Insights into the world of high- and ultra-high net worth investing
August 4, 2009- Vol 3, Issue 31
Nobel laureate economist Paul Krugman tells Eric Uhlfelder that massive
government spending is essential for generating growth, but
fears the first stimulus package will not
be enough to keep the economy from slipping back into recession
nor reducing unemployment.
Recent articles in Business Week, the New York Times and the Wall Street
Journal describe turmoil among high-net
worth investors and have profound implications for financial
advisors. Dan Richards
offers a five-point response for
advisors to counteract investor
disillusionment with their current relationship.
In an interview two weeks ago, Yale Endowment manager David Swensen singled out TIPS as the best way to protect against
inflationary and deflationary scenarios. We review a comprehensive study of the history of the
inflation-indexed bond market, including an explanation for the
extreme volatility in TIPS last year.
In this guest contribution targeted to the educated layman, Adam Apt
discusses the relationship between return
and risk. Only when you can keep in mind at one and the
same time these two concepts can you properly understand how to
invest. And you will also understand why you should invest. Without the marriage of the concepts, you will be
playing the market-or shunning it-as if it were a casino.
Kristen Luke covers drip
campaigns, where an advisor sends marketing
collateral to a prospect on a regularly scheduled basis. Luke
discusses how you can add prospects to your existing client communications
or create an independent program just for prospects.
In this guest contribution, advisor Frank Reilly of Reilly Financial
Services explains how technology helped
provide his clients better, more personalized service. Along
the way, he discovered that the truest
measure of successful technological innovation isn't necessarily
Return on Investment (ROI), it's what he thinks of as Return on Service
In our letters to the Editor, readers
respond to last week's article, How Long is the Long Run?, Geoff
Considine's article, The Retirement Portfolio Showdown:
Jeremy Siegel v. Zvi Bodie , and Ted Wong's article, Moving Average: Holy Grail or Fairy
Tale - Part 3.
Lastly, we highlight submissions to Advisor
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 email@example.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.
"I don't believe under the present circumstances a big increase in the
monetary base necessarily implies future inflation," says Paul
Krugman. "Remember, the Fed has not been printing vast
quantities of money."
Paul Krugman on the Prospects for
Wakeup Call for Advisors: Turmoil at the Top of the Market
Dan Richards says
three recent articles and others like them are a wakeup call for advisors.
The only question is whether you answer that call or press the snooze
A Wakeup Call for Advisors: Turmoil
at the Top of the Market
the Mayhem in 2008 in the TIPS Market
One of the most
interesting findings in a recently published study concerns the
diversification value of TIPS. TIPS reduce substantially the risk
(volatility) for long-term investors, when added to a portfolio of stocks,
nominal bonds, and Treasury bills. Moreover, the reduction in risk is
greatest when TIPS prices are most volatile.
Uncovering the Mayhem in 2008 in the
to Think about Return and Risk at the Same Time
Does the market give you something for nothing? Or is it a casino?
Surely there are few who still maintain the first view, which was common
during the febrile summer of the dotcoms in 1999, though it was seldom so
starkly expressed. Since the market collapse of 2008, far more have adopted
the gambling metaphor. The truth is not midway between the
extremes. In investing, you can never get something for
nothing. Investing can, however, come close to resembling a casino,
but only if you choose to make it so.
How to Think about Return and Risk
at the Same Time
Prospects to Clients through Drip Marketing
If you've spent valuable time meeting a prospect, don't let your efforts go
to waste. Let your marketing help you efficiently convert your
prospect to a client.
Convert Prospects to Clients through
New Way to Measure Technology Adoption - Return on Service
The key to using technology efficiently in an industry that rises and falls
on the basis of personal relationships remains essentially unchanged. You
must always ask yourself whether a particular application will improve your
ability to enrich the service you provide your clients.
A New Way to Measure Technology
Adoption - Return on Service
Letters to the
In our letters to the Editor, readers respond to last week's article, How
Long is the Long Run?, Geoff Considine's article The Retirement Portfolio
Showdown: Jeremy Siegel v. Zvi Bodie, and Ted Wong's article, Moving
Average: Holy Grail or Fairy Tale - Part 3.
Letters to the Editor
from Advisor Market Commentaries
John Prichard of Knightsbridge Asset
Management writes that investors had begun to feel a bit better
about things at our last writing. Terms like "green shoots" had
started to pepper the financial commentaries. Unfortunately, some of those
"green shoots" appeared to be wilting, reinforced by four weeks
of consecutive market decline in June and July. The University
consumer sentiment survey rolled over to the downside once again as seen
below, prompting some to declare that this "V" shaped market
recovery was now going to be shaped more like a "W", an
"L", or a square root sign.
Summer Quarterly Commentary
Tony Boeckh and Rob Boeckh of the Bank
Credit Analyst write that in the short run, huge deficits and
growth in government debt are necessary. They will continue to play a
crucial role in deleveraging the private sector and in helping to fill the
black hole in the economy that has been caused by the sharp increase in
household savings. Further out, government deficits will put upward
pressure on interest rates. However, much of the economy, particularly
housing and commercial real estate, is far too weak to absorb an
interest-rate shock. Therefore, the Federal Reserve will have to monetize
much of the rise in government debt, making it extremely difficult to
unwind the explosion in the Fed's balance sheet and consequent rise in bank
reserves - the fuel that could be used to ignite another money and credit
The Great Reflation Experiment
in Advisor Perspectives
Our newsletter goes to over 75,000 RIAs, wealth managers, and financial
advisors. See how you can deliver your message to our sophisticated
Lexington, MA 02420