18 June 2017

Road to Serfdom - USA well on the way

Good advice is now needed more than ever! Big Government is after your Money!

Bitcoin And Cash Targeted In Silly "Anti Terror" Civil Asset Forfeiture Law

Morgan Stanley Adviser's fees - Your loss?

Given that nearly all asset classes are in a steady upwards trend for quite a few years it may not hurt your pocket if your 'Adviser' pockets $ 1 million a year from his clients. But that will change - even if markets hold up, the expected returns will at best be in the low to middle single digits and any fee around the average charged by the Financial Industry (1% of assets) will take a hefty chunk (20-35%!) out of those returns.
Strict control of fees you pay will be a major contributor of your investment performance from now on!
Morgan Stanley is going after a $500 billion opportunity (MS)

11 June 2017

Temple Associates: Credit Ratings - still no reform

Temple Associates: Credit Ratings - still no reform

5 June 2017

People's Trust - more than a catchy Label?

Not convinced that the structure is all that different from a conventional Investment Trust offering. Seven managers, terms not disclosed, the overall fees for the Trust give the game away however. Any target for the investment return is not more than wishful thinking, at least 7 percent is not too ambitious but still doubtful in a world of low returns. The only thing that is certain are the fees that the subadvisors will earn for a very long 7 years. Will that be an incentive to make better investment decisions? Your guess is as good as mine!
People's Trust reveals Manager Line-up

22 May 2017

Don't think Safe Deposit Boxes are safe

Thieves and Tax authorities are a threat to Safe Deoposit Boxes, whether they are in your home or in a bank - not sure which one is worse!
Greek Authorities To Launch Mass Confiscation Of Safe Deposit Boxes, Securities, Homes In Tax-Evasion Crackdown

21 May 2017

Cliff Asness: ESG May Help the World But It Won’t Help Your Portfolio

Could not agree more. Legislation is the way to solve the World's problems, not posturing by companies and asset managers.
Cliff Asness: ESG May Help the World But It Won’t Help Your Portfolio

12 May 2017

Robo-Advice vs. Human Adviser

Automated financial advisers, also known as Robo-Advisers, are taking a growing share of the market for financial advice and planning. Lower cost and easy access are the main factors behind this trend.

Traditional Advisers argue that they are the only ones that can give personalized advice on complex problems.

But even the most complex portfolios can be handled without resort to high fees.

Let's see what complex issues may face the average - and even high-net - investor: in most cases they are related to Estate or Retirement Planning - but they can easily - and more expertly handled by tax experts (or accountants or lawyers with relevant qualifications). These professionals will not charge an ongoing fee based on the value of your asset but a fee based on an hourly rate schedule. On an estate of $US 5 million and up this should be substantially cheaper. A 1pct annual management fee would total $50,000 PER YEAR!

This leaves the question of HOW your wealth should be invested, first of all the basic asset allocation (property, shares, bonds etc). To a certain extent automated models based on questionnaires should go a long way to provide the answer. It may not be precise, it may even not be the best choice in hindsight but remember: all recommendations by human advisers may also not work out exactly as hoped for (to put it mildly).

My solution to this dilemma is as follows: put a large part of your wealth into the asset structure that is recommended by the Robo-Adviser and put the rest of your wealth into the hands of carefully picked human portfolio managers. Make sure that they charge reasonable fees (expensive does not guarantee better performance!) - preferably with a well-structured performance component.

Traditional Advisers vs. Robo-Advisers


5 May 2017

Your Adviser gets incentive not to offer cheaper Funds

That could happen if Morgan Stanley decides not to pay its brokers for clients' ETF holdings.
morgan-stanley-weighs-changing-broker-compensation-on-vanguard-funds-1493987204 (Paywall)

4 May 2017

Is The World's Largest Bitcoin Exchange Headed For Collapse?

Exotic but risky! Remember that  Bitcoin consists of nothing but bits on some distant computer! While the same can be said of most other assets (Bank deposits, Bonds, most Shares) this is less regulated - and if it is we would like to learn about this from the promoters or fans!
Is The World's Largest Bitcoin Exchange Headed For A Mt. Gox-Style Collapse

3 May 2017

100-year bonds - only for traders and madmen!

If anyone seriously considers 'investing' in 100-year bonds he should immediately see a doctor, or even better, a psychotherapist. There is no value in this piece of financial garbage, certainly not when global interest rates are at all time lows, and artificially (criminally?) depressed by Central Banks in the pay of useless and inept governments. There may be times when these ultra-long maturity bonds offer trading opportunities, but apart from opportunities to sell them short the time to go long is in the distant future. Be careful that your financial adviser does not stuff your portfolio with this paper! Institutional investors may be tempted to buy into this hype, but it is not their own money and when the s**t hits the fan the fund managers responsible will long be gone.
Trump's 100-Year Bonds Contain Lots of Risks for Traders