What financial advisors should know
Financial advisors are aware of the evolving movement of investors away from full-service brokers to varying degrees of self-directed investing using discount brokerages. Concomitantly investors are investing less in advisor-directed individual stocks or traditional managed mutual funds and placing their money into index and sector funds and alternative securities. ETF asset growth is exploding, threatening to overshadow and perhaps even make managed mutual funds obsolete.
Clearly investors, from millennials to baby boomers, those in the work force as well as retirees, are unsatisfied and disenchanted with the previous way their parents and grandparents invested in the markets. Recent surveys have shown huge numbers of investors out of the market altogether, or choosing to be self-directed in managing their portfolios. One survey showed that only two percent of investors would recommend their financial advisor to someone else.
Financial advisors are scrambling to re-invent themselves, to stay relevant to the investors that have become disenchanted and severely disappointed with business as usual by financial professionals.
Creative ways of keeping old clients and attracting new ones have sprung up. One way is the creation of liquid alternative funds, which allow average investors "to invest like millionaires," with funds open to all that use hedge-fund strategies such as long/short, leveraging, options, futures, forex, alternative securities, and so on. Unfortunately the high expenses and low performance results of these new types of funds and investment vehicles have proven that nothing has really changed and improved. Other innovations are automated Web-based tools that allow investors to easily analyze and construct their portfolios with minimal or no assistance from traditional brokers and advisors.
Unfortunately, the different old and new ways of investing have mostly failed the ultimate test of providing long-term performance that beats the market. All investment strategies seem to have the impossible task of reconciling good returns with minimal risk and volatility. Even the most prudent Modern Portfolio Theory allocations will suffer 20 percent or more losses in major market turndowns and bear markets. Many clients do not realize that a 30% loss requires a 43% gain, a 40% loss requires a 67% gain just to break even. And not to mention the lost time, precious lost time that will never be recouped. After inflation, expenses and taxes, MPT portfolio returns will not be appreciably better than the market.
If as a financial professional you wish to improve your clients' investment performance, then Ultrawest Research can be the answer.
> If you are open to alternative investment strategies to improve existing conventional (MPT and the like) portfolio performances
> If you are already using alternative strategies, such as market timing that is disappointing and underperforming benchmarks such as the S&P 500
With the Ultrawest Market Trend Report, the financial professional will be armed with market information and timing signals to manage portfolios with consistently high performance results.
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