Registered investment advisors from all over the country converged on Denver, Colo. for the three day annual conference of the National Association of Active Investment Managers. Session topics included investment strategies, research findings and practice management tips. Speakers and attendees alike had plenty to say about the merits of an active management approach to investor assets. Below are some of the smartest things overheard at the conference.
1. Bear Market Blues
Every time you see a bear market, people start to look for something else, says Martin Pring of RIA Pring Turner Capital Group, and a speaker at the NAAIM conference. Pring cautions advisors and investors about a set it and forget it strategy. By the time theyve all realized buy and hold doesnt work, well be entering a secular bear market, thats typically what happens.
2. Opportunity for Active Managers
The current bull market in bonds will end, as they often do, with a mad dash for the exits when rates being to rise, says Paul Schatz, NAAIM treasurer and president of RIA Heritage Capital. But proactive advisors could find a silver lining. Schatz argued that the aging boomer investor base, many of whom cant afford to see big losses in their portfolios, represent a major opportunity for active managers during a panel moderated by Financial Plannings senior digital editor Samantha Allen.
3. A Matter of Survival
Financial advisors are turning to active management strategies out of necessity says Warren Wall, a CFP and senior portfolio manager with wealth management W. Wall and Company. Its survival, he says. To attract and retain clients advisors have to find a way to differentiate themselves, which is difficult when theyre doing the same thing as the guy over there, he adds.
4. Investor's Volatility Tolerance
People cant handle the volatility associated with a 30-year investment horizon, says Larry Medin of Toroso Investments, a new money manager using Harry Brownes economic regime allocation model. He says its not necessarily that a buy and hold strategy wont work, but its a matter of whether the investor can tolerate the volatility that an investment like that would see over time.
5. Twitter is the New Ticker Tape
"Twitter is the new ticker tape," says Keith McCullough, chief executive of investment research provider Hedgeye, speaking at the NAAIM conference. I tweet like I trade, he adds. If I get something wrong I have 25,000 people telling me I'm an idiot and I like that.
6. Don't Go Completely Digital
It is okay to store documents digitally, but at least two items need to be kept as hard copies according to Thomas Giachetti, a compliance expert and lawyer with Stark and Stark. The two documents you should never throw away are the investment advisor agreement and the investment policy statement, Giachetti says.
7. Congress Keeps Kicking the Can
"Congress will continue to kick the can until the can kicks back," says Guggenheim Securities' Chris Krueger of the debt ceiling. He adds that the three catalysts that could help get something done about the deficit a downgrade of U.S. debt, bond market vigilantes, or one party control are all unlikely. Theyre so far apart on entitlements and revenue that the election aspect could happen far before a downgrade or a market reaction.
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