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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
March 10, 2009- Vol 3, Issue 10
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Of the major global economies, China stands out because of its size and rapid growth. In
both the short and long term, China is likely to grow faster
than any developed market, creating opportunities for investors.
To better understand China's economy in 2009 - The Year of the Ox - and beyond,
we spoke with Rachel Ziemba, who works with Nouriel
Roubini at the RGE Monitor.
Jeff Tyler, senior portfolio manager and market strategist for American Century Investments, looks at trends in key economic indicators during
the first quarter of this year and
their investment implications.
We thank American Century for their sponsorship.
Depressed asset values, volatility, and a flight to quality have forced every sector of the asset management industry to
reexamine its business model. Radical transformations are
on the horizon. We speak with three industry experts - Chip Roame, Geoff Bobroff, and Robert Ellis - about the changes
advisors should expect.
Wharton professor Jeremy
Siegel wrote an op-ed article in the Wall Street Journal
proclaiming that the flawed computation
of the earnings of the S&P 500 is means the market is undervalued. He
explains that because S&P 500 index doesn't weight earnings by market
cap but simply aggregates them together, earnings
misrepresent the true reality of corporate profitability.
Guest contributor Vitaliy Katsenelson debunks Siegel's logic.
More articles below:
Today's number one priority for advisors is
to have as many face-to-face and phone meetings
with clients as possible. Just talking to clients isn't good
enough, however. To get maximum return on your time, Dan Richards identifies the five key
steps to high impact client meetings.
The automakers are
asking the government for another $30
billion in bailout funds. In this editorial, we argue that
this bailout is doomed.
Based on the experience of the postal service, the combination of government control and a powerful
unionized labor force will destroy the automakers' business model.
Bob Veres has been having the same discussion lately with a variety of
advisors, and sometimes the conversation
gets heated. In this guest contribution, he lays out his
position for all to see, with the hope
that it will start a useful dialogue.
We have two letters to the
Editor regarding last week's article, Why Diversification is Failing,
along with a response from
Sebastien Page, one of the authors of the research upon which the
article was based.
Lastly, we highlight submissions to Advisor
Market Commentaries.
We welcome guest submissions from our readers. For more information, here are our guidelines.
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Our interview with Rachel Ziemba of the RGE Monitor covers every important aspect
of the Chinese economy. Ziemba explains why her forecast of 5% growth
in China's
GDP is below the consensus, and discusses the differences between China's
stimulus package at that of the Obama administration.
Read the article
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Asset Allocation Perspective: A Time of Tremendous
Challenges and Opportunities
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Last December, the National Bureau of Economic Research (NBER) made it
official: We are in a recession and have been
since December 2007. The charts in this Asset Allocation Perspective
incorporate data and trends going back to the beginning of 1980 so that
comparisons can be made between recent trends in unemployment, prices and
industrial production and those in past recessions such as the sharp and
prolonged 1981-82 downturn.
Read the article
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Trends
in the Asset Management Industry
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Our panel of three
industry experts offers insights on key trends in the asset management
industry: consolidation in the mutual fund industry, shifts from passive to
active strategies, changing dynamics of fee structures, and the future of
funds of hedge funds.
Read the article
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Jeremy Siegel is Brilliant, Uplifting and Just Plain
Wrong!
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Vitaliy Katsenelson says Jeremy Siegel may manipulate earnings until they
conform to this thesis as much as he likes, but while some stocks are cheap
today, the S&P 500 is not.
Read the article
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Five Steps to High Impact Client Meetings
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In conversations with investors and advisors, there's one activity that has
a high correlation with achieving both of these goals -the use of a written
agenda. Dan Richards says advisors who consistently use written agendas
report that they make meetings more productive and help them stay on track,
and he details the steps necessary to create an agenda.
Read the article
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Editorial:
The End Game of the Auto Bailouts - The USMS
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The experience of the US postal
service should be a warning to those advocating a government bailout of the
auto industry. Since 1970, when the postal workers union won collective
bargaining rights, postal costs have skyrocketed and the business model of
the service, which operates as an independent arm of the executive branch,
has become hopelessly broken.
Read the article
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Do you believe the sage or lucky advisors who were smart enough to lower
equity allocations before last September? Does that mean you should switch
allocations to something more conservative now, when valuations are
low? Bob Veres says he is not ready to throw the "buy and
hold" advisors under the bus for sticking to their principles when the
alternatives look like they do today.
Read the article
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Letters to the Editor: Why Diversification is Failing
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In regard to last week's article, Why
Diversification is Failing, two readers argue that the problem
with diversification is not due to asymmetrical correlations; it is because
of asset bubbles. Sebastien Page of State Street Associates provides
the counterargument.
Read the article
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Highlights from Advisor Market Commentaries
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Nouriel "Dr. Doom" Roubini warns that the stock market will go
much lower.
Read the commentary
Fortigent's commentary shows that hedge funds have performed relatively
well recently, and may be farther along in the de-leveraging process than
you might think.
Read the commentary
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Advisor
Perspectives
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