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August
3, 2010 - Vol 4, Issue 31
Dear Reader,
Of all the challenges facing our nation, none is as
daunting as trying to achieve economic growth and reduce
unemployment without adding layers of debt to our already bloated
deficit. Legislators and economists have debated the
merits of stimulus measures, changes in tax rates, and monetary
policies, but they are no closer to a consensus than they were at the
onset of the financial crisis. H. "Woody" Brock,
however, says a genuine solution is possible.
The
most overused, misused and misunderstood word in the investment
industry is "fiduciary."
Independent advisors, trade organizations and self-styled
"expert" groups have called for stockbrokers to adopt the
"fiduciary" standard to achieve a grand leveling of the
playing field for those who provide investment advice. This
is nothing more than unnecessary marketing hype, says securities
lawyer John Lohr in this guest contribution.
These days, there's a cloud of uncertainty over markets, with
questions about economic growth, government deficits, the timing and
impact of interest rates increases, unemployment levels and the
housing market. As Dan Richards writes, this environment is
when advisors can bring value, by providing perspective on both
sides of the debate about the value that stocks provide at today's
levels.
Since the mid-1960s, Paul Merriman has helped people manage
their money and their lives before and during retirement. He has seen
the good, the bad and the downright ugly, and in this guest
contribution he shares 10 retirement lessons from the smartest
people he knows.
Richard Koo is the Chief Economist of Nomura Research Institute,
and has served as an advisor to the Japanese government. In
this interview with Dan Richards, Koo explains why Japan's
recovery was thwarted by inadequate stimulus spending. We
provide a transcript and a video of the interview.
Kristen Luke provides the next two installments of her series
on low-budget marketing for startup RIA firms. She discusses
how to develop a client referral strategy and a drip marketing
program.
In a letter to the editor, a reader responds to Dave
Loeper's article, Fake Diversification Exposed: Does Asset Allocation
Work?, which appeared on July 13.
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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 Woody Brock: How to Achieve
Growth without "Bad" Deficits
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It is not simply a matter of spending money on traditional
public works infrastructure, Brock said. What's needed is a new Marshall
Plan, which rebuilt and created a strong economic foundation for Europe
following World War II.
Woody Brock: How to Achieve Growth without
"Bad" Deficits
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"Fiduciary": Much Ado
about Nothing!
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Stockbrokers already have a legal duty to act as a
fiduciary to their clients! And the various hurdles which have been
suggested for them to achieve official "fiduciary" status are
meaningless.
"Fiduciary": Much Ado about Nothing!
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Rebuilding Confidence in Stocks
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By sharing the arguments on both sides of the debate
with clients, using recent interviews with Jeremy Siegel and Robert
Shiller, you position yourself as someone who considers all the facts
before reaching conclusions and making recommendations.
Rebuilding Confidence in Stocks
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Ten Retirement Lessons from the
Smartest People I Know
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A successful retirement, like a successful life, rarely
happens by accident or default. It happens by design. Paul Merriman has
had the good fortune to know thousands of very smart people. Here are
10 lessons they taught him.
Ten Retirement Lessons from the Smartest People I Know
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Richard Koo: Lessons from
Japan's Decline
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Parts 8 and 9 of a Marketing
Guide for RIAs
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Letter to the Editor
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Highlights from Market
Commentaries
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The economy's New Normal of deleveraging, reregulation and
deglobalization will neither be aided nor abetted by a slower-growing
population, or by cyclical policy errors that thrust Keynesian
consumption remedies on a declining consumer base. Current deficit
spending that seeks to maintain an artificially high percentage of
consumer spending can be compared to flushing money down an economic
toilet. It would be far better to create and mimic other government
industrial policies aimed at infrastructure, clean energy, more relevant
education and less costly health care services.
Private Eye by Bill Gross of PIMCO
Investors who will need to fund specific expenses within a short number
of years - retirement needs, tuition, health care, home purchases etc. -
should not be relying on a continued market advance. If your life plans
would be significantly derailed by a major market decline, get out. In
contrast, if you are pursuing a disciplined, long-term investment
strategy, and you know from your own experience of the past decade that
you are diversified enough to ride out periodic losses without abandoning
that strategy, ignore my views (and those of everyone else) and stick to
your discipline.
Betting on a Bubble, Bracing For a Fall by John P.
Hussman of Hussman Funds
The bull market in bonds will end reasonably close to the point in time
that inflation (or deflation) bottoms. This is because the major economic
factor that correlates consistently with the direction of
market-determined interest rates, at least for long term Treasury Bonds,
is CPI Inflation. Core inflation should recede from around 1 percent now
to near 0 percent in the next 12-to-24 months, which would imply an
ultimate bottom in the long bond yield of 2.5 percent and 2 percent for
the 10-year T-note.
Market Thoughts and the Long-Term Outlook for Inflation
by David A. Rosenberg of Gluskin Sheff
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