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BlackRock: ‘Investors Should Buckle Up For More Volatility Ahead’ (BlackRock Blog)
“…The tragic downing of a Malaysian civilian airliner over Ukraine and worsening conflict in the Middle East sparked a market rout on Thursday that brought an unusually quiet period for financial markets to an end,” Russ Koesterich at BlackRock writes in a new piece. Now he thinks “investors should buckle up for more volatility ahead.”
Koesterich points out that stock market volatility is still 25% below its long-term average. “Low volatility suggests markets are complacent and not taking into account the prospect of bad news. Indeed, there is no shortage of potential triggers for more turbulence ahead.” The possible triggers for more volatility include rising geopolitical tensions in Ukraine, ground war between Israel and Hamas in Gaza, tensions in Iraq, and an early rate hike from the U.S. Federal Reserve.
How Advisors Can Make The Best Use Of Twitter (The Wall Street Journal)
It’s becoming more apparent that advisors need to use social-media platforms like Twitter. But to truly exploit these platforms, advisors need to realise that “clients are more interested in human-interest stories,” writes Catherine Valega, owner of Green Bridge Wealth Management, in a WSJ column. “Tweets about financial markets will only get retweeted by industry cohorts,” she writes. Instead she thinks advisors should use Twitter to give existing and potential clients a sense of who they are through tweets about personal experiences or those of clients.
$200 Million Advisor Pair Leave Wells Fargo For Raymond James (Financial Planning)
Christopher Fluehr and Jason Mamalis have left Wells Fargo, where they managed over $US200 million in client assets and had over $US1 million in production, for Raymond James, reports Maddy Perkins at Financial Planning. Raymond James has been recruiting aggressively. “On July 17, it picked up an advisor duo from UBS managing $US100 million in assets. Raymond James also reeled in a UBS advisor team managing over $US575 million in assets on July 10,” reports Perkins.
GRANTHAM: Here Are 5 Lessons I Learned From 2 Failed Investments (Business Insider)
In his latest GMO quarterly letter, Jeremy Grantham highlighted the five key lessons he learned as a novice investor. These lessons emerged from two early failed investments, first, was American Raceways, a company looking to bring Formula 1 Grand Prix to the U.S.. Next was Market Monitor Data Systems which was “going to put a “Monitor,” an electronic screen, on every broker’s desk, so that they could trade in options, making their own market,” but ultimately ended up being “way ahead of its time.” Here they are verbatim:
1. You can’t know how people who are important to you will behave under pressure. And if you have to pick one who will outperform, pick your wife.
2. Local cultural differences can be very enduring even between Britain and the U.S. Formula 1 is trying again in the U.S. as I write, 46 years later. Soccer here has also been just around the corner for 50 years.
3. Sometimes even a great idea will fail, like Market Monitor, because the technology infrastructure is just not there; that it is simply ahead of its time.
4. Much more importantly, investing is serious. It can and often is intellectually compelling. But it should not be driven by excitement, as it is for many individuals, and when treated that way will almost always end badly. My experience with American Raceways and Market Monitor and, more important, my experience at painfully wiping out myself and my wife financially did far more than teach or reteach some of the basic rules of investing. It turned me profoundly away from the speculative and gambling possibilities of investing and turned me permanently, and pretty much overnight, into a patient, long-term value investor. Luckily, the new lifestyle fitted nicely with my nature conservative and frugal upbringing. The value perspective is pretty much baked into the Yorkshire culture. Happily, it also seems to work most of the time. Rolling the dice, however, was appropriate, it seems, when applied to the question of whether or not to start a new investment firm, for the period 1970 to about 1990 was particularly favourable to the start-up of new, small firms. For a while then, institutional investors actually seemed to prefer start-ups to the giant banks, which dominated the business but that had done so badly in the 1974 decline. And my willingness to take the risk of a start-up had been strongly influenced by the very brief existence of my substantial nest egg. So, once again…
5. It is better to be lucky than good, but of course appropriate to aspire to both.
The 5 Key Areas Of Responsibility Among Advisors (Financial Planning Association)
When it comes to advisors’ role and responsibilities, the 2014 FPA Time Management and Productivity Study found that there are five main roles on a team. And the advisors played one or all of them. “As they hire, they are likely to start hiring for the role at the bottom of the list, moving upward to take increasingly more activities off the adviser’s plate,” the study found.
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