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Wealth Managers Are Setting Up Shop In Silicon Valley (Financial Planning)
Silicon Valley’s tech fortunes have attracted the attentions of one of the world’s largest independent wealth managers, the London-based deVere Group. That group has over $US10 billion in assets, 80,000 clients, and offices in 50 countries.
They just opened a new San Francisco office, and are planning on expanding to Silicon Valley, Seattle and San Diego within the year.
“This is a boom time for these markets,” said Adrian Flambard, deVere’s area manager in San Francisco. “We were impressed by the variety of industries that are on the US West Coast and the fact that you have both some of the largest corporations in the world here as well as a large number of start-ups and entrepreneurs.”
So far deVere has 1,400 clients in the US with over $US100 million in assets under management, Charles Paikert reports. And they’re hoping to greatly expand those numbers on the West Coast.
The US dollar surged more than 6.5% against other currencies in recent months because of “prospects of strong US economic growth and rising interest rates relative to most other major development markets,” according to Charles Schwab’s Kathy Jones.
The stronger US dollar “helps keeps inflation down by reducing the cost of imported goods, and also makes US markets more attractive to foreign investors,” Jones writes.
So that means that investors who hold foreign bonds may want to adjust their portfolios. Because of the US dollar, foreign bonds will see increased risk and will also have the “possibility” of lower return.
On the flip side, “a domestic bond portfolio may benefit from a stronger dollar because it helps hold down inflation and boost foreign investment in the US bond market.”
Last Week’s Sell Off Suggests That Volatility Is On The Rise (BlackRock Blog)
There’s was “no significant or obvious catalyst for the sell-off” last week, but it appears to “have been a case of lingering geopolitical risks running into market complacency and some stretched valuations,” according to BlackRock’s Russ Koesterich.
The recent sell-off does signify two things about the markets. First, that volatility is the on the rise. Although volatility is still low by historical standards — the VIX peaked around 16, “still 20% below the long-term average” — but the anticipated rate hike and “slightly less benign” credit conditions will likely change that soon.
And secondly, “valuations are likely to matter more as markets become less driven by momentum. While equities in general have been struggling since the S&P 500 Index first crossed the 2,000 threshold in late August, various market segments are behaving differently. In a sign that investors are paying closer attention to the importance of relative value, segments that still appear to be relative bargains are outperforming those with more expensive valuations,” writes Koesterich.
Lots of US companies have recently announced plans to merge with international firms. Many companies do this in order to lower their taxes — think Burger King’s union with Canada’s Tim Hortons. Although, it’s important to note that the company must still pay taxes on all products sold in the US.
An inverted company’s lower taxes means higher after-tax earnings. Consequently, many investors automatically think that it’s a great idea to invest in these inverted companies.
However, the problem is that because companies merged for the wrong reasons (namely, taxes — rather than because its the best choice for the company) it may actually be a bad idea to invest in these companies. “A recent study that looks at all inverted companies for the past 30 years found that half outperformed the market and half underperformed.”
Advisors Shouldn’t Blog About Investing If They Want To Attract Clients (Advisor Perspectives)
“Many advisors have embraced the idea that blogging should be part of their marketing strategy. Yet they often struggle to come up with new ideas for blog posts. After all, how many times can you talk about 401(k)s, retirement planning and diversification? There’s a lot to say about such worthy topics, but after a while, you could feel like you’re repeating yourself. Worse, your audience may feel the same way and tune out,” writes Megan Elliott.
Although many advisors want to blog in order to market themselves or build a reputation, blogging only about investing often drives away clients because they get bored. Instead, investors should use the blogging medium to write about the clients’ interests, Elliot suggests.
That way, you can make connections with your clients and they will feel like they can trust you. “Maybe a movie you just saw has lessons that could help people better prepare for retirement. Perhaps you can make a connection between last week’s big game and how you manage money for clients,” Elliot suggests.
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