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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
January 20, 2009- Vol 3, Issue 3
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An important goal for Advisor Perspectives is the collection and analysis of independent research
about the economy and the markets. As we enter what
promises to be a very challenging year for advisors, we are taking this
opportunity to synthesize that research into
a coherent forecast for the
markets. We then translate this forecast into our recommended asset allocation.
Yale endowment manager David Swensen set
off alarms throughout the investment community with his remarks last week
that hedge funds of funds were a
"cancer" on the institutional investor world. We
disagree with Swensen's assessment and explain why.
Emotional times like these often lead investors, both individual and
institutional, to make decisions that can have major negative repercussions on their long-term investment goals.
This is when an advisor's guidance can be
extremely valuable. While it may not be possible to recoup last
year's losses immediately, just keeping
participants on the right track can be invaluable for the long-term.
Dan Richards, a consultant who specializes in helping advisors acquire and keep clients, provides the
first in a series of guest contributions. Richards offers a four-point plan for talking with clients in
a down market, along with specific suggestions for facilitating difficult conversations.
Tom Au, Chief Economist with the Wentworth China Fund, is one of the few
individuals who correctly forecast market
performance in 2008. Au provides an updated forecast for 2009.
Marc Chandler, Brown Bothers Harriman's
global head of currency, delivered the keynote address at NICSA
(National Investment Service Company Service Association) East Coast
Regional Meeting on January 15. Chandler is bullish on the economy and the strength of the US
dollar.
Greg Valliere, Chief Political Strategist
at the Stanford Group and frequent contributor to CNBC, unabashedly admits he is an optimist. Valliere
expects the economy to recover by
mid-2009, with positive GDP growth over the second half of the year.
Later today you will receive a short
survey about your technology spending plans for 2009.
Please take a couple of minutes to answer
12 short questions.
Tomorrow you will receive emails from two of our sponsors - American Century Investments and Janus Labs. Their sponsorship
makes our publication possible, and we hope you will take the time to
review their offerings.
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.
If you have received this newsletter in error, or you do not wish to receive
future newsletters, please reply
to this email with the word "unsubscribe" in the subject
line.
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The consensus forecast from the independent analysts we cover is a recession
lasting through the remainder of 2009, with a slow recovery beginning in
2010. While equity returns are expected to be disappointing for the
coming year, we discuss those assets classes that promise attractive
risk-adjusted returns.
Read the article
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David
Swensen Speaks Out: Are Hedge Funds of Funds a Cancer?
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Swensen says hedge
funds of funds are "a cancer on the institutional investor
world." We show that hedge funds of funds performed admirably in
the tough 2008 environment. We disagree with Swensen's assessment and
explain why.
Read the article
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Rational
Advice for Anxious Participants
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Guest contributors Bob Padgette and Ted Ponko of Klein Decisions explain
that most retirement plan participants in the U.S. have been very hard-hit
by the recent market turmoil, and now they are looking for answers. The
typical participant does not have the knowledge or experience to make
rational decisions about investment and savings strategies for retirement
success. They can definitely benefit from your considered guidance, now
more than ever.
Read the article
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What
to Say When You've Said It All
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For many advisors, the biggest task is getting clients focused beyond the
immediate challenges we face. Consider using this structure to get clients
engaged in thinking beyond the near term - or develop your own
method. However you do it, bringing fresh perspectives and finding
something new to say when you've said it all should be a top priority for
most advisors.
Read the article
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Tom
Au: We Speak Again to Someone Who Foresaw the Collapse in 2008
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When we previously spoke with Tom Au, on April 3, 2008, he forecast a 50% decline
in the US markets for 2008 - a forecast that was far more accurate than
most other predictions. Au is more optimistic for 2009, and in our
interview he offers thoughts on how value-oriented strategies will fare in
the current year.
Read the article
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Greg
Valliere: The Economy will Grow in the Second Half of 2009
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Shrinking yield spreads, surges in mortgage refinance applications, and
lower energy prices all bode well for a sooner-than-expected turnaround,
according to Greg Valliere. Valliere, who was bearish throughout
2008, says the economy is poised for recovery, with the most serious risks
coming from geopolitical factors.
Read the article
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Making
Sense of the Dollar: The U.S. Will Lead the World Again
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The U.S. economic crisis isn't over yet. Marc Chandler predicts the economy
may have experienced its worst losses in fourth quarter 2008, with an
annualized 5% to 6% decline in gross domestic product (GDP). But things
will improve from there. In his opinion, the economy will contract again in
the first quarter of 2009, but less severely.
Read the article
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Highlights
from Advisor Market Commentaries
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Ray Ferrara of the ProVise Management Group provides his latest installment
of the ProVise Bullets, discussing a number of topics, starting with some
important recent changes to the handling of IRA accounts.
Read the commentary
Doug MacKay of Broadleaf Partners offers his forecast for 2009 along with a
discussion of how he is position his portfolio for what he expects will be
a range-bound market.
Read the commentary
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Advisor
Perspectives
Box 380
Lexington, MA 02420
(781) 376-0050
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