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C tant Contact
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 June
29 2010 - Vol 4, Issue 26
Dear Reader,
"If the sun shines and it rains, the trees grow about on
schedule," wrote Jeremy Grantham, chairman of
Boston-based investment firm GMO, in his quarterly newsletter in
April 2007. Grantham's enthusiasm for timber, which
remains true to this day, may be excessive, despite the fact
that, on the surface, historical data seems to support his optimism.
If a tree falls in the forest, should you buy it?
Jeff Gundlach's keynote address at last week's Morningstar
conference documented the immensity of U.S. debt obligations and
the lack of choices available for alleviating that burden. As
he has stated in the past, he does not view inflation to be a
threat in the capital markets today. He cited six
options open to policy makers, but believes a seventh - some
form of default - is most likely.
For most successful advisors, the number one issue each day is how
to compress 40 or 50 hours of work into 8 or 10 hours. Dan
Richards doesn't suggest that advisors add items to their daily
to-do list lightly, but he does offer one novel idea from a
top-performing advisor.
Many advisors find themselves in a difficult quandary - they need
to market their businesses, but they don't have budget to do so.
Instead of finding ways to market on a dime, they throw up their
hands and hope that business will magically appear. Kristen
Luke shows how you can market your business on a zero-dollar budget.
More articles below...
In this guest contribution, Justin Locke says "looking
dumb" is a better strategy than trying to be smarter than your
clients and prospects. Locke is a professional musician and
author of a book we previously reviewed, The Principles of
Applied Stupidity, and he outlines a key tactic to persuade
prospects.
The value of the dollar is sure to erode, and investors will be
left to grapple with the inflationary consequences. As Vern
Sumnicht shows in this guest contribution, recent policies suggest steep
inflation may be just around the corner. Fortunately,
investors have some options to bolster their portfolios against
the threat of inflation.
In our letters to the editor, readers comment on two of last
week's articles: Improving on Morningstar's Ratings: Moving Beyond
Past Performance and The New Roth Rules: Are Your Clients Converting?
Survey Results - April/May 2010.
Lastly, we highlight submissions to 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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Timber as an Asset Class: If a
Tree Falls in the Forest, Should you Buy It?
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Jeff Gundlach: The US will
'Politely Default' on its Debt
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Five Minutes to Drive Your Day
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One way to start your day is a short team meeting.
Another is a novel approach a top-performing advisor recently told Dan
Richards about, and it takes just five minutes.
Five Minutes to Drive Your Day
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The Zero-Dollar Marketing Plan
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For advisors who don't have money to spend on marketing,
here are five suggestions on what you can do to market your business.
The Zero-Dollar Marketing Plan
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Winning Clients - By Being Dumb
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When you were three
years old, you knew nothing, you were constantly asking questions, and
you were always asking people to tell you stories. Everyone loved
you. It worked then, and it works now.
Winning Clients - By Being Dumb
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Inflation Protection Investment
Strategies
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Letters to the Editor
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Highlights from Market
Commentaries
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If one thinks of the
data as telling a story, the picture here would be a cliffhanger - where
our hero dangles from a steep precipice, clutching a rock of uncertain
strength, and the evidence is not clear about which outcome will prevail.
One possible outcome is continuity, and the other is abrupt change. It's
possible that things will resolve well, but we have to consider the
possibility that they will not. Investors should make sure that a
significant market decline would not derail their financial security or
future plans, or cause them to abandon their discipline after the fact.
Cliffhanger by John P. Hussman of Hussman Funds
Look at what we have today: No room to cut rates. No room - let alone
political will - to cut taxes. And, in contrast to starting a new war,
the U.S. is going to be pulling troops out of Afghanistan, which is a
good thing for the troops and their families, but in terms of GDP impact
it does represent fiscal withdrawal. The options to resuscitate the
economy when it enters a 2002-03 style growth collapse are extremely
thin, and probably lie on the Fed's balance sheet, which means the
bond-bullion barbell will likely remain a viable strategy.
Daring to Compare Today to the 30s by David A.
Rosenberg of Gluskin Sheff
The problem with trying to assess either supply or demand in the current
market environment is that everything is so confusing in the early stages
of this new secular paradigm of a global credit collapse. There is no way
to get it completely right. As Lacy Hunt has always maintained, it makes
much more sense to assess the outlook for inflation as the primary effort
in predicting Treasury rates. Maybe perhaps instead of inflation, we
should really be discussing deflation, which has emerged as the primary
trend, and governments have few bullets left in the chamber to deal with
it.
The Case for Bonds by David A. Rosenberg of Gluskin
Sheff
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