Advisor Perspectives Vol.6:iss31

Dear Reader,

July 31, 2012 - Vol 6 No 31

Advisor Perspectives is hosting an Invesco Powershares webinar The Best Tools for Hedging a Portfolio Against Inflation. The webinar will take place on August 9th at 4pm EST. Please register to attend this informative event.

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The False Promise of Gold as an Inflation Hedge

By Michael Edesess

If you were a time traveler, hopping from one point in history 2,000 years forward or back, you'd best carry with you - if your time machine will allow it - a small stash of gold. Gold has been an effective hedge against inflation over the very, very long term. But that's about all it's good for. The other common reasons for owning gold - in particular, to use as a short-term or even a long-term hedge against inflation - are baseless.

Critical Focus for Munis: Credit quality navigating the pitfalls of today's municipal bond market

Sponsored Content By American Century Investments

The last four years have been a remarkable period in municipal bond (muni) market history. The 2008 Financial Crisis and the Great Recession transformed the high-grade U.S. muni market and how people invest in it. What was once a relatively homogenous bond sector in terms of its credit quality and ratings became much more heterogeneous. Under these conditions, we believe experienced professional credit research and portfolio management are now crucial to investment success. This article outlines our muni investment processes.

The Alternative to AUM-Based Fees: The Total Profitability Retainer Formula

By Bob Veres

Many - perhaps most - advisors are overcharging a few of their clients and undercharging the rest. In other words, a small number of investment advisor clients are subsidizing the services that the others are receiving. Here's a way to address that.

The Supreme Court Rules on Health Care Reform: What it Means for Investors

Sponsored Content By Eaton Vance on Washington

The 2012 election is looming large. The stage is set for a "fiscal cliffhanger" in Washington. Let Eaton Vance help you prepare for the big changes that may lie ahead. Read our latest insight What is the "Fiscal Cliff"?

Expect Headwinds for Stocks If Hoisington is Right about Bonds

By Keith C. Goddard, CFA

Might today's historically low interest rates in the U.S. persist for years to come? The latest Quarterly Review and Outlook from Hoisington Investment Management forces readers to consider that possibility, refuting the reversion-to-the-mean mindset that causes many people to expect higher interest rates in the not-too-distant future. If the Hoisington model for the economy turns out to be right, the implications for the stock market are unfavorable.

A Lesson from the World's Best Restaurant

By Dan Richards

Spain's El Bulli was considered the world's best restaurant, once receiving two million requests in a single day for reservations. A very successful business owner procured one such reservation - and told me of an important lesson for advisors.

Beyond the Ultimate Death Cross

By Georg Vrba, P.E.

Last week, I showed why the 'ultimate death cross' is not a bearish signal. But the methodology behind that signal - what's known as a 'golden-cross trigger' - can indeed offer a reliable guide to investors. And one can do even better with a simple improvement to the trigger that I have devised.

Venerated Voices

We published our quarterly update for the Venerated Voices awards. Rankings were issued in three categories: The Top 25 Venerated Voices by Firm, The Top 25 Venerated Voices by Advisor and The Top 10 Venerated Voices by Commentary.

Dealing with Elderly Clients

By Beverly Flaxington

What do you do when your client base is largely made up of elderly people and they are starting to fail - especially mentally? I have a number of clients who seem to be suffering from early dementia and memory loss. I don't want to be offensive to them, but I don't trust they even understand what I am saying sometimes about their financial situation.

Career Opportunities

As a service to our clients, we are posting career opportunities for firms that seek to add financial advisors and planners to their staff.

Letter to the Editor

A reader responds to Bob Veres' article, Why Are Advisory Fees Lower Than They Have To Be?, which was published on July 10.

Highlights from Market Commentaries

Here are the top three commentaries from last week.

Why We Don't Rebalance

Research makes a compelling case that investors should rebalance their portfolios, yet most investors do not do so. Why not? The answer is less about behavioral mistakes and more about the fact that rational individuals care more about other things than simply maximizing investment returns.

Tags: US Investment Themes

Why We Don't Rebalance by Jason Hsu of Research Affiliates

Low Interest Rates Are Not Enough

Welcome to what could be called "GGIRC," the great global interest rate convergence whereby interest rates steadily converge to zero in many countries around the world, both advanced (other than the crisis European economies) and emerging (other than the persistent financial basket cases). In theory this is a good thing for a global economy. In practice, however, the situation is much more complicated and not so benign.

Tags: US Europe Asia (ex Japan, India, China) Investment Themes

Low Interest Rates Are Not Enough by Mohamed El-Erian of PIMCO

Bubbles without Markets

A speculative bubble is a social epidemic whose contagion is mediated by price movements. The speculative bubbles in the housing, equity, and commodity markets that preceded and accompanied the current global financial crisis are also its ultimate cause. But, before we conclude that we should rein in the markets, we need to consider the alternative.

Tags: US Investment Themes

Bubbles without Markets by Robert Shiller of Project Syndicate