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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
February 9, 2010- Vol
4, Issue 6
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We are pleased to announce the availability of Research Perspectives,
a newsletter that highlights the latest
market and economic commentaries from fund companies, independent research
firms and advisors. This is a free newsletter, and it is available in a daily version
(at 4pm ET) and as a weekly digest (at 4pm ET on Friday).
To subscribe to the daily and/or weekly versions, please go to our web site and use the
"subscribe" option.
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Whether your web site is an
online brochure to attract prospects or tool to enhance client
communication, small changes can generate big returns. Even if your site
already has the right look and feel, here are six ways it can still be improved.
Long dismissed as a supplemental
income stream only for retirees with fewer assets, Social Security benefits can be important for
clients of all asset levels, including high net worth (HNW)
investors. As you are well aware, HNW clients are often particularly
sensitive to government taxation and are usually interested in strategies which can help them retain or reclaim
their money. We thank BlackRock for this article and
their sponsorship.
Marie Swift evaluates the various
systems and processes that are kicked-off at a typical firm from one of the
most common client interactions - an inbound call. Many firms work
with disparate software systems and utilize far too many manual tasks -
resulting in duplicate data entry and poor customer service.
Conversely, Marie evaluates this same scenario utilizing an integrated
software and services solution, Tamarac Advisor 9, and finds dramatic gains in efficiency, accuracy and
overall firm profitability. We thank Tamarac for their sponsorship.
The Chinese
economy must be getting out of control, because the Chinese
government is doing the unthinkable: It is desperately trying to put the
brakes on its economy. Author and fund manager Vitaliy Katsenelson looks back at how China
got into this trouble and looks forward to China's prospects.
More articles below...
Few issues divide investors today more than the investment merits of China, despite that country's tremendous potential. China's
strong economic performance through the global financial crisis has
reinforced this divide. Dan Richards
looks at the cases for and against investment in China, and offers his own
opinion.
The question Terrance Odean
asks is if someone sells a stock and then buys another stock, on average
does the stock they bought outperform the one they sold by enough to cover
their trading costs? Odean, a professor at Berkeley, has researched
this question and the role of excessive
trading and overconfidence in investor decisions.
In this guest contribution, Emilio Vargas says you don't need a Ph.D. in economics or a sophisticated computer model
to figure out bubbles. Just look at their recent history.
Our letters to Editor include
two responses to our article about Joseph
Stiglitz and one in response to Keith Goddard's article about asset allocation using Shiller P/E ratios.
Lastly, we highlight submissions to Advisor
Market Commentaries.
We welcome guest submissions from our
readers. For more information, here are our guidelines.
If you are experiencing problems
opening or navigating through our newsletters, we can send you a text-only
version. Please send an email to feedback@advisorperspectives.com requesting the "text-only" version.
If you have received this newsletter
in error, or you do not wish to receive future newsletters, please reply to this email with the word
"unsubscribe" in the subject line.
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The trick to achieving a successful web site is using images and words together
in a way that evokes an automatic emotional response. You want
visitors to come away feeling a positive connection with your organization
and team.
Six Ways to Make the Most of your
Web Site
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Building High Net Worth Client Loyalty with Social Security
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HNW
investors often use their Social Security income to fund investment
portfolios, so helping them maximize their lifetime benefits will also help
you increase both your client loyalty and the amount of business you do.
Building High Net Worth Client
Loyalty with Social Security
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Transforming Your Business with an Integrated Solution
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What happens at your firm when a client calls? Marie Swift looks at
the typical activities that are kicked-off from a common client interaction
and compares that to an office that's using an integrated software and
services solution. Her findings call out dramatic gains in
efficiencies for those firms that are ready for change.
Transforming Your Business with an
Integrated Solution
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China's Quest for a Shortcut to Greatness
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China has been trying to bend the laws of economics, and
with the control it exerts over its economy it may seem, at least for a
short while, that the laws of economics work differently in China. This is only a temporary mirage, which must be followed by
huge pain and drastic consequences.
China's Quest for a Shortcut to
Greatness
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The prospects for growth in China are inarguable - what's less clear is how
much of that growth is already built into the price of Chinese stocks and
whether outside investors will benefit from that growth in the same way as
that country's citizenry.
The China Conundrum
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Overconfidence and Excessive Trading Harm Investor Returns
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Terrance
Odean found that the buy-and-hold investors were, on average, outperforming
the active investors by about 6% per year. Thus, he titled his paper,
"Trading is Hazardous to your Wealth."
Overconfidence and Excessive Trading
Harm Investor Returns
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Central bankers want to claim the failure to recognize bubbles and deal
with ensuing crises is a problem with regulation. What they are really
saying is that we create the liquidity, but we cannot control where it ends
up.
It's Not My Fault
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Letters to the Editor - Stiglitz and Shiller PEs
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Our letters to Editor include two responses to our article about Joseph
Stiglitz and one in response to Keith Goddard's article about asset
allocation using Shiller P/E ratios.
Letters to the Editor - Stiglitz and
Shiller PEs
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Highlights from Advisor Market Commentaries
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We recap a recent webinar by investment firm Tweedy Browne. The company's
four managing partners explained their focus on downside risk, expressed a
preference for high-quality dividend-payer stocks and explained their
emphasis on developed markets rather than emerging markets. The partners
said they were optimistic about recovery in the long term, but cautious
about the short term.
"Tweedy Browne: Cautious in the
Short Term, Optimistic in the Long Term" by Tweedy Browne
Hussman discusses the distortions in reported corporate earnings, arguing
that the true measure of value is that used by Berkshire Hathaway: the
growth in book value plus dividends. He concludes that, "As is true
for a variety of similar measures of normalized value, the valuation levels
we observe today are comparable with the highest levels achieved in
history, except for the bubble period since the mid-1990's." He also
discusses an op-ed piece by Volcker in yesterday's NYT.
Reported Earnings versus
"Owners Earnings" by Hussman of Hussman Funds
Rosenberg's bearish thesis is based on his belief that the
"great policy reflation experiment is over." He notes that China, India, Canada and most of Europe are tightening budgets. The 2009 stimulus
"cushioned the blow;" 2010 and beyond look much different. He
recommends a conservative asset allocation.
Breakfast with Dave by Rosenberg of
Gluskin Sheff
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Advisor
Perspectives
Box 380
Lexington, MA
02420
(781) 376-0050
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