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A Proven Strategy to Attract Multi-million Dollar Clients
by Dan Richards,
When it comes to attracting new clients, new and different approaches are critical. While some advisors are experimenting with social media to grow their business, a recent conversation reminded me that advisors can still learn from longstanding, proven approaches that have been employed by advisors with elite clients.
The Accidental Empire
by George Soros of Project Syndicate,
Germany is likely to do what is necessary to preserve the euro but nothing more resulting in a German-dominated eurozone in which the divergence between creditor and debtor countries continues to widen. The EU would then become a German empire with a permanently depressed peripheral hinterland in need of constant transfer payments.
Waiting for Clarity and Action in the Euro Zone
Poor economic data and the collapse of a Spanish bank have kept the pressure on Europe and the financial markets, but we believe Greece will stay in the euro and the European Union. U.S. investors should know that Germany is pro-Europe and recognizes the need for growth, not just fiscal austerity. It is also important to point out that ECB policy has been supportive, but they do not want to do the job of the government. U.S. investors should look to high-quality dividend-paying stocks in this uncertain environment...
Gaming the Odds of a Greek Euro Exit With and Without Contagion
A key question on trader's minds is who will win the June 17th Greece election and whether it results in a Greek exit of the eurozone. Deutsche Bank gives it assessment in a report called Probability weighting EUR views on Greece. Under a variety of assumptions, the market pricing looks consistent with: a) significant odds in favor of Greece remaining part of the EUR zone and EUR/USD trading between 1.25 and 1.30; and, b) a worst case Greek exit global contagion scenario taking EUR/USD to 1.10, but not to levels as low as parity.
What Does a Dividend Tax Hike Mean for Dividend-paying Stocks?
by Steve Chun,
The Bush tax cuts are due to expire at the end of this year, but owners of dividend-paying
stocks need not be afraid. Historically, changes in tax regimes have had little
effect on the value of the aggregate stock market. Historical data show that even
vulnerable asset sub-classes - high-yield stocks, for example - have not lost value
long-term as a result of similar tax increases.
What History Tells Us about a Potential Greek Exit
by David Schawel,
Greece's future is less certain given the recent elections. Is an exit now possible or probable? What would an exit from the euro look like, and how would it be accomplished? Some historical examples give us a clue to the repercussions.
Facebook IPO Not a Flop; Underwriters Priced it Right
by John Buckingham of AFAM,
he social media giant ended its first day of trading up a measly 23 cents, or 0.6% from its $38 offering price, and technical difficulties at Nasdaq delayed the opening of trading and impacted market activity throughout the day, I give kudos to the underwriters for actually pricing the deal as best they could to match the relatively limited supply to the unprecedented demand. Certainly, Facebook could eventually grow into its lofty valuation, but it is eye-opening to think the disappointing first day of trading still left the company with a $100 billion+ market capitalization.
Keep Your Portfolio Rolling Along With Canadian National Railway
by Team of F.A.S.T. Graphs,
We believe at its current quotation CNI offers dividend growth investors an above-average total return at below levels of risk. Although the company only offers a market average dividend rate, we would expect its dividend to grow commensurate with its above-average expected earnings growth. We consider this a high quality dividend growth stock that is ideally suited for the long-term buy and hold conservative investor. As always, we recommend you conduct your own thorough due diligence.
An Attack on Paul Krugman
by Michael Edesess,
A foundational principle of modern economics is that the creation of credit leads to economic growth. That precept underlies need for quantitative easing, and it is central to the question of what role monetary policy can and should play in stimulating a faster recovery from the Great Recession. It is also the subject of a debate between one of the world's most prominent economic scholars, Paul Krugman, and a feisty Australian economist, Steve Keen.
Lacy Hunt on Debt, Austerity and Recovery
by Robert Huebscher,
Global economies are experiencing unsustainable debt disequilibrium, according to Lacy Hunt. Economic textbooks preach that equilibrium, rather than transition, should be the predominant condition. But our attempts to reduce our indebtedness by taking on more ? and less productive ? debt are weakening our economy and creating unstable conditions.
