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November 8, 2011 - Vol 5 Issue 45 
Dear Reader, Last chance to join us for a webinar, "How Outsourcing Drives Growth," on November 9th at 4pm ET to hear from two seasoned financial advisors on their experiences and their ability to drive growth by outsourcing. Register here. 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 use the "Safe Unsubscribe" option at the end of this email.  
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 Bill Gross' Revised Paradigm: The New Normal Minus
By Robert Huebscher
Following the financial crisis of 2008, PIMCO articulated its 'new normal' forecast of slow growth and mediocre capital market returns. Appending the even drearier modifier 'minus' to that outlook, Bill Gross said that expectations now appear worse than even he previously feared. Gross was pessimistic in both the near and long terms, and he startled the audience with his premonition that 'capitalism is at risk.'
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How to Attract HNW Clients by Adhering to the Fiduciary
Standard
Sponsored Content by ByAllAccounts
Adopting the fiduciary standard as a way of doing business reinforces your role as a trusted advisor and sets you apart from the competition. It also enables you to move your business to the next level where you can develop a broader and deeper relationship and attract more HNW clients.
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An International Perspective on Safe Withdrawal Rates
By Wade Pfau
Prospective retirees must consider whether they are comfortable basing retirement decisions on the impressive but perhaps anomalous numbers found in historical US data. What has been safe for US retirees in the past has been far less secure for their foreign counterparts.
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Politics, Taxes and the Markets
By Robert Huebscher
One of the most engaging speakers at last week's Schwab IMPACT conference was Andy Friedman, who offered some provocative predictions about next year's elections and what we can expect from the deficit super committee.
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A Unique Way to Help Clients Close the Retirement Gap
By Dan Richards
Clients facing a shortfall in retirement savings can bridge that gap in many ways. But one technique is often neglected: spending reductions - even small ones - in their everyday lives. A new web site gives clients the tools to quantify and manage those reductions.
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Is One Better than Three?
By David B. Loeper, CIMA, CIMC
One way to 'juice' a portfolio is by increasing allocations to small- and mid-caps, as one recently published paper contends. But a careful analysis - properly adjusting for risk - shows how that seemingly appealing approach can destroy client wealth.
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Letter to the Editor
A reader responds to Michael Edesess' article, The Small Cap Falsehood, which appeared last week.
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Our Most Read Article from Last Week:
The Small Cap Falsehood
By Michael Edesess
The supposed outperformance of small cap stocks is a foundational precept on which many respected asset managers have staked their expertise over the years - foremost among them, Dimensional Fund Advisors. A growing body of research, however, shows no such advantage for the last 30 years and, now, a new study seems to have proven that the supposed small-cap advantage may have never existed in the first place.
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Highlights from Market Commentaries
Below are the three most widely read commentaries during the last week:
 Follow the Cycle
It remains a mystery to us as to why investors believe each cycle is different from other cycles. The title of a very popular book right now is "This Time is Different" Some cycles are stronger and some are weaker, and some cycles last longer than others. However the investment implications at different points in the cycle remain remarkably consistent. With the exception of bubbles, we have yet to come across a truly 'different' investment cycle. Most important, the typical rotations within the global financial markets are following their normal pattern even during the current cycle.
Follow the Cycle by Richard Bernstein of Richard Bernstein Advisors
 Could America Turn Out Worse than Japan?
There was a time when America looked down on Japan for the latters inability to deal with its economic problems. No more. Like Japan, America is now realizing how difficult a post bubble economy can be. The fear is that it will also find out that that it lacks some of Japans attributes needed to cope with long years of economic stagnation. The US has no time to waste to build on the important, albeit small progress that has been made in recent weeks. If it does not, there is a risk that the countrys economic fate could end up being even worse than what Japan has experienced.
Tags: US Japan
Could America Turn Out Worse than Japan? by Mohamed A. El-Erian of PIMCO
Whipsaw Traps
Current market conditions cluster among a set of historical observations that might best be characterized as a "whipsaw trap." Though last week's rally triggered several widely-followed trend-following signals, the broader ensemble of data suggests a high likelihood of a failed rally. In this particular bucket of historical observations, less than 30% of them enjoyed an upside follow-through over the next 6 weeks. So while the expected return/risk profile of the market remains negative here, we have to be somewhat more tentative about taking a "hard" defensive position.
Tags: US Europe Sovereign Debt Investment Themes
Whipsaw Traps by John P. Hussman of Hussman Funds
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