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Jun 1, 2006 10:16 pm

I am actually tying this question directly into the thread that was created a few months ago...the title being "The Markets look great, again.." or something along those lines; regardless I wanted to post new in hopes of attracting a lot of readers.


If you read that thread, there is lengthy discussion of investment strategies in the current marketplace.  I read each opinion carefully, and was hoping some of you "active" trading advisors might offer an outlook on my opinion.  It seems like a lot of the strategies you are suggesting in this thread involve a lot of market timing techniques, manipulating the weight within various asset classes at various times based on different secular/cyclical bear/bull market theories, technical analysis, stock analysis, etc. etc. etc.  Bottom line is, to me, this all seems a little unnecessary.  Of course I am not criticizing anybody, in fact I am looking to continually learn and develop myself.  But to me, investing money (which should always be a long-term commitment aside from any speculation) is relatively simple.  Keep expenses low, monitor your funds for performance relative to peers, rebalance regularly and most important, asset allocation. 


I read a couple of "knocks" on the "60/40" mix, and I am assuming this was a stab at asset allocation in general, not necessarily just the "moderate" investment profile.  I personally preach asset allocation as a top determinant in investment performance, being the most consistent and proven way over time to minimize downside risk while capturing a solid amount of upside and limiting overall volatility.  Of course the upside capture depends on the allocation model; however the same theme of less downside relative to more upside remains true across all models.  That being said, if you are doing these things consistently, and you stick to your core strategy through bull and bear, your investments should perform accordingly.


I would really like to hear from of the more experienced guys on this.  I am guessing a lof of you "active" managers are more old school, and probably can counter what I have said above.  Reality is I am so busy gathering assets and maintaining relationships that I would be doing all of my clients a huge disservice (is that a word?) by attempting to try and play the trends of the market. 


It is working......I am in a bank (no bank haters please, I take a STRONG advisory approach to my business with a wirehouse background and I am in an excellent bank program) and I am annuitizing over 500k every month on average...but I still always want to learn from the veterans.  I am looking forward to your responses.  FYI I have been in the business 3 years, 26 years old.

Jun 2, 2006 6:57 am

Do both.  Asset Allocation, assuming rebalancing is in place and
enough are's are covered, has always worked and will continue to do
so.  However, when the markets get flat or challenged, a more
tactical approach can be pretty effective.  Here you can take a
smaller portion of a clients portfolio, sat 10-20 percent, and run
specific tactical strategies (Sector rotation, Sector concentration,
Geographic rotation/conentration, various equity strategies (earnings
chasing, dividend chasing, high quality, low quality, free cash flow to
p/e, the list can go on and on).  Last year our Asset Allocation
portfolios ran around 6% while 4 of our Tactical portfolios were north
of 20%.  So far this year, we have 2 of our Tacticals down over
5%, our Asset Allocations models are flat to up 4%, and we have 2
tacticals up around 8-10%.  I have yet to see everything down big
in a review cycle (quarterly), so there is always something interesting
to focus on.



We are very careful and spend a considerable amount of time on these
tactical portfolios...but they are where we get pretty much all of our
new business and referrals.  We run them in discretionary accounts
where we I am the portfolio manager.

Jun 2, 2006 9:41 am

This is some boring stuff. No wonder you guys work in banks. Real clients would fall asleep listening to you. If you're talking about asset allocation, you're boring them with the same stuff that every other broker has been boring them with.


Find something interesting to talk about and you will get business.

Jun 2, 2006 11:15 am

Nasal spray, you obviously have zero clue what is going on.  My thread has nothing to do with an inability to get business.  If you read what I wrote, I am annuitizing on average 500k per month, my GDC in my second year over 350,000.  I am increasing my business 30% a year.  At the present rate I will be producing 1million GDC by age 35 (I am 26).  Get a clue or get out of the forum.


Rightway - I appreciate the insight.  I do, in fact, practice some of these things.  I like the idea of presenting a "tactical" portion of the portfolio.  I always refer to these as "satellite" strategies with my clients, used to build around the core strategy which is generally 70-80% of the portfolio.  My satellites as of late have included some India UIT's, Energy Sector Plays, and some Technology. 

Jun 4, 2006 9:13 pm

Actually having some knowledge about complex strategies, along with the
ability to communicate them in an understandable manner is a very good
sales tool. 



You want to talk about old hat broker stuff?  All of the played
out analagies like "do you ask your doctor for a break in prices",
"Would you manage a baseball team with only 4 players?", "You never
travel in just 1 lane on the freeway", "There are many ingerdients in a
good meal...", "would you cut your own hair, operate on yourself, fix
your own plumbing problems?", "do you ever as about the mark-up's at
Lord and Taylor".



Prospects have been listening to these for ever.  Not that story
telling is not the key to this business, but it needs to be taken to
another level to be a hitter.

Jun 5, 2006 9:18 am
rightway:

Actually having some knowledge about complex strategies, along with the ability to communicate them in an understandable manner is a very good sales tool. 

You want to talk about old hat broker stuff?  All of the played out analagies like "do you ask your doctor for a break in prices", "Would you manage a baseball team with only 4 players?", "You never travel in just 1 lane on the freeway", "There are many ingerdients in a good meal...", "would you cut your own hair, operate on yourself, fix your own plumbing problems?", "do you ever as about the mark-up's at Lord and Taylor".

Prospects have been listening to these for ever.  Not that story telling is not the key to this business, but it needs to be taken to another level to be a hitter.


When you get on an airplane, do you want the pilot to put you to sleep explaining how to fly an airplane or are you more interested in what movie will be shown?