Ponzi's Children
by Michael Lewitt,
Europe, whose economic condition is nothing less than terminal, is about to receive what physicians refer to as a 'zetz' of morphine in the form of M. Hollande. A 'zetz' is the final dose that doctors give to dying patients to hasten their passage to the afterlife. In Europe's case, however, the medicine is not going to be painless, and its administration is not based on mercy but on resentment and stupidity.
McDonald's Back In Value, Above Average Growth And Yield
by Team of F.A.S.T. Graphs,
McDonald's represents an excellent choice for the prudent dividend growth investor seeking both capital appreciation, and above-average current yield and the opportunity to grow both in the future. With its recent pull-back, McDonald's is priced at the upper end of our valuation corridor. Therefore, although the company is not cheap, we do consider it a sound long-term investment at these levels. Furthermore, we would suggest that if the stock continued to drop from these levels, the prudent investor could use the lower price as an opportunity to average down their cost basis.
Southern Co: A Solid Dividend Choice Worth Waiting For
by Team of F.A.S.T. Graphs,
We believe that Southern Company represents an extremely high-quality option for the investors seeking a high level of current income with an opportunity to grow moderately. However, we believe the current valuation is a little extended. Although Southern Co's current stock price is currently within our corridor of value, it is at the high end. Therefore, we would be more comfortable in recommending Southern Company if the PE ratio were a couple of points lower. On the other hand, Southern Company is an extremely high-quality and stable utility that may be worth waiting for.
How Big is Almost?
For decades the fondest wish of the finance professoriate has been to prove that money managers who believe they earn alpha are kidding themselves and their customers. The latest attempt, titled Active Portfolio Management and Positive Alphas: Fact or Fantasy? is the work of Cornells Robert A. Jarrow, a prestigious name in mathematical finance. Jarrow, based on some previous work with Philip Protter, sets out to prove that the source of all (or nearly all) alpha must be a true arbitrage. Since true arbitrage is vanishingly rare, he then argues alpha must be as well.
Dividends: A Timeless Component of Equity Return
With interest rates at historic lows and many dividend-paying stocks boasting yields comparable to or higher than US Treasurys, it is no wonder that dividends have recently been at the forefront of many investors minds. But dividends have a long history as a significant component of total return, and todays buzz is just the most recent chapter. Stripping away the noise, what should investors consider as they survey the universe of dividend paying companies? We believe dividend payments are poised to grow in 2012, likely faster than earningsper-share growth.
Middle East/Africa First Quarter 2012 Economic Review
by Team of Thomas White International,
While the Middle East and Africa (MEA) region continues to weigh the impact of the tumultuous Arab Spring uprisings, the area is facing against another challenge yet again. In addition to the existing domestic instability, a strained external environment (the Euro debt crisis) is proving to be a major threat to the regions trade, tourism, remittances and other exports receipts. According to the World Banks Global Economic Prospects report, the economic recovery seen in Morocco, Jordan and Tunisia in late 2011 is likely to stall in 2012.
Emerging Market Brands: From Backstage to Center Stage
If the growth of the emerging market consumer class persists, it should translate into more clout for local consumer brands. The global emerging markets middle class is anticipated to grow from 430 million in 2000 to 1.2 billion by 2030.3 By some estimates, China and India are expected to account for two-thirds of the expansion in emerging markets.2 Its not a given, but such a large group of people with diverse tastes in consumer goods could be a boon to emerging brands over the long term.
European Debt Crisis Never Went Away
US stocks are having a big day today, with the Dow up just over 200 points. But there are problems lurking in Europe that could be quite negative for global equities over the next several weeks. There are fears that Spain and perhaps Italy will need more bailout loans in the weeks just ahead. Thats our topic for today. In December and January the ECB took the unprecedented step of loaning apprx. 1 trillion euros to European money center banks in an effort to buy some time for the banks to recapitalize. The loans had three year maturities, and the interest rate was an incredibly low 1%.
Muppet Capers
by Michael Lewitt,
Investors enjoyed strong stock market and credit market gains during the first quarter of the year, but storm clouds may be forming on the horizon. Corporate profits have likely peaked. Stocks may be the best house in a bad neighborhood, but houses in that neighborhood appear to be fully priced for now. There are also some troubling signs in the bond markets, particularly the long end.
