How long will the correction last?

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Jun 15, 2006 1:41 am

[quote=RedJacobs]3) Money coming out of Housing, Emerging markets and Global markets that have had a great run,where is it going to go? [/quote]

I agree 100% with you about housing and global markets but I think that emerging markets will continue to be a good place to stay...at least for part of the portfolio.

I see a good trend continuing in value.  Growth should be good but I'm unsure how good.

Jun 15, 2006 1:53 am

[quote=scrim67]

Indy,

I spoke to a wholesaler of a VA today.

He mentioned his product is simple.

They will give my client their entire principal back in five years if it's less than the original amount invested.

I was thinking that sounds like a pretty good deal until he mentioned that it must be a 60/40 allocation.

I thought the whole idea was you could be aggressive?

A 60/40 model is hardly aggressive.

scrim

[/quote]

Every annuity has its quirks - some require you to use a model, some don't, but put a cap on the amount of gains, some only ratchet up on a yearly basis, while others ratchet up quarterly, and they all play with the annuitization rates. 

The reality is that the majority of people that purchase an annuity won't need the guarantees that it can provide - if that weren't true, the insurance company would go bankrupt.  That doesn't mean the client shouldn't have put their money in an annuity, because only hindsight will tell who is in the majority, and some people won't invest without the guarantee.  But it does mean, in my opinion, that you choose the annuity with the best investments and the lowest costs.  For the majority of your clients, the guarantees are only window dressing, and it will be the actual account value that matters.

Jun 15, 2006 3:44 am

When you post how do you cut and paste what others have said before you.

I can't figure this out

Jun 15, 2006 11:30 am

[quote=scrim67]

When you post how do you cut and paste what others have said before you.

I can't figure this out

[/quote]

Hit the "quote" button.

Jun 15, 2006 2:51 pm

[quote=bankrep1]

Revealer,

Bill gross is constantly bearish, he said the DOW would fall to 6500 3 years ago when it was at like 9000 remember that and alls it has doen is go up.  He just tries to scare everyone into what? BONDS hmmmmm....

[/quote]

I agree completely. Gross's "market calls" alays have the bottomline that the equity markets are about to collapse, credit ratings are vastly overstated on the bullish side and that he's not being paid enough to hold debt. IOW, he spends every second of any period he's on the air jawboning on bonds...

Jun 15, 2006 3:01 pm

[quote=Revealer] You forgot Buffett and Rodriquez. They always bearish, too? ....... Point is, I am usually suspicious when someone tells me that they have this "method" to beat these GREAT minds.[/quote]

1) I can't speak about Rodriquez, but both Warren and Gross are usually on the bearish side and have been for as far as I can recall. I guess it comes from their respective  perspectives, Warren with traditional value and Gross as a bond guy.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

2) I think you're right to be suspicious of any "system", OTOH, I think you're equally right to remember that Warren and Gross have both been far less than "genius" during various market cycles.

That's no slam on them, it's simply that their investing styles goes in an out of favor. When they're "hot" they're "genius", when they're not, the same voices wonder aloud how they lost their way. I respect how they stick to their respective philosophies and strengths regardless of the market cycle we're in, but I think it’s key to keep in mind they’re never fools NOR omnipotent, they’re simply very good at their respective styles of investing, which go in and out of favor with market cycles.

Jun 15, 2006 6:13 pm

[quote=lawsucks][quote=scrim67]

When you post how do you cut and paste what others have said before you.

I can't figure this out

[/quote]

Hit the "quote" button.

[/quote]

Thanks!

Jun 15, 2006 7:41 pm

[quote=mikebutler222]

[quote=Revealer] You forgot Buffett and Rodriquez. They always bearish, too? ....... Point is, I am usually suspicious when someone tells me that they have this "method" to beat these GREAT minds.[/quote]

1) I can't speak about Rodriquez, but both Warren and Gross are usually on the bearish side and have been for as far as I can recall. I guess it comes from their respective  perspectives, Warren with traditional value and Gross as a bond guy.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

2) I think you're right to be suspicious of any "system", OTOH, I think you're equally right to remember that Warren and Gross have both been far less than "genius" during various market cycles.

That's no slam on them, it's simply that their investing styles goes in an out of favor. When they're "hot" they're "genius", when they're not, the same voices wonder aloud how they lost their way. I respect how they stick to their respective philosophies and strengths regardless of the market cycle we're in, but I think it’s key to keep in mind they’re never fools NOR omnipotent, they’re simply very good at their respective styles of investing, which go in and out of favor with market cycles.

