So you think he knew Lehman was going under and lied to your face ? Why would he do that ? Or is it possible that he missed it like many other bond analysts ? Every damn mutual fund in the world owned BofA and Citi, should you never use their funds again ?

[quote=Ron 14]So you think he knew Lehman was going under and lied to your face ? Why would he do that ? Or is it possible that he missed it like many other bond analysts ? Every damn mutual fund in the world owned BofA and Citi, should you never use their funds again ?

Well if you were able to sell out of all of your financials before they lost and you were absolutely confident in their decline a few strategic put purchases would have made you a few 100k. If you have this type of consistent ability you don’t need to advise clients on anything, you can trade for yourself for more money and less hassle.

I should probably clarify what I said earlier, as it sort of started a little battle…I did not suggest that Jones was making “bad calls”, so to speak. What I meant was, I don’t want to have to live by all of their decisions, a good example being their asset allocation methodology. I believe they are too aggressive (yes, you heard me right). I do not believe a 55 year-old with a moderate risk tolerance should be balanced towards growth. I have a specific methodology for how I allocate investments for those approaching retirement, and I am FAR more conservative than Jones. However, I have to “jockey” the system (lie, for all intents and purposes), in order to get a more conservative allocation in Advisory Solutions. Usually it involves scaling down the client’s risk tolerance (clients don’t know their risk tolerance anyway, but that’s another discussion).

I realize Jones follows the standard FPA process for allocations, risk tolerance, etc. which is great for protecting their liability, but I believe there are situations to dial back the risk, and they are just so pro-equity all the time, that I have a hard time with it.

Yeah this discussion is about to turn into a predicting vs planning argument and I have no interest in participating in that.

[quote=Ron 14]Well if you were able to sell out of all of your financials before they lost and you were absolutely confident in their decline a few strategic put purchases would have made you a few 100k. If you have this type of consistent ability you don’t need to advise clients on anything, you can trade for yourself for more money and less hassle. [/quote]

No.  Lost a little bit.  Got back in on the way up.  Not precise, but really all you need to do is look at the financial statements.  It is certainly better than hanging on until the stock reaches $7 a share and then putting a sell on it.  That is irresponsible and why people are so fed up with our industry.  This recession created huge opportunities.  I’m sorry, but sometimes the talking heads are right, probably because they read the statements.

I don’t “predict” anything.  I adjust my models based on any new information.  I have certain criteria for valuation.  DeRose SHOULD have known better.

EDIT:  Feel free to get back on topic.  Ron and I have had this out too many times.  It just makes him not like me.

Personally, I think AS is a good program, and will be extremely helpful to Jones clients as it continues to evolve.  I think it is a tremendous asset gathering tool, if used correctly.

I don’t know anything about the Chase Strategic Portfolio, but if they are similar, then it’s also a good program.

[quote=B24]I should probably clarify what I said earlier, as it sort of started a little battle…I did not suggest that Jones was making “bad calls”, so to speak. What I meant was, I don’t want to have to live by all of their decisions, a good example being their asset allocation methodology. I believe they are too aggressive (yes, you heard me right). I do not believe a 55 year-old with a moderate risk tolerance should be balanced towards growth. I have a specific methodology for how I allocate investments for those approaching retirement, and I am FAR more conservative than Jones. However, I have to “jockey” the system (lie, for all intents and purposes), in order to get a more conservative allocation in Advisory Solutions. Usually it involves scaling down the client’s risk tolerance (clients don’t know their risk tolerance anyway, but that’s another discussion).

I realize Jones follows the standard FPA process for allocations, risk tolerance, etc. which is great for protecting their liability, but I believe there are situations to dial back the risk, and they are just so pro-equity all the time, that I have a hard time with it.[/quote]

I’m glad someone said this. They have a ridiculous equity bias, I can’t tell you how many times I have explained to clients that we are reducing our risk profile even though it seems to be OK with EDJ’s IPC.

That is my criticism of ADSOL too. If I don’t want a bunch of equity funds and ETF’s in a portfolio, I shouldn’t have to have them just because that’s what the “model” suggests. Not to mention, it  seems they pay no attention to the sector weighting in their recommended portfolios. Many of the funds in those portfolios are heavily weighted in financials, which makes me a bit uncomfortable.

[quote=SometimesNowhere]

[quote=B24]I should probably clarify what I said earlier, as it sort of started a little battle…I did not suggest that Jones was making “bad calls”, so to speak. What I meant was, I don’t want to have to live by all of their decisions, a good example being their asset allocation methodology. I believe they are too aggressive (yes, you heard me right). I do not believe a 55 year-old with a moderate risk tolerance should be balanced towards growth. I have a specific methodology for how I allocate investments for those approaching retirement, and I am FAR more conservative than Jones. However, I have to “jockey” the system (lie, for all intents and purposes), in order to get a more conservative allocation in Advisory Solutions. Usually it involves scaling down the client’s risk tolerance (clients don’t know their risk tolerance anyway, but that’s another discussion).