Equity Market Review & Outlook
Looking out to year-end, Congress and the White House will be required to act on a long list of expiring tax measures and a debt ceiling increase is necessary as well. As we saw in 2011, compromise is very difficult to achieve and the elections introduce another level of uncertainty. However, the markets current attractive valuation builds in some of these risks. Beyond our shores, there is always the possibility of disappointment in Chinas growth trajectory, and further serious challenges with weaker members of the euro zone should be anticipated.
Carlisle Companies Inc.: Accelerated Earnings Potential and a Growing Dividend
by Team of F.A.S.T. Graphs,
Carlisle Companies Inc. appears to be poised for accelerated earnings and dividend growth. Even though this company offers a below-market current yield, it is a Dividend Champion with 25 years of raising their dividend. On the other hand, the accelerated expected earnings growth should lead to a rapidly increasing future growth yield that could reward shareholders that are more concerned with future income than current. Investors seeking above-average capital appreciation, coupled with a dividend that could grow at above market rates might want to look deeper into Carlisle Companies Inc.
Flexible Strategies for Longevity Protection: Comparing Two Products
by Joe Tomlinson,
Products that guarantee income for life can be useful for retirement planning, but many clients also want flexibility and control over their investments. Two products that can meet these objectives are variable annuities with guaranteed lifetime withdrawal benefits (VA/GLWBs) and deferred income annuities (DIAs).
Pigs and Panics!
by Jeffrey Saut of Raymond James,
As stated, this is a key week for the equity markets and we continue to wait and see how the equity markets resolve themselves on a short-term basis, a trading stance we have been in for weeks. Meanwhile, for investors, I met with a portfolio manager last week whose investment style I think is suited for the current stock market climate. The investment style of Troy Shaver, PM of Dividend Asset Capital, sub-advisor to Goldman Sachs Rising Dividend Growth Fund (GSRAX/$15.05), is to invest in companies that increase their dividends by 10% per year on average for 10 years in a row.
If You Think All Utility Stocks Are The Same - Think Again
by Chuck Carnevale of F.A.S.T. Graphs,
Utility stocks, especially regulated utility stocks share certain characteristics that differentiate them from the typical dividend growth stock. On the plus side, utilities are thought of as predictable stocks with low volatility characteristics. Utility stocks also tend to provide a higher current yield than many dividend growth stocks. On the other hand, all of this consistency comes at a sacrifice of growth. Since the typical utility has a significant portion of their businesses regulated, their ability to grow earnings and dividends is restricted.
The Easy Money Saloon
by Michael Lewitt,
When two of the world's soundest central banks (Israel and Switzerland) start investing their reserves in stocks (the Bank of Israel is run by the highly respected Stanley Fischer for God's sake!), one has to wonder what the world is coming to. Apparently the global saloon is expanding its boundaries. No doubt we will soon hear the ECB is merging with the London Stock Exchange.
Questions of Character
by Michael Lewitt,
As a long-time investor in leveraged companies, the character of management has long informed my decisions of where to direct capital. There is no margin of safety when you invest in a company managed by dishonest or reckless managers, or a management team that has a history of placing its own interests before those of its shareholders or creditors. The same is true of choosing an investment manager.
The demise of risk-on / risk-off and the emergence of heteroscedasticity
by Jason Doiron of Sentinel Investments,
I estimate that I inadvertently watch 12 hours of financial news programming per day. Too much television? perhaps, but for a portfolio manager it has become an occupational necessity. One of the greatest benefits to watching this much television is that I can recite verbatim every commercial that plays on CNBC with no clue which company is sponsoring the ad - pig on a skateboard anyone? The other benefit is that I am provided with a front row seat to a rogues gallery of pundits who describe the complexities of the financial markets through sound bites.
The Wages of Denial
by Michael Lewitt,
Europe is insolvent, and hopelessly so. Her procurer - the European Central Bank (ECB) - can front her some money for a while, but in the end she is either going to have to repay him or suffer a very rough consequence. In the meantime, however, she can continue to entertain her customers, in this case those willing to extend her credit in one form or another. Sooner rather than later, however, these creditors are going to grow tired of her tricks and turn their attention otherwise. At that point, she will be left to deal with the ECB because nobody else will have her.
