies and Fed interventions are the root cause of the problems we face today. These policies and interventions created a massive mis-allocation of capital and resources for more than a decade in an effort to cater to large public corporations and other political factions through fiscal and monetary policy and banking disintermediation.

"Third Quarter 2009 Portfolio Commentary" by Jay Compson of Absolute Investment Advisers

 

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