SA For FAs

The lack of clarity as to the Fed’s next step leaves investors flummoxed as to whether they should seek out risk or take a more defensive approach. This podcast (4:49) argues that the Fed doesn’t call all of the shots; it is tangoing with the market, and investors’ requirements for feeling secure about taking risks seem to be rising. Expect another rate cut this year, but don’t assume the Fed can forever maintain an expanding market.Learn more about your ad choices. Visit megaphone.fm/adchoices

Ronald Surz compares aggressive vs defensive approaches to target-date funds over the past 12 years. That period’s historic bull market favored aggressive TDFs, as we’d expect, but the real news is that the defensive portfolio continued to outperform for seven years, from 2007 to 2013. This podcast (4:30) suggests that it is calamitous to measure an individual retirement on the basis of broad-based population statistics. For the real retirees who began their portfolio withdrawals during the years 2007 to 2013, a defensive approach was a lifesaver.Learn more about your ad choices. Visit megaphone.fm/adchoices

I thought it would be an excellent occasion to introduce you to another Seeking Alpha podcast, called Behind the Idea. My esteemed colleagues Mike Taylor and Daniel Shvartsmann, both super-duper-smart financial wonks, lift the hood of various investing theses every week, with wit and wisdom. This week, they’re doing you the favor of doing your summertime reading for you, reviewing Joel Greenblatt’s “You Can Be A Stock Market Genius,” which is terrific, as I am a fan of value investing  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today I introduce you to another Seeking Alpha podcast, called Behind the Idea. My esteemed colleagues Mike Taylor and Daniel Shvartsmann, both super-duper-smart financial wonks, lift the hood of various investing theses every week, with wit and wisdom. This week, they’re doing you the favor of doing your summertime reading for you, reviewing Joel Greenblatt’s “You Can Be A Stock Market Genius.” Learn more about your ad choices. Visit megaphone.fm/adchoices

Citing statistics showing the top 5% of Japanese savers do only slightly better than the bottom 5% of U.S. investors, AllianceBernstein suggests that excessive conservatism is the greater risk.This podcast (4:39) argues that aggressive vs. conservative is a false dichotomy, that it’s the investing process that matters. Indeed, being aggressive and conservative at the same time can help investors achieve their goals with less anguish along the way.Learn more about your ad choices. Visit megaphone.fm/adchoices

My search for investments that could stand up to a bear market continues, and has led me to Israel Chemicals (ICL), a boring but cheap conglomerate. The company reported substantial year-over-year gains at the start of this year, but its stock’s share price has fallen substantially since then. This podcast (7:55) conjectures that the market may be typecasting ICL as a potash company. Yet ICL is more profitable, more diversified and offers greater value-add than some of its peers.Learn more about your ad choices. Visit megaphone.fm/adchoices

The University of Illinois astutely took out an insurance policy against a declining population of Chinese students before the U.S.-China trade war reached its current dangerous level. The unique contract it fashioned with Lloyd’s of London strikes me as akin to a disability income policy. This podcast (6:06) suggests that advisors must know what kind of insurance is essential for their clients (like a disability policy), but above all, must make sure their clients understand that their advisor is their insurance.Learn more about your ad choices. Visit megaphone.fm/adchoices

Today’s anniversary of 9/11, and the discovery of a van loaded with gasoline under the T. Rowe Price offices earlier this week, occasions a “fire drill” of sorts. This podcast (5:24) suggests that advisors will eventually be faced with clients who are doubtful about the future and looking for assurances, i.e., predictions, that advisors cannot give. But what advisors can truthfully tell clients is that it’s unrealistic to live your life assuming a turn for the worse will never turn back. They can also remind clients that few people were “in the mood” to invest back in March of 2009.Learn more about your ad choices. Visit megaphone.fm/adchoices

In periods of turbulence, like Q4 of last year, did your clients despair or did they remain calm? Achieving the latter should be a benchmark for being an effective advisor. This podcast (3:55) argues that client education and behaviorally sensitive wealth management can change a vicious cycle into a virtuous one.Learn more about your ad choices. Visit megaphone.fm/adchoices

Financial Advisor magazine published an interview with “Big Short” hero Michael Burry, who made a fortune shorting collateralized debt obligations. Today’s index funds remind Burry of yesterday’s CDOs. In contrast, he likes Japanese small-caps. This podcast (5:13) argues that exiting investment theses from famous investors require extra scrutiny. We find reason to be wary of both of his theses. But even if they have some merit, big shorts and exotic investments are suited to money managers like Burry, not to advisors managing the assets of ordinary investors.Learn more about your ad choices. Visit megaphone.fm/adchoices