People don't make financial decisions logically. They make them emotionally. Dig for pain, uncover the problem, sell to the problem. What you two are doing is amateur hour.

Jun 5, 2006 12:48 pm
nasal spray:
rightway:

Actually having some knowledge about complex strategies, along with the ability to communicate them in an understandable manner is a very good sales tool. 

You want to talk about old hat broker stuff?  All of the played out analagies like "do you ask your doctor for a break in prices", "Would you manage a baseball team with only 4 players?", "You never travel in just 1 lane on the freeway", "There are many ingerdients in a good meal...", "would you cut your own hair, operate on yourself, fix your own plumbing problems?", "do you ever as about the mark-up's at Lord and Taylor".

Prospects have been listening to these for ever.  Not that story telling is not the key to this business, but it needs to be taken to another level to be a hitter.


When you get on an airplane, do you want the pilot to put you to sleep explaining how to fly an airplane or are you more interested in what movie will be shown?


People don't make financial decisions logically. They make them emotionally. Dig for pain, uncover the problem, sell to the problem. What you two are doing is amateur hour.



OMG.  Dig for pain???  Uncover and sell to the problem???  Wow, that is some groundbreaking stuff.  You really are on the cutting edge of this business aren't you?   


Do you have ANYTHING to offer that ISN'T amateur hour?? 


Jun 5, 2006 6:43 pm
BankFC:
nasal spray:
rightway:

Actually having some knowledge about complex strategies, along with the ability to communicate them in an understandable manner is a very good sales tool. 

You want to talk about old hat broker stuff?  All of the played out analagies like "do you ask your doctor for a break in prices", "Would you manage a baseball team with only 4 players?", "You never travel in just 1 lane on the freeway", "There are many ingerdients in a good meal...", "would you cut your own hair, operate on yourself, fix your own plumbing problems?", "do you ever as about the mark-up's at Lord and Taylor".

Prospects have been listening to these for ever.  Not that story telling is not the key to this business, but it needs to be taken to another level to be a hitter.


When you get on an airplane, do you want the pilot to put you to sleep explaining how to fly an airplane or are you more interested in what movie will be shown?


People don't make financial decisions logically. They make them emotionally. Dig for pain, uncover the problem, sell to the problem. What you two are doing is amateur hour.



OMG.  Dig for pain???  Uncover and sell to the problem???  Wow, that is some groundbreaking stuff.  You really are on the cutting edge of this business aren't you?   


Do you have ANYTHING to offer that ISN'T amateur hour?? 




Yes, I do. My 1099's.

Jun 5, 2006 7:20 pm

Why does it always end in hate?  This thread could be a really great learning experience for those of us who need to learn from our veteran peers. 


Bankwannabe, great points at the top. Rightway, excellent insight as well.  Nasal, selling pain is good too. 


Asset allocation is the answer to some people's pain.  Smooth out the ride.  I love the idea of using a percentage to play strategically.

Jun 5, 2006 9:17 pm
nasal spray:
rightway:

Actually having some knowledge
about complex strategies, along with the ability to communicate them in
an understandable manner is a very good sales tool. 

You
want to talk about old hat broker stuff?  All of the played out
analagies like "do you ask your doctor for a break in prices", "Would
you manage a baseball team with only 4 players?", "You never travel in
just 1 lane on the freeway", "There are many ingerdients in a good
meal...", "would you cut your own hair, operate on yourself, fix your
own plumbing problems?", "do you ever as about the mark-up's at Lord
and Taylor".

Prospects have been listening to these for
ever.  Not that story telling is not the key to this business, but
it needs to be taken to another level to be a hitter.


When you get on an airplane, do you want the pilot to put you to
sleep explaining how to fly an airplane or are you more interested in
what movie will be shown?


People don't make financial decisions logically. They make them
emotionally. Dig for pain, uncover the problem, sell to the problem.
What you two are doing is amateur hour.





I will keep that in mind.  And to think all these years I have
been doing it wrong.  Thanks for showing me the light nasal. 




When I tell my client to go ahead and exercise his stock options and
this throws him into horific AMT problem I will tell him your airplane
story...that will make it all better...dig for the pain man! 

Jun 5, 2006 9:36 pm
rightway:
nasal spray:
rightway:

Actually having some knowledge about complex strategies, along with the ability to communicate them in an understandable manner is a very good sales tool. 

You want to talk about old hat broker stuff?  All of the played out analagies like "do you ask your doctor for a break in prices", "Would you manage a baseball team with only 4 players?", "You never travel in just 1 lane on the freeway", "There are many ingerdients in a good meal...", "would you cut your own hair, operate on yourself, fix your own plumbing problems?", "do you ever as about the mark-up's at Lord and Taylor".

Prospects have been listening to these for ever.  Not that story telling is not the key to this business, but it needs to be taken to another level to be a hitter.


When you get on an airplane, do you want the pilot to put you to sleep explaining how to fly an airplane or are you more interested in what movie will be shown?


People don't make financial decisions logically. They make them emotionally. Dig for pain, uncover the problem, sell to the problem. What you two are doing is amateur hour.




I will keep that in mind.  And to think all these years I have been doing it wrong.  Thanks for showing me the light nasal. 

When I tell my client to go ahead and exercise his stock options and this throws him into horific AMT problem I will tell him your airplane story...that will make it all better...dig for the pain man! 


Asspuppet, I'm talking about getting a new client and you're talking about working with an existing client. If you STILL have to sell to your clients, you're a homo.

Jun 5, 2006 9:38 pm

I am sure everyone will agree with you...I stand humbled.