Europe Needs a Good Crisis
by Michael Edesess,
When it comes to economies in general and financial crises in particular, it's remarkable how little we actually understand. While global financial actors struggle to restructure Greece's debt and to avoid contagion throughout Europe's periphery, we should recall the lessons of the Asian-Russian crisis 15 years ago. As the writings of Joseph Stiglitz and Martin Wolf remind us - and those events illustrate - crises are part of an evolutionary process, and the afflicted economies often emerge with surprising vigor.
The Gutenberg Economy
by Michael Lewitt,
As commentators near and far speculate on what 2012 will bring to the global economy and markets, there is little question that one factor will be decisive: the central banks' printing presses. Both the Federal Reserve and the European Central Bank (ECB) will keep printing dollars and euros around the clock until their presses run out of ink.
The Protein Bomb
Population will grow from 7-8.3 billion people over the next decade. Meanwhile, arable land across the world will shrink and living standards will continue to rise, with the OECD projecting 3 billion new middle class consumers over the next 20 years. Many of these people will change their diets in favor of more animal protein. Livestock is quite inefficient in terms of converting grain to energy, so the pressure on farmers to deliver more will be immense. We conclude that agriculture should be represented in every long-term portfolio, but farm land has already risen a lot in value.
2012: A Year in the Global Economy
Global growth is set to slow further in 2012 largely as a result of the euro crisis. On the positive side, two factors should support activity in 2012. The first is a fall in inflation, which will support household real incomes leading to stronger consumer spending. The second is the strength of the corporate sector; companies have stockpiled cash and built up profits. However, Europe is entering a serious recession and will weigh on growth elsewhere. Euro policymakers should redouble their efforts to find a solution to the eurozone crisis.
Dividends: Proposed New Tax Rates
We are in a very attractive period for dividend paying equities. With yields from higher credit quality bonds at historical lows, an investing public hungry for income has to consider an increased allocation to equity income. The backdrop is positive for them to do so with healthy cash flows and historically low payout ratios creating a solid foundation for reliable and growing dividend yields. Given the strong outperformance of the highest current yielders in 2011, we continue to advocate seeking out companies with the ability to grow their dividends sustainably in the future.
European Update: Volatility Will Remain High Amidst Rating Agency and Political Uncertainty
S&P downgraded nine of the 16 Euro area countries on credit watch negative. Germany is now the sole AAA country with a stable outlook. The primary drivers of the downgrades were reduced political and external scores. The near-term market impacts have been relatively muted, as the downgrades were not as bad as investors may have feared. However, the negative outlooks across the region and potential for further downgrades. Within the Euro area, further volatility is likely to be reflected in lower German yields relative to other Euro area bond markets.
Still Losing the War on Unemployment
by Mohamed A. El-Erian of PIMCO,
The first Friday of every month, you will find me among those eagerly waiting for the release of the latest government data on jobs. Such eagerness, however, should not be confused with joyfulness. While the numbers have markedly improved over the past year, too much of the commentary has been overly partial and, sometimes, dangerously misleading a situation that is likely to grow worse in the run-up to the November elections.
Bob Doll Believes the Recent Equities Rally Could Continue
by BlackRock,
Conditions have improved compared to last quarter, with the US economy showing signs of acceleration and European policymakers moving further along the path of progress. With the bearish tone receding, investors should consider moving into "risk" assets and out of "safe" assets, especially on pullbacks.
Barry Eichengreen on the End of the Dollar
by Dan Richards,
Barry Eichengreen is a professor of economics and political science at the University of California, Berkeley and a former senior advisor to the International Monetary Fund. In this interview, he discusses the future of the dollar as the reserve currency and the role of the IMF in the Eurozone crisis. This is the transcript of the interview.
To Fight or Not to Fight the Worlds Central Banks
We are skeptical that fiscal austerity alone is sufficient for all eurozone countries to grow and remain solvent. We thus expect the ECB to continue supporting the euro area with liquidity in 2012.
