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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
March 17, 2009- Vol 3, Issue 11
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Spreads on high yield bonds remain
near record levels, offering 20% yields.
We look at this asset class and the opportunities it presents, and we provide our assessment of its risk/return
profile.
A recent survey conducted by Janus and PLANSPONSOR Magazine revealed some key
findings about market attitudes toward target date funds.
We thank Janus for their sponsorship.
When fund manager Mariko Gordon read that Alan
Greenspan was willing to nationalize the banks, she figured he
had been abducted by aliens.
Gordon's guest contribution looks what Greenspan's about-face says about
whether fund managers should hold fast to
their strong opinions.
Dan Richards is convinced we are in the midst of a significant shift in the way we attract new
clients - something that will lead to the death of mass prospecting as we've
historically known it. Richards' guest contribution looks at the
demise of traditional prospecting tactics - like cold calls and hosted
presentation - and which prospecting
techniques are likely to succeed in the future.
More articles below:
Scott Welch of Fortigent shows how advisors can demonstrate their integrity without sounding
defensive. His Wealth
Management Hippocratic Oath lets us tell our clients that we
know there is a problem, that we know we have work to do, and that our
pledge to do everything in our power to build
and maintain trust is an appropriate - and critical - first step.
Target date fund (TDF)
companies would have us believe that their 2008 performance failure was a passing hiccup that will go
away. In this guest contribution, Ron Surz questions fund company claims that the 20%-plus loss in near-dated funds is
acceptable because the target date is simply
a speed bump in the highway of life. Don't believe them.
Brent Bentrim of Carolopolis Fiduciary Counsel looks at
the failure of Modern Portfolio Theory to
adequately anticipate the 2008 market declines. Bentrim's guest contribution shows how advisors can
utilize techniques such as semi-variance and
Omega to build better asset allocations.
Eric Kuang is Editorial Director for GuruFocus,
a web site that tracks the investment decisions of leading investors like Warren Buffett. In this guest
contribution, Kuang analyzes Buffett's
asset allocation and its implications for "ordinary" investors.
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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The opportunity for 20% returns across a diversified asset class - high
yield bonds - is very tempting. We look at the funds and ETFs available
in this sector - along with the sector's historical diversification value -
and offer our recommendation for allocations to junk bonds.
Read the article
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Target-Date
Funds Survey Raises Questions for Plan Sponsors and Participants
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Target-date funds have been broadly acknowledged as a powerful asset
allocation solution for retirement plan participants. And, they have
increasingly become the post-Pension Protection Act default investment of
choice for a growing number of plans. However, recent market turmoil has
elevated some key issues surrounding this retirement plan investment
option. A late-2008 survey, sponsored by Janus and PLANSPONSOR magazine,
uncovered some interesting findings on what Plan Sponsors think about
target-date funds.
Read the article
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Alan
Greenspan Abducted By Aliens
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In her quarterly
reports to clients, Mariko Gordon spells out what they've bought and what
they've sold ... and why. It's risky, because in her line of work you're
going to be wrong a lot of time, something that's not always easy to admit.
But the key is to be right more often than wrong; to win big and lose
small.
Read the article
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Advisors who invest the time and effort to ramp up client communications
and extend them to prospects will discover it is an effective and efficient
method of building your client base... and it will allow you to get past
the downward spiral in response rates to mass prospecting.
Read the article
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A
Modest Proposal for Wealth Managers: First Do No Harm
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Scott Welch provides a modest proposal is for wealth advisors to go on a
"trust offensive" and adopt as a standard part of their practice,
a wealth management version of the medical profession's Hippocratic Oath.
Read the article
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The
Target Date Emperor Has No Clothes
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Ron Surz dispels many of the excuses made by Target Date Fund providers regarding
their poor 2008 performance, and he offers his "Top 10 List" of
the reasons why TDF asset allocation should be conservative at the target
date, to avoid a repeat of the 2008 debacle.
Read the article
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Proper diversification towards an investor's goal is essential. Determining
each investor's Minimum Acceptable Return is critical to separating
rhetoric from reality and allows for advisors to be evaluated on the
'value-added' premise each espouse : allocating investor's assets to
achieve their goals and the implementation of that strategy through
specific investment choices.
Read the article
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Warren
Buffett's Asset Allocation
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As of December
31, 2008, Buffett held 10% in cash, 20% in stocks, and 20% in
fixed maturity securities and preferred stocks, while the other 50% of his
money was invested in businesses he controls. As Buffett's success
over the past 44 years shows, asset allocation is essential to navigating
economic hard times.
Read the article
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Highlights
from Advisor Market Commentaries
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John Mauldin comments on the descent of corporate earnings, Japan's
ongoing malaise, and the implications of Switzerland's
decision to devalue its currency.
Read the commentary
Charles Lieberman of Advisors Capital Management looks at the positive
implications of the consumer spending numbers.
Read the commentary
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Advisor
Perspectives
Box 380
Lexington, MA 02420
(781) 376-0050
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