I realize Jones follows the standard FPA process for allocations, risk tolerance, etc. which is great for protecting their liability, but I believe there are situations to dial back the risk, and they are just so pro-equity all the time, that I have a hard time with it.[/quote]I’m glad someone said this. They have a ridiculous equity bias, I can’t tell you how many times I have explained to clients that we are reducing our risk profile even though it seems to be OK with EDJ’s IPC. That is my criticism of ADSOL too. If I don’t want a bunch of equity funds and ETF’s in a portfolio, I shouldn’t have to have them just because that’s what the “model” suggests. Not to mention, it seems they pay no attention to the sector weighting in their recommended portfolios. Many of the funds in those portfolios are heavily weighted in financials, which makes me a bit uncomfortable.[/quote]



B24 it is funny that you say this. I transferred in a fairly large account just 2 days ago and after running his “Risk Tolorance” through Jones system, he came out balanced toward growth. I was thinking, 55, wanting to retire in 2 years…Are you serious?

Totally agree - too much equity-- but that is how they make the most upfront with all those Ashares over the years- and now it is just ingrained in the culture to be pro equities (but never any talk about how risk can be lowered thru the use of the lowest equity-correlated assets: commodities and treasuries (Hard to make a buck on treasuries in a proAshare enviro-----but ABNDX is not diversification!!!).

Newnew,

[quote=B24]Newnew,

Yeah, I’ve read it.  It’s good.  I used to do something similar to what he recommends, but after reading the book, it made it much easier to illustrate to clients.  He also gets a lot of press in things like Money, MSN Finance, Yahoo Finance, etc., so people have commented before that they “read something just like that”.  For whatever reason, people like to see “experts” (even when they may just be finance columnists) confirming what they are doing.

OK. But 2008 showed how much “TRUE” AAA is needed in a port- and it just does not pay well, and is not emphasized at all. All the training is on “bonds” with no differentiation other that two bars on the bar graph: Highyield and Income. That’s it.

Newnew,

Diversification:

Minimum investment

Quality

B - I think what you are seeing could be called the Great Awakening @ EDJ.  For YEARS research was only done on equities.  Mostly large cap value at that.  I remember almost falling out of my chair when they put a mid cap stock on the research list.  Tiffany's I believe it was.  "Marketing" was "here's an ICA guide...Happy Selling!"  Product Review's only job was to make sure that what we offered didn't turn out to be another Baldwin United (or whatever that was).  And IPAC's seemingly only function was to mess around with how much international and high yield was appropriate.  You can still find grizzled Jones vets who only sell dividend paying stocks, American Funds, and long bonds. 

I’ve always been of the opinion that if Jones were to educate their advisors about portfolio theory and structure, in a classroom setting or with some very good online materials, that we’d be much better asset gatherers.  Can you imagine coupling a well educated advisor with the doorknocking strategy?  Mr. Prospect - you give me 15 minutes with your portfolio and I’ll be able to tell you the good, bad, and ugly of your portfolio and where I can improve on your current advisor. 

If it were up to me, at Jones it would be an additional class, probably after PDP.  A week long intensive class on nothing but investments.  Not enough to create a group of quasi CFAs or CFPs, but enough that they know what they’re looking at when they pick up a Morningstar report on a fund or a stock report or how to point out the weak spots in a competitor’s plan.  They cover different investments in training now, but only enough to get the new folks comfortable with the difference between a stock and a bond.  Most importantly how to create a script for selling them.  Until I went from the training environment at EDJ to the real world of being an FA, I didn’t realize how incredibly unprepared I was for to look at a portfolio and talk intelligently about it.  There’s a simple reason that most new FAs at EDJ sell only American Funds.  It’s because they don’t know any better.  It’s not their fault, they just simply haven’t been trained any better. 

Good to see that, B24. I would point out that they still have up to 40% in 16 year plus. The comments above, however, do echo my post. I remember the main “lesson” in training was that phoning anyone and everyone on a 30 year A rated financial bond was just fine (I defn questioned them on it). Why? “Wouldn’t you always want 6% return on some of your money? It can’t hurt anybody”

What’s wrong with 40% in >15 year bonds? The sweet spot in the yield curve is 20 years right now. I’ll take 6.5% A+/AA- Taxable MBDs all day long.



“Mr Smith, if you earned 6.5% a year for the next decade or so, would you be happy?” 4 out 5 times the answer is yes and 9 out of 10 for those over 60.