Recent central bank policy in China is oriented toward stabilizing growth in a political succession year, while balancing lingering inflation and medium-term systemic risks.
Investors may want to hedge portfolios by looking to select emerging markets with the ability and willingness to cut policy rates both from a cyclical as well as structural perspective.
Straightening Out the Straits
by John Browne of Euro Pacific Capital,
Recently some of the fears that investors had focused on in the 11thhour debt negotiations in Greece have drifted southeastward towards the Straits of Hormuz. An increasingly bellicose Iran threatens to throw the world economy into confusion with the potential closure of one of the worlds most important sources of energy. Catastrophic failure in Athens or the Gulf could plunge the world into severe recession if not depression. Having discussed the Eurozone at length, we focus this week on the threats posed by Iran.
2011 Review and Outlook
While there is plenty to worry about globally, particularly the European financial crisis, Iran, and domestic policy decisions, we can take some comfort that corporate earnings continued to grow and our economy is muddling through with positive GDP numbers. Traditionally, election years are positive for equities. Since 1928 there have been 21 Presidential elections with only three of those years producing negative returns for the S&P 500. Until we have more clarity on the U.S. election, domestic policy decisions and the European financial crisis we will remain cautious and flexible.
Beyond Reinhart and Rogoff
by Robert Huebscher,
My article two weeks ago, The Misreading of Reinhart and Rogoff, elicited a number of challenges, both from those who argued that excessive debt imperils our economic growth and from those who claimed that my proposed solution was unworkable. Among those challengers was Lacy Hunt, who raised several valid concerns. I will explain why I disagree with Hunt and others, and why the dollar's position as the reserve currency increases our borrowing capacity. But our ability to borrow cannot be a license to spend unwisely, and I will conclude by expanding on the policy choices the US must pursue.
Africa: Opportunities and Challenges in a Growing Economy
by Team of The Royce Funds,
As the South African economy continues to mature and other, even less developed, economies begin to thrive, we will keep our attention focused on company fundamentals, corporate governance, and what we think are attractively undervalued businesses with the potential to grow in the global economy. As the bulk of Africa's economies are frontier markets, still progressing toward the status of developing economies, the continent as a whole represents long-term opportunities that will require patience and diligence. Its resources and demographics are likely to make it well worth the wait.
An Essential Client Conversation ?Will I be able to pay for my hip replacement at age 85??
by Dan Richards,
Advisors face a big challenge in planning for boomers. Your assumptions about how long they'll live and the nature and cost of their lifestyle as they age will dramatically impact your planning decisions. Conversations with boomers about those topics and about the implications of funding health care are difficult but important.
ProVise Bullets
by Team of ProVise Management Group,
The season for predictions is behind us and we thought it might be fun to come up with a few predictions that go out on a limb, both positively and negatively. Here are five semi-wild, but possible predictions for 2012. 1: Jobs, especially manufacturing jobs, return to America. 2: Switching from the economy to politics, the Republicans will hold a majority in the House, although they will lose some seats. 3: Turning to the world, the euro survives in spite of its being badmouthed over the past several months, and it strengthens late in the year. ...
The Misreading of Reinhart and Rogoff
by Robert Huebscher,
If the cry for deficit reduction rests on an intellectual framework, it would be the work of Reinhart and Rogoff, whose book, This Time is Different, has been hailed for its historical study of financial crises. A key finding - that growth slows once the ratio of debt-to-GDP exceeds 90% - has been widely cited by those calling for decreased government spending. But those calling for deficit reduction have largely ignored a number of caveats that Reinhart and Rogoff gave with respect to their 90% threshold, and as a result many warn that the US faces a Greek-like sovereign-debt crisis.
Gundlach on the Key Risk for Bond Investors
by Robert Huebscher,
Watch out if you own a bond fund that underperformed its benchmark by 2% or more last year, as most did. Rather than put their careers at risk by suffering a second year of poor performance, those fund managers will turn to indexation, according to DoubleLine?s Jeffrey Gundlach. And since the Barclay?s Aggregate Index holds nearly 35% of its assets in Treasury bonds with near-zero yields, its investors will endure poor returns.
Results 2,551–2,600
of 2,772 found.
