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The Key Concerns Among Vanguard Clients (Vanguard)
Joe Davis, chief economist at Vanguard Investment Strategy Group, says the two key client concerns center on the outlook for stocks and duration risk when it comes to fixed income. “So we’ve seen a very significant performance in the United States,” says Davis on the U.S. equity market. “It’s generally been consistent with our outlook even several years ago, returns have significantly outperformed bonds. But then the key question is, are we overvalued or so forth? …You know, we still remain optimistic on the equity market but we find ourselves stressing the importance of rebalancing overseas, where if anything the valuations at the margin are a little bit more compelling than the U.S.”
“In the fixed income side the, either shedding duration risk and getting much shorter portfolios, should I have bonds at all,” Davis said.
BlackRock chairman Larry Fink said financial advisors need to shift their clients’ focus away from news that impacts stocks in the short-term to their long-term investment goals, reports Ted Knutson at FA Mag. “The human condition focuses on the moment. We as an industry have to stop focusing on the moment,” Fink said. He is also thinking about whether advisors should look beyond just their fiduciary duty and returns for clients, to the impact that these investments have on the clients’ home countries.
The Demand For Gold Is Going Nowhere (The World Gold Council)
Gold prices fell 30% in 2013. Q1 data from the latest World Gold Council report shows that gold demand was steady at 1,074.5 tonnes. From the report: “Jewellery demand made moderate gains of 3% largely due to lower gold prices compared with Q1 2013 and seasonal factors, notably Chinese New Year, which contributed to record first-quarter jewellery demand in China. Movements within the investment space were more striking: net ETF flows were zero, compared with 177t of outflows in Q1 2013, while bar and coin investment unsurprisingly fell far short (-39%) of the record levels of demand seen a year ago. The net impact on Q1 investment demand was minimal: it was down by just 6t (2%) year-on-year.”
International Investors Like The Canadian Corporate Landscape (Gluskin Sheff)
International investors seem to like the Canadian corporate landscape, writes Gluskin Sheff’s David Rosenberg. “Foreign investors reduced their holdings of Canadian securities by $US1.2 billion in March, to mark the first monthly divestment so far this year and only the second in the last nine month,” according to Rosenberg. “…Government bond holdings also declined in March but this was offset by foreign investment in Canadian corporate bonds to keep net flows into Canadian bonds in the plus column in the month.”
“The strong investment into Canadian corporate bonds and equities represents the international investor base holding constructive views of the Canadian corporate landscape with the weaker Canadian dollar provid[ing] a boost to domestic profit prospects, while the ongoing foreign divestment of government bond holdings is consistent with the vanishing yield premium on these debt securities as the BoC continues to remain stuck in neutral.”
Wells Fargo Advisors Join Raymond James (The Wall Street Journal)
Robert J. Wood, Carlton Brown, and Robert J. Wood Jr. have left Wells Fargo to join Raymond James Private Client Group, reports Corrie Driebusch at the WSJ. The trio together generated $US2 million a year in fees and commissions at Wells Fargo.
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