UBS investment strategist Michael Crook has helped fashion a quasi-endowment approach for UBS clients that aims to help them achieve their goals without markets getting the better of them. In this podcast interview (25:20), he explains how UBS’s “3L” strategy – liquidity, longevity, legacy – offers a reality-based methodology for coping with market challenges on the path toward a secure retirement.Learn more about your ad choices. Visit megaphone.fm/adchoices

I recently went shopping for an investment I thought could hold up during a bear market. This podcast (8:47) describes my adventures looking at ETFs and individual stocks, particularly my unexpected fascination with the Invesco DWA Consumer Staples Momentum ETF (PSL), but my ultimate choice of Molson Coors Brewing Company (TAP).Learn more about your ad choices. Visit megaphone.fm/adchoices

Ever wonder why financial literacy programs fall flat, when the content is so basic? What’s missing is not the intellect needed to understand debt management. This podcast (5:51) suggests that something more basic is at play. Young people need to know that they matter; that their actions, even if very small, are consequential. If they’ve gotten that one down, then they can handle retirement investing. Financial advisors are uniquely positioned to demonstrate this point.Learn more about your ad choices. Visit megaphone.fm/adchoices

Ray Dalio argues that the market experiences paradigm shifts that roughly conform to each new decade and whose typical dominant characteristic tends to be opposite of the decade preceding it. This podcast (7:12) outlines Dalio’s arguments, and adds my own, particularly in support of gold, in anticipation of inflation and in identifying a corner of the stock market that may offer greater stability in what could be a challenging decade for equities.Learn more about your ad choices. Visit megaphone.fm/adchoices

Fortune dubs Schwab’s new advisory offering, consisting of robo-allocation and unlimited access to a CFP, as a Netflix-style subscription model. It’s low-priced and attracting assets, but is it the right approach? This podcast (5:27) suggests that what is primarily at issue in the choice between a low-cost subscription service and higher-cost, more customized advice is a consumer choice between convenience and commitment.Learn more about your ad choices. Visit megaphone.fm/adchoices

Mexico appears third from last in Seeking Alpha’s list of country ETFs over the past year, above Nigeria and Pakistan, and may be ripe for an upward rotation. Mexico appears to working with the U.S. more effectively than other countries today, and while not cheap on a valuation basis, it is at about half the level of U.S. stocks. This podcast (6:39) argues that it’s fair to expect a volatile series of dips in Mexican stocks over the next year, amidst U.S. elections. A post-election reassertion of U.S.-Mexican commercial ties could make those dips buying opportunities.Learn more about your ad choices. Visit megaphone.fm/adchoices

In her podcast and Forbes column, Teresa Ghilarducci discusses what she calls “retirement shame,” the blame people cast upon themselves for failing to have saved enough for retirement, offering two vivid real-life examples. This podcast (5:06) suggests that contemporary society, specifically its urbanized and materialistic setting, makes it harder to prosper economically. Clarity on this issue can help advisors re-instill the value of saving.Learn more about your ad choices. Visit megaphone.fm/adchoices

The pleasure of making money is really a byproduct of seeking and achieving an investor’s portfolio objectives, but be warned: the pleasure-seekers are also the pain-fleers. This podcast (4:59) contrasts three types of investors – “growth-oriented investors,” “stagnators” and “losers.”Learn more about your ad choices. Visit megaphone.fm/adchoices

UBS’s new “Bear Market Damage Index” puts hard numbers onto a very real problem — sequence of returns in retirement. UBS postulated a bear market that took 74 months to return to its former high. This podcast (5:45) reports UBS’s calculation that a liquidity strategy keyed to this worst of worst case scenarios did far better than a 100% equity strategy. These numbers should be of interest to anyone who thinks the next bear market might be a big one, and may also suggest a longer liquidity window than most advisors budget for.Learn more about your ad choices. Visit megaphone.fm/adchoices

The quest for income is becoming as salient a concern as it was during the financial crisis of a decade ago. This podcast (5:43) looks at the example of highly sophisticated income-dependent investors – insurance companies – and finds no magical solutions to the quest for yield. We lay out approaches on two sides of the risk spectrum, and find that you must risk something to obtain a yield. There are, however, two other solutions that are sure to boost yield, if the client is willing to do the heavy lifting.Learn more about your ad choices. Visit megaphone.fm/adchoices