The perspective as an ex-pat is interesting. My recent trip to the USA only highlighted it. I could not help but look at some of the activities in the United States and shake my head and wonder: How is this nation with so many gifts and blessings, so capable of self-sabotage?
We were not back from LAX for more than several days before the news began.
I won’t go into my views on gun control, politics, etc. I will save that vitriol for when we meet and can break bread. For now, I will stick to the markets.
That said, I keep going back to the old quote by William McChesney Martin and “time to take away the punch bowl.” Fed policy has been well signaled and the American investor needs to prepare.
Institutional investors seem ahead of the game already with regards to their own cash positions…some more extreme than others. But even Los Angeles manager TCW has been preparing portfolios for the change in rates. Maybe it is time to hold cash?
But, investors will no doubt rally behind a Greek relief trade. But again ask yourself: What will cause this market to rally any further?
For those who want to buy stocks I would argue: Why pay anything at all? I am not offended, ignore my advice to wait on the markets and go invest. If so, do it as efficiently as possible.
The folks at Replicas seem to have this figured out. Top managers in one account for only $9.95. Full disclosure, I have a vested interest in this platform. I personally believe that investment fees will soon go away. Here’s the link to their large cap portfolio on the Motif broker-dealer platform.
Why not take that a step further? Let’s remove the wealth management fees too! Imagine that. No investment fees and no wealth management fees. Possible? Absolutely. Here’s a link to network of planners nationwide that have this figured out. Again, I have some skin in this game.
But, despite my seeming altruism, I would argue you should keep your powder dry. While you are at it, take some powder off the table. Does powder go into a mattress?
This “free-ness” led me to an interesting conclusion. It was a somewhat obvious one, but a conclusion nonetheless. All of the robo-advisors aren’t providing advice at all. They are 100% geared to investing. That’s it. "Robo-allocators" would be a better description (tip of the hat to Hardeep Walia at Motif). Which begs an interesting question: Does advice go away? Or, is advice only sought in bear markets?
People forget that passive investing took a HUGE hit in the Great Recession. “Stocks for the Long Run” did not ring true for investors who saw liquidity dry up. What say you robo-advisors? That’s right…you don’t read blogs.
But, if we really want to look at advice folks need to pay attention to the AI initiatives in Asia. There in Singapore is the model of robo-advice. And guess what? People trust it.
Our trip state-side resulted in a series of good reads for the summer. Here’s my list if you need to knock down some reading:
Extraordinary Comebacks: 201 Inspiring Stories of Courage, Triumph and Success
A Spy Among Friends: Kim Philby and the Great Betrayal
Each of these provided me enough left brain/right brain activity to keep me challenged. It was nice to kick back on Sunday AM with a good cigar and a good read.
This trip we spent a considerable amount of time in the Santa Ynez Valley. That has always been our home away from home for many, many years.
While there, we had the chance to get caught up with Mark Horvath, one of the more talented winemakers in the Valley. Our family was fortunate to have him come over and let us taste some of his wines. They are definitely worth a look on their website. Just let them know that we sent you over.
On that jet lagged note I will end this missive. We landed at Changi yesterday and I thought I would attempt this before the exhaustion set in. I have to admit, it is nice to be back in our new home in Singapore. The kids seem safer now.