Insights into the world of high- and ultra-high net worth investing
September 8, 2009- Vol 3, Issue 36
The last couple of years have been
rough for real estate, but there was a time not too long ago when it seemed
that this was a 'special' asset class, with REITs providing valuable diversification benefits and
consistently high returns. Do
today's low valuations represent an opportunity to buy? Can investors expect a return to low correlations
for REITs with the major equity market indexes?
The recent dislocation in the fixed
income market is likely to transform how investors and asset
managers approach fixed income investing for years to come. The corporate credit sector may now be the
single most important sector in generating
risk-adjusted outperformance. In Janus' recent brief, Why Credit Matters,
they discuss the structural market
changes that have occurred and the importance of fundamental, bottom-up credit analysis
and robust investment risk management in
navigating this changed landscape. We thank them for their
Many investment advisory and wealth management firms have struggled to increase assets in the recent
difficult markets. In order to understand how advisors feel they are faring - and the keys,
and obstacles, to success - we partnered with Advisors Trusted Advisor to survey advisors on the state of their
Experienced advisors know the importance of identifying and responding to the emotions that drive client's and
prospect's behavior - and tailoring the way they interact with
each individual's hot buttons. Dan
Richards discusses how you can simplify
your clients' lives with respect to communication, and provide a valuable service at the same time.
More articles below...
In a follow-up to his article last week, Shiller P/Es and Predicting Returns,
Joe Tomlinson explores the issue of how best
to use the Shiller P/Es in setting asset allocation strategies. He
extends his earlier work to show results for a selection of alternative
After a networking event, the
standard practice for most advisors is to send an email, make a phone call
or mail a handwritten note. But what happens after the initial
contact? Is there a system in place
to continue following-up in the coming weeks, months and years,
even if there is not an immediate fit? This is where most advisors fail in their networking strategy, according
to Kristen Luke..
Anyone paying attention to market news must know that September is the weakest month for stock market
performance. In this guest contribution, Jeff Miller
explains why the so-called September-effect
is really nothing more than a statistical aberration.
With global markets improving, liquidity returning to the credit markets,
and valuations improving, the infrastructure
market looks promising. In this guest contribution, Michael
Underhill argues that infrastructure assets,when chosen correctly, can diversify an investor's portfolio because
of their low correlation with other asset groups, their consistent returns coupled with lowered levels of
risk, and their potential for inflation-linked returns.
We have two letters to the Editor, commenting
on our articles about Politics and Fund
Mangers and Jim Cramer.
Lastly, we highlight submissions to Advisor
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Commercial real estate has not collapsed to the same degree as the
residential market. Has the REIT market priced in a likelihood of a
similar collapse, and subsequent defaults, in the commercial sector?
If so, what are the risks to REIT investors today?
Are REITs Now Undervalued?
Credit Matters: Fixed Income Investing in a Changed Landscape
Janus believes a
focus on corporate credit analysis will provide the most compelling
opportunities for fixed income managers to generate alpha. In their
opinion, this new paradigm favors those willing to pursue a
fundamentally-driven credit-oriented investment process with deep research
capabilities and an intensive risk management process.
Why Credit Matters: Fixed Income
Investing in a Changed Landscape
Survey Shows Best Ways to Business Growth
Advisors understand their competitive position in their own market, but
many have a hard time translating this knowledge into crisp marketing that
differentiates them. While business development is a big challenge for many
firms, the old adage "failing to plan is planning to fail" is
reality for wealth managers. Those who do focus on sales planning and
execution are much more successful at growing their businesses than those
who do not. Referral-based selling is still the #1 way to build an advisory
business, while advisors all but ignore the use of social networking and
media for marketing and selling - a field of rapid growth in other
Advisor Survey Shows Best Ways to
into Your Prospect's Hot Buttons
When he interviews
investors today, Dan Richards sees a change in attitude toward
communication - because of the market downturn last year, they almost
always want more contact. At the same time, they want better
communication - they often talk about wanting less communication that's not
directly relevant to their needs and more that's tailored to their specific
Tapping into Your Prospect's Hot
P/Es and Predicting Returns Some Additional Thoughts
Joe Tomlinson's original article highlighted the value of using Shiller
P/Es because of their historic relationship to long-term stock market
returns. He used an example to show how the P/Es might be incorporated in
an asset allocation strategy, and in this article he evaluates specific
Shiller P/Es and Predicting Returns
Some Additional Thoughts
the Most of your Networking after the Event
Kristen Luke offers two ways you can make the most out of your networking
after an event. However you decide to stay in contact, remember that
relationships take time to build and if you attend events, you should stay
in contact with as many people you meet as possible. Even if you are
awkward at networking events, strategies like the ones mentioned will help
make your networking efforts more effective.
Make the Most of your Networking
after the Event
in September? Time for a Reality Check!
debunks the belief that September is the worst month for stock market
performance, by explaining an experiment shows that the September pattern
is not a statistically significant deviation, at least over the last 48
Sell in September? Time for a
If history is an indicator, stock market recoveries have come in relatively
short bursts, and outperformance has occurred in a select number of
sectors; infrastructure has been one of these sectors. As the markets
continue to rebound from their lows, listed infrastructure securities are
well positioned to capitalize.
to the Editor
We have two
letters to the Editor, commenting on our articles about Politics and Fund
Mangers and Jim Cramer.
Letters to the Editor
from Advisor Market Commentaries
The Fed and Treasury spent all the available liquidity propping up Wall
Street's toxic asset waste pile and the banks that created it, so now Main
employers and private investors, and the relatively smaller banks that
support them both, must go begging for capital and liquidity in a market
where government is the only player left. The
notion that the Fed can even contemplate reversing the massive bailout for
the OTC markets, this to restore normalcy to the monetary models that
supposedly inform the central bank's deliberations, is ridiculous in view of the capital shortfall in
the banking sector and the private sector economy more generally.
Q2 2009 Bank Stress Test Results:
The Zombie Dance Party Rocks On by Chris
Whalen of Institutional Risk Analytics
I think it is very possible we will see a negative
GDP by the first quarter of next year. Unemployment will still
be rising. Deflation will be more of a
problem, because the housing component (the largest portion of
the consumer-inflation index), based roughly on rentals, is clearly under
pressure. While we don't have enough space this week to go into detail,
savings are up and consumer spending is
down. Without the stimulus, things would be much worse.
The Elements of Deflation by John
Mauldin of Millennium Wave Advisors
in Advisor Perspectives
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