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October
12, 2010 - Vol 4, Issue 41
Dear
Reader,
Initially an
emergency action in response to the credit crash, the Zero
Interest Rate Policy has become a long-term policy. Click here to see Cambiar's President and
Director of Research discuss equities in this type of environment
(registration required).
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Interest
rates, many claim, have bottomed, making bonds the latest asset class
worthy of the dreaded "bubble" label.
Others counter that deflationary forces will prevail and that bonds
offer the best risk-adjusted returns in the market. Which side of this debate
you take matters profoundly, but making that call is not simply a
matter of predicting the direction of interest rates, as is the
typical focus of analysts.
Gold
recently reached all-time highs in several currencies as
investors flocked to the asset class as a safe-haven
investment. This is despite volatile financial markets and
continued investor concerns regarding the impact of the US
government's massive fiscal and monetary stimulus on
inflation/deflation. Learn why BlackRock
believes gold will continue to remain attractive to investors.
We thank BlackRock for their sponsorship.
Is
the last financial crisis over? Did we at least fix the
problems that caused the crisis? Were those the worst of our
problems? Answering those three
questions was the focus of a talk by Simon Johnson, formerly the chief economist at
the IMF.
Advisors need to
be aware of how legislative
reform for retirement saving will affect their
business. Marcia Wagner, a specialist in pension and employee
benefits law and principal of The Wagner Law Group, discusses a variety of topics related
to this theme. We thank ByAllAccounts for their
sponsorship.
Dan
Richard's quarterly letter is designed to balance some of the extreme
pessimism among many investors. Negative
sentiment is understandable given the real challenges facing the U.S.
and European economies, but is also a function of the overwhelmingly
negative media coverage to which clients are exposed. To balance today's
disproportionately negative views, you need hard facts.
More
articles below...
In the latest
edition of the HCM
Market Letter, Michael Lewitt argues that reported
attempts by countries to devalue their currencies will only result in
higher inflation and not economic growth. QE2 will similarly
fail, and the necessary "heavy lifting" for the economy
should be through fiscal, not monetary, policy. A continuation of Keynesian
policies, as advocated by Paul Krugman, will also fail. Lewitt
warns of dangers in ETFs and offers his investment recommendations.
Marketing
strategies differ depending on the structure of a firm, writes
Kristen Luke. Solos and silos focus
on marketing the individual advisor while ensembles market the
firm. Ensembles also tend to have more sophisticated marketing
campaigns since they generally have larger marketing budgets and
higher revenue streams.
Our
primary client base, baby-boomers, is quickly sliding into retirement,
leaving us to question where our growth will come from. And now we
have the uncertainty surrounding the Dodd-Frank Wall Street Reform and Consumer
Protection Act and the anxiety that comes with
it. Financial
advisors can choose to see the convergence of these factors as a
threat to their well-being or as an opportunity to prosper.
In this letter
to the Editor, a reader responds to our article, The Misguided
Promise of 529 Plans, which appeared last
week. We were wrong, the reader says, to compare 529 plan
performance to the 'market,' and solutions superior to our
recommended zero-coupon muni bond strategy are available through
actively-managed equity funds.
Lastly, we
highlight the most popular submissions to Market Commentaries.
We welcome guest
submissions from our readers. For more information, here
are our guidelines.
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Do Past
10-Year Returns Forecast Future 10-Year Returns?
Is Warren
Buffett Correct on this One?; I Love Gold, But...