[privatebanker]

I think the market dropping like that doesn’t seem to be in the cards. There is an astonishing amount of cash still on the sidelines. From what I see, the fundamentals are still in place.

[privatebanker]

I think what everyone is saying here is that it is impossible to predict the future. The best you can do when determining a potential fund to invest in is to conduct extensive due diligence. Look at the tenure of the portfolio manager, what is the risk of the portfolio? i.e. standard deviation & beta vs. benchmark, what is the annualized rate of return vs. the appropriate benchmark? What are the internal fees and are they enough to outperform the fund’s benchmark? The idea is to invest in funds that have low correlation to one another so that you are capturing as much Alpha as possible to offset any underperforming asset classes. If you feel one asset class’ funds can never beat it’s benchmark than buy the index or employ a core/satellite strategy utilising index funds as your core holding and add high alpha active managers to beat the index. Make sure to conduct due diligence on any index funds as well. There are many issues with index funds for example, many funds have significant tracking error, many have high internal expenses and many do not report the trading costs within the funds.

[privatebanker]

I would say wait a while. Buy when the mortgage, taxes and insurance only take up at the most 30% – 40% of your after tax monthly income and that’s at the high end. If you can’t afford it then you can’t afford it. I don’t understand why people are willing to stretch themselves to the point of suffering just to own a home…

[privatebanker]

When are people going to realize the party is over? Come on! This guy is clueless. He’s watching over these figures as if he’s a trader on the CBOE or something, you have to be kidding. It’s time to move on. There are other asset classes out there that have great fundamentals to consider for investment.

[privatebanker]

Here’s an article from Worth Magazine that discusses the Art Market.

“Annual sales of art amount to $10 billion in the United States alone, according to various industry estimates. In the past several years, consultants and economists have turned their sights to the problem of tracking this sector’s investment performance. Research by Jianping Mei and Michael Moses, professors at NYU’s Stern School of Business, and firms such as Art Market Research in New York, Kusin & Co. in Dallas and Gabrius in Milan, shows that art can complement equities, bonds and other more traditional investments because its price movements are not correlated with those of financial assets.

One thing is clear: fine art appreciates over time, and may outperform equities in some instances. The Mei/Moses All Art Annual Index tracks the auction prices of 6,000 pieces of art, including pre-1950 American paintings, Old Masters, 19th-century masters and Impressionists. Last year, the Mei/Moses index rose 21.7 percent. Equities fared better: the S&P 500 rose 28.7 percent. Longer term, the art index shines. The Mei/Moses benchmark had an annualized compound return of 12.6 percent over the past 50 years, beating the S&P 500’s 11.7 percent.

The gains are not only in aggregate measures, of course. Moses—himself a collector of what he terms “representational American painting” from the second half of the 20th century—notes that Boy with a Pipe outperformed the market, posting an average annual return of around 16.5 percent since Betsey and John Hay Whitney bought it in 1950 for $30,000. Alternatively, the two Edgar Degas racing scenes from the same lot returned 8 percent per year for their owners.”

The art market has benefited from the latest surge in foreign investors mainly from Russia and India. They are paying outrageous prices and throwing caution to the wind. Low interest rates help to fuel the art market as well.

http://www.stern.nyu.edu/om/faculty/moses/FineArt/2004ALLARTINDEX1953.pdf

[privatebanker]

I know of several developers that are on the edge of total failure. Many are stretched so thin, they are knocking on every bank’s door for help. The big players will probably be able to sustain for the most part. But don’t be surprised if this becomes a recurring issue with a lot of the smaller developers.

[privatebanker]

“What really cracked me up is privatebanker’s post criticizing PS because the bear funds PS identified have fallen over recent years (as the markets have climbed).

Makes me wonder if privatebanker figures a “good” bearish fund should RISE in a rising market? Seems a bit clueless. ”

I said that first of all, those two funds have been ineffective thus far. Sure the markets have been in somewhat of a bull market since they were incepted however, they haven’t turned over a dime. Putting all of your retirement money into a speculative strategy such as that is crazy. Most of those bear funds are good hedges for your portfolio but they aren’t meant to be your core holding.

You might want to read the entire post next time before calling someone clueless. I’ve been in the private banking industry for a very long time and have seen all kinds of market cycles.

[privatebanker]

Now there’s a sound investment strategy!

RYTPX = Average 5 year return -15.3%, that’s almost -50% cumulatively.

RYCWX = Hasn’t been around long but year to date has lost – 12.97% and -15% for 1 year’s time.

