|
|
Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
October 28, 2008- Vol 2, Issue 44
|
|
|
|
|
|
|
|
Charley Ellis has written the
definitive history of Goldman Sachs, from
its roots in the late 19th century, through the career of legendary
"Mr. Wall Street" Sidney Weinberg, to today's generation of
leaders. We speak with Ellis about
his decade-long project and the role of former Goldman CEO Henry Paulson in current events.
Amid the turmoil throughout the financial markets, one sector has emerged
to offer attractive risk-return characteristics. High-grade corporate bonds now carry near
double-digit yields. We explore this sector and the
options for advisors to capture attractive returns.
We review the performance of the most popular
mutual funds in the Advisor Perspectives universe during the
third quarter of this year. Foreign equity and municipal bond funds
outperformed their benchmarks, both in Q3 and for the trailing 18 months.
More articles below.
We have four guest contributions:
Author Vitaliy Katsenelson (who
we interviewed last week) writes about the psychology of investing in bear markets. He assures
investors that, despite the falling prices of recent purchases, they are
not as dumb as they think.
Ron Surz, a frequent contributor to these pages, highlights problems with Q3 2008 comparisons to industry
standard benchmarks, such as those used by Russell, Morningstar, and S&P.
Ron Brounes, another frequent contributor to our publication, looks at the five stages of grief and how they
relate to the plight of advisors and investors in today's markets.
Brounes offers his advice for coping with
portfolio loss.
Wealth management software vendor NorthStar recently hosted a roundtable
discussion with senior executives of advisory firms. NorthStar's
President Collin Cohen discusses the consensus that emerged regarding how firms can address the turbulence from the
credit crisis.
Our issue last week had a larger-than-usual dose of bear market commentary,
and a letter to the Editor takes us to
task for this pessimism. A second letter argues that equity markets are undervalued based on an
analysis of interest rates.
Lastly, we highlight some recent Advisor Market Commentaries.
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 use the "Safe Unsubscribe"
button at the bottom of this email.
|
|
|
|
|
Charley Ellis on Goldman Sachs and
Henry Paulson
|
|
Our interview with Charley Ellis explores one of the key factors
contributing to Goldman Sachs' success - its ability to recruit and retain
top people. Ellis also discusses one such person - Henry Paulson -
his role as Treasury Secretary during the financial crisis.
Read the article
|
|
Tantalizing
Opportunities in High-Grade Bonds
|
|
High-grade corporate bonds are selling at compelling yields on a historical
and absolute basis. Advisors funding income portfolios should look
closely at this asset class. But the potential for rising inflation
and credit defaults has been heightened by the unprecedented financial
crisis and huge corporate failures that have already occurred.
Read the article
|
|
Q3
2008 Performance among the Most Popular Mutual Funds in the Advisor
Perspectives Universe
|
|
Since March of 2007 we have been tracking the performance of the actively
managed mutual funds used by financial advisors who manage the assets of
high- and ultra-high net worth investors. In this latest quarterly
installment of our analysis, we show that foreign equity and municipal bond
funds have outperformed, but equity and taxable bond funds have
underperformed.
Read the article
|
|
You
Are Not as Dumb as You Think - or - Psychotherapy for Bear Markets
|
|
Lately, Vitaliy Katsenelson has been getting this nagging feeling that
everything he touches turns to dirt. Every time he buys a stock that is
already down a lot - the one his analysis leads him to believe is cheaper
than dirt - it declines more. Did he completely lose his ability to
value stocks? Did he start ignoring Will Rogers' advice? Buy stocks
that go up, and if they don't go up, don't buy them.
Read the article
|
|
Warning:
Market Meltdown Generates Index Mayhem
|
|
Ron Surz issues a warning as you begin third quarter performance reviews. Because
they miss an important aspect of the market's composition, Russell, S&P
and Morningstar index results for the year-to-date through 9/30/08
are dangerously misleading and are likely to cause bad decisions. And
the problems spill over into the new and growing area of target date funds,
although there are only a few indexes from which to choose.
Read the Article
|
|
The
Five Stages of Grief: Nothing a Little Patience and Renewed Confidence
Can't Cure
|
|
The "five stages of grief" typically are associated with death
and dying - individuals struggling through the harsh realities of facing a
terminal disease. These days, investors seem to be facing a slow
death too, as they watch their portfolios and retirement savings evaporate
before their very eyes. Advisors, in turn, must add to their normal
roles, playing doctor and psychologist while they help guide their clients
through these gloomy days.
Read the Article
|
|
In
Turbulent Times, Focus on the Fundamentals
|
|
The credit crisis' devastating impact on the global banking system has
caused unprecedented challenges for the wealth management industry. As
advisors attempt to manage the crisis and rebuild their client
relationships, senior-level wealth management executives are taking steps
to weather the storm and strengthen their firms in the process.
Read the Article
|
|
Letters
to the Editor - Bear Market Sentiment and Measuring Market Valuation
|
|
We have two letters to the Editor. The first takes issue with the
several of our articles last week which were less-than-optimistic about
prospects for the economy and the market. The second addresses Vitaliy
Katsenelson's analysis (showing that the market is overvalued based on
"normalized" P/E ratios), and argues that current levels of
interest rates imply a much more attractive market valuation.
Read the Letters
|
|
Highlights
from Advisor Market Commentaries
|
|
We highlight recent submissions to Advisor Market
Commentaries:
David Fried of Fried Asset Management writes an optimistic piece, citing
this piece of advice: "If Warren Buffett were sitting in your
living room having coffee and playing bridge with you and, say, financial guys
from FOX News, CNBC and the Internet, whose investment advice would you
take?"
Read the Commentary
Mike Goodson of RDL Financial writes an entertaining parable comparing the
plight of investors to Dorothy's travels in the Wizard of Oz.
Read the Commentary
|
|
Advertise
in Advisor Perspectives
|
|
Our newsletter goes to over 65,000 RIAs, wealth managers, and financial
advisors. See how you can deliver your message to our sophisticated
audience.
Read more
|
|
Advisor
Perspectives
Box 380
Lexington, MA 02420
(781) 376-0050
|
|
|
|
|
|
