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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
June 30, 2009- Vol 3, Issue 26
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Astute investors search out insights
that aren't reflected in stock prices. For this to work, though, you have
to be prepared to differ from the pack
and defy conventional thinking - once an idea enters the
mainstream, it no longer gives you an edge. Dan Richards discusses
some important positive ideas that
unconventional thinking elicits from the news and analysis presented in traditional
media.
Many renowned financial experts declare that passive investing in a diversified index like the
S&P500 is the only sensible way to
manage money. In a follow-up to his article two weeks ago, Moving Average: Holy Grail or Fairy
Tale - Part 1, Ted Wong says that he respects their opinions but is unable to verify their claims. By
examining the evidence, he shows that the
Moving Average Crossover (MAC) system offers a superior risk-return profile
to a buy-and-hold strategy.
In an update to an article we published two months
ago, two economists compare today's
global crisis to the Great Depression. World industrial production,
trade, and stock markets are diving faster now than during 1929-30.
Fortunately, the policy response to date
is much better. The update shows that trade and stock markets
have shown some improvement without reversing the overall conclusion -- today's crisis is at least as bad as the Great
Depression.
More
articles below…
"A year ago, all kinds of new clients were coming on board - I was
firing on all cylinders" a veteran advisor told Dan Richards recently.
"Today, I'm having trouble getting
prospecting into first gear. I feel like I'm stuck in a rut and
I'm not sure how to get out." Dan sketched out a plan for two low cost prospecting lunches, with
six simple steps taking ten to twelve hours per lunch.
We have two sections of letters to the Editor - responses to Ted Wong's
article, Moving Average: Holy Grail or Fairy
Tale - Part 1, and to our article, The Road to Zimbabwe.
Lastly, we highlight submissions to Advisor
Market Commentaries.
We welcome guest submissions from our
readers. For more information, here are our guidelines.
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.
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In Search of Unconventional Thinking
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We need to help clients understand that getting superior returns requires
going against the grain and having the foresight, discipline and conviction
to first seek out and act on insights that others are missing.
In Search of Unconventional Thinking
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Moving
Average: Holy Grail or Fairy Tale - Part 2
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According to Ted
Wong, all claims should be treated as hypotheses until they are proven by
objective evidence - even a claim as sacred as the eminent passive investment
doctrine. Perhaps the generally accepted buy-and-hold investment principle
is only a fairy tale!
Moving Average: Holy Grail or Fairy
Tale - Part 2
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A
Tale of Two Depressions: June 2009 Update
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Two economists
comparing today's financial crisis to the Great Depression find that world industrial
production continues to track closely the 1930s fall, with no clear signs
of 'green shoots'. World stock markets have rebounded a bit since
March, and world trade has stabilized, but these are still following paths
far below the ones they followed in the Great Depression.
A Tale of Two Depressions: June 2009
Update
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Getting Prospecting into First Gear
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The core idea is to run informal lunches at your office for clients - to
which you invite selected prospects. These lunches achieve the dual purposes
of giving clients the chance to have their questions answered and getting
in front of prospects.
Getting Prospecting into First Gear
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Letters: Moving Average: Holy Grail or Fairy Tale - Part
1
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We present a number of questions and comments from readers on Ted Wong's article
last week on moving average systems.
Letters: Moving Average: Holy Grail
or Fairy Tale - Part 1
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Letters to the Editor: The Road to Zimbabwe
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Our article last week on John Williams' hyperinflationary forecast drew a
number of responses from some who agree and some who do not.
Letters to the Editor: The Road to
Zimbabwe
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Highlights from Advisor Market Commentaries
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Michael Nairne of Tacita Capital shows that when government bonds are
combined with stocks you get a more diversified portfolio that provides
superior downside protection with a reasonable opportunity for growth. This
is evidenced in the a graph that depicts a simulation of the potential
values of a balanced portfolio comprised of 60 percent stocks and 40
percent intermediate-term bonds over the next 20-years.
The Bond Hedge
It's true that inflation was relatively high and there were plenty of reasons
for concern and anxiety while Jimmy Carter was president (January 20, 1977
to January 20, 1981). But when Mark Metcalf of Merriman, Inc. looks
below the surface, the picture he sees isn't quite that dire. He was
especially interested in how the Standard & Poor's 500 Index performed
and how a 60/40 (stocks/bonds) allocation similar to his 60/40 allocation
performed. In his analysis, he tacked on an additional year (1981) to
reflect a second negative year for the S&P 500 and another year of
double-digit inflation
Inflation, Politics, History and
Investments
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Advisor
Perspectives
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(781) 376-0050
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