Sure they may serve as a good portfolio hedge if the markets were declining. They aren’t meant to have all of your money invested in them. Another bright idea by PS. Simply amazing…

[privatebanker]

PS –
You’re calling my bluff? What bluff? My initial statement was in the best interests of those who have no investment experience and needed some sound advice. Do you even know what a CFP is? It’s not a role, it’s a credential one can obtain through extensive studying and then passing an exam. A CFP can be a financial planner, stock broker, private banker, etc. There is no specific way to track a CFP’s rate of return. Everything that you have said shows just how naive you are. Your recomendations telling people to put all their money in CDs, etc. is very questionable. Are you a registered investment advisor? I’d be very careful if I were you.

As for what I recommend my clients, it all depends on their situation as I mentioned before. I wouldn’t recommend the same portfolio for someone that is retired as I would for someone that is in their mid 40’s. That would be ridiculous! And what I do recommend them is confidential and I wouldn’t dare share that to you on a public forum.

I will give you an idea of what I do for my own investments and their returns. I won’t give dollar amounts or allocation percentages.

**THIS EXAMPLE IS NOT A RECOMMENDATION. THE FOLLOWING PORTFOLIO SUMMARY IS SIMPLY A BREAKDOWN OF WHAT I CURRENTLY HAVE AND IS IN NO WAY SUITABLE FOR AN UNACCREDITED INVESTOR. DO NOT ATTEMPT TO DUPLICATE. PAST RETURNS ARE NO INDICATION OF FUTURE RESULTS**

I look to outperform the S&P 500 while taking on less risk (less standard deviation). I utilize the following institutional money managers (seperate accounts managed on a discretionary basis):

– Ashfield Advantage Growth (Large Cap Tax Sensitive Growth)
– NWQ Large Cap Value
– Wells Mid Cap Growth
– Anchor Mid Cap Value
– UBS Small Cap GRAP
– Keeley Small Cap Value
– Brandes International Value
– Invesco REIT
– PIMCO Total Return Bond
– OZ Master Fund (Hedge Fund)
– Alternative Montage Fund (Hedge Fund of funds), Series E – Emerging Markets Fixed Income and Equity, Series F – Event Driven & Series H Distressed Equities
– CAP Diversified Real Estate Fund (Private Equity)
– ACE Investment Strategists, LLC (Managed Futures Fund)

Portfolio’s Annualized Rate of Return for the last 10 years = 15%+ (meaning some managers have returned more, some less). The managed futures fund has only been around about 6 years but has averaged almost 50%/yr. Portfolio standard deviation is less than the S&P 500 by around 3% or so. I’m not looking to make a home run every day either. I’d rather take an institutional approach to my investments through modern portfolio theory and quarterly rebalancing if needed.

Good luck on trying to track these managers’ returns. You would need to see their individual holdings to do that and they aren’t mutual funds, they’re private investment managers so it’s hard to find their holdings. You would need to be invested with them most likely.

[privatebanker]

You just don’t get it. You’re like a bulldog or something it’s hilarious. When did I say I was superior to anyone? I don’t think I’m any better than anyone else.

You’re weird, your life revolves around this website. What would you do if this website went down?

[privatebanker]

Word games? I don’t provide a cookie cutter approach to clients meaning no two clients situations are the same. People have different perspectives on life, the economy, investment experience, etc. Also, I work for a Private Bank and our minimum is at least $5 million. Most clients I work with are more concerned with preservation of capital with a risk/return that outperforms their preferred benchmark rather than hitting a home run every day. We incorporate as many asset classes as possible so long as it is within the client’s risk/return comfort zone. Alternative investments are almost always included in client portfolios i.e. hedge funds, private equity, CDOs, commodities, etc.

[privatebanker]

“privatebanker, what is the annual return of the average CFP, or the one that you recommend? Their track records are no better than the average Joe.”

First of all a CFP is not a fund or a security. There is no CFP index or average rate of return. Each portfolio recommendation is unique to the individual that they are creating for. A CFP or Certified Financial Planner should be someone that can provide you with a holistic perspective of where you are with your money and where you want to be with respect to your comfort towards risk. Clearly not for someone with a myopic perspective such as yourself. You clearly have a lot to learn. Good luck.

CFP Website:
http://www.cfp.net/learn/

[privatebanker]

I’ve always said, “THIS IS THE LAST PLACE YOU WOULD WANT TO RECEIVE INVESTMENT ADVICE!” I’ve seen some very naive recommendations. This is a housing site! Go see a CFP!

[privatebanker]

Yes, I’d have to say PS posts a lot of naive comments/articles. The general reason for this forum is for anyone to freely post and comment, etc. But there needs to be a limit. PS, nothing personal, just use a filter on some of your posts/comments. Another thought would be for you to start your own blog?

[privatebanker]

Larry, you are absolutely right on this. Banks are so pressured to provide financing to low income borrowers that they have to exceed their standard risk preferences. The banks of course turn around and sell the loans as high yield, high risk MBS. Sure, there will be some defaults but not all.

[Author]

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