April 4, 2003

IA's April Speaker of the Month: Roger

Roger Gibson, president of Gibson Capital Management, in Pittsburgh, Penn., will participate in the panel discussion Real World Planning Considerations in Money Management at the 2003 NAPFA conference in late April in Sparks, Nevada. Moderator Bruce Temkin, a pension plan expert and author of The Terrible Truth About Investing, will talk with Gibson and planner Harold Evensky, chairman of of Evensky, Brown & Katz in Coral Gables, Florida, on the financial issues of today's market.

During this panel discussion, what exactly will you cover?

Ten years ago Bruce Temkin moderated a discussion between Harold Evensky and myself on different industry issues. So his idea was to pull together that same panel 10 years later to find out how the world of investing has changed, how it has stayed the same, and to see how our stances on certain issues have evolved.

I believe some of the things he wants to cover are the differences in investing in a lower return environment. We have been through a significant bear market, so he'll ask what each of us has learned, and then ask if we are in fact moving forward in a lower-return environment, and what that means.

There is also going to be some attention on the importance of diversification as a means of mitigating downside risk. If you have less volatility in a portfolio structure, then the likelihood of dipping into the red goes down. So in my mind, one of the implications of a lower return environment is going to be the importance of broader diversification.

There will probably be some discussion of tax-advantaged investing, and that will include issues like how to get optimal use out of tax deferrals that IRAs and qualified plans provide investors with in the context of an overall portfolio. There has also been this growth of awareness for the tax management aspect of portfolio work, so that will probably be another topic.

How do you think the aftermath of a war with Iraq affect our economy?

I don't think the war will negatively impact the market. The question is, "Will it go better or worse than we think it will?" That is what will impact the market. It is interesting that the market hasn't gone down in light of the concern, which signals it has already digested the negative implications. To me this is a major opportunity to revisit risk tolerance.

It's not that you should revisit the good or bad things that can happen in the next few months because good and bad things can always happen within portfolios; what makes the war situation different is that it's got a timetable and it's in everyone's face. So I am not an advocate of doing any short-term maneuvering based on what might occur.

If a client would come to me and say they are nervous about the amount of equities in their portfolio because of war, to me that is an opportunity to reevaluate how much equities they have and their commitment.

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