[/quote] Oh. I'll ignore Buffet's 40 yr. record then. I'll also ignore the fact that PTTAX has outperformed the largest equity fund AGHTX by about 200 bps/yr for past 5 yrs. and outperformed the S&P by about 400 bps/yr in same time. Past 5 yrs. doesn't even cover ALL of the 2000-2003 "great unpleasantness". (This is how the genteel southern ladies refer to the Civil War.) I realize that the past 5 yrs. have been perhaps an anomaly, but agree that the previous 5 yrs indeed were. Those 50 yr. olds are now 60 and are RUNNING OUT OF TIME.
Jun 15, 2006 8:19 pm

[quote=mikebutler222] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

[quote=Revealer] You forgot Buffett and Rodriquez. They always bearish, too? ....... Point is, I am usually suspicious when someone tells me that they have this "method" to beat these GREAT minds.[/quote]

 

1) I can't speak about Rodriquez, but both Warren and Gross are usually on the bearish side and have been for as far as I can recall. I guess it comes from their respective  perspectives, Warren with traditional value and Gross as a bond guy.

2) I think you're right to be suspicious of any "system", OTOH, I think you're equally right to remember that Warren and Gross have both been far less than "genius" during various market cycles.

That's no slam on them, it's simply that their investing styles goes in an out of favor. When they're "hot" they're "genius", when they're not, the same voices wonder aloud how they lost their way. I respect how they stick to their respective philosophies and strengths regardless of the market cycle we're in, but I think it’s key to keep in mind they’re never fools NOR omnipotent, they’re simply very good at their respective styles of investing, which go in and out of favor with market cycles.

 [/quote]

[quote=Revealer]  Oh. I'll ignore Buffet's 40 yr. record then.

[/quote]

I wouldn't ignore it, <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Warren deserves credit for it and I have great respect for him. OTOH, don't forget how he missed the 1990s and how often the learned members of the financial world wondered how (then) he’d lost his way. Now that we’ve seen a few years of a value market, Warren’s a genius again, and the growth managers are dunces. He was never omnipotent and he was never a fool. He’s a great value manager and when value’s in favor, he looks even better, when it’s out of favor, he doesn’t. That’s not rocket science.

If we were having this conversation in 1998 we wouldn’t be talking about Warren as a star, is all I’m saying.

 [quote=Revealer]

I'll also ignore the fact that PTTAX has outperformed the largest equity fund AGHTX by about 200 bps/yr for past 5 yrs. and outperformed the S&P by about 400 bps/yr in same time.

[/quote]

That’s an intermediate term bond fund, which in a period of rapidly declining interest rates (the vast majority of the last 5 years) has been favored over a stock market that’s seen the bubble of 2000 burst, a recession and 9/11. Again, not to take anything away from Gross, his fund has earned 3 stars from MorningStar, 72% rank in category this year, 33% in three years, 11% in 5 yrs (but 90 bps on a bond fund is high, imho) but there’s no real genius behind beating the domestic equity markets in a period like this. It’s just an advantage ALL fixed income managers have had over equity managers in the past 5 years.

[quote=Revealer]

Past 5 yrs. doesn't even cover ALL of the 2000-2003 "great unpleasantness". (This is how the genteel southern ladies refer to the Civil War.) I realize that the past 5 yrs. have been perhaps an anomaly, but agree that the previous 5 yrs indeed were. Those 50 yr. olds are now 60 and are RUNNING OUT OF TIME.[/quote]

 

 

[/quote]

 

How are 60 year old “running out of time”, really? Are they going to go 100% into fixed income the day they retire, or do they invest with an eye towards current income, keeping in mind they’ll have to stretch that assets base fro perhaps the next 30 years?

 

 

 

 

Jun 15, 2006 8:20 pm

BTW, that’s the “recent unpleasantness”

Jun 16, 2006 4:20 am

Just when your getting nervous we have a 300+ bounce didn't I tell you to get back on the phone.......  Please..... 

I love how people over react Scrim, calll everyone who called you and tell them how ridiculous there actions were and tell them....   This is going to happen again next time maybe worse.  Do you want to be in the market or o you need some security (VA).....

Jun 16, 2006 4:41 am

bankrep1,

Why not both?

With the Allstate Advisor VA and a True Return rider the client can choose to guarantee up to 200% of their premium 20 years out (3.6%) and invest in the market.  Worst case scenario the client gets their account value or the True Return guarantee...whichever is greater.

Yeah...we all know that a properly allocated portfolio will perform better over 20 years but some clients need to have some sort of contractual minimum guarantee to invest in variable products.

Mar 3, 2010 9:09 am

The prices of the commodities and energy have suffered too versus the greenback now a days and this brings lots f worries to the growht of the economic stability which are triggered sfter the data from another side.

whiplash