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Portfolio > Asset Managers

It's All About Perspective

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Recently, I subscribed to CNBC PLUS. For about $10 per month, I can log in and watch CNBC as it appears on the television. This is a great way to keep up with the very latest news surrounding the markets and the economy as I’m sure you all know.

With the very volatile markets of the past several months, I have been trimming my client’s exposure to stocks, anticipating further declines. The most aggressive client portfolio I have at this time, in terms of asset allocation, is about 33% in stocks. I also subscribe to Morningstar Advisor Workstation – Office Edition. This costs around $5,000 a year and has proven extremely helpful in managing my client’s portfolios.

For instance, I download all portfolio activity from my custodian on a daily basis. Then, with only a few clicks of the mouse, I can create an X-Ray report which shows, among other things, clients’ allocation to stocks (foreign & domestic), bonds, cash, and other asset classes. This is a good way to monitor their allocation. Even though the portfolios are conservative, they are still trending down. Today, it seems as though losing only 5% is something to get excited about. It’s all about perspective, isn’t it?

I am in the midst of transferring some assets in from a bank brokerage firm and it’s been a real challenge. What would normally take a few weeks has turned into five weeks plus. The transfer documents were sent to the contra firm’s transfer department and after they sat on them for a time, they rejected the transfer. They said the transfer document needed to be sent directly to the advisor. My custodian’s transfer department had never heard of such a thing and neither had I. So I prepared new documents with the new address and they were sent via overnight mail to the advisor at the bank. Guess what? Even though the mailing address was correct, it went to the wrong floor and took a week to finally reach the advisor. Then the advisor had to forward it to the proper department for processing. Who has ever heard of sending transfer paperwork directly to an advisor? It’s a bit curious that this company’s stock price has held up relatively well during this turmoil. It makes me wonder if it’s because they are rejecting so many transfers (I found I was not the only one). The client is upset and I don’t blame him. While the markets were tanking, his assets were sitting in limbo waiting to be delivered to his new advisor, me. Who is this infamous company, you ask? I won’t say their name, but let’s just say that Bear Stearns is glad they exist.