10 August 2018

Beware of Private Bankers offering 'products'

Any relationship with a Private Banker or Financial Adviser should be clearly defined. This applies in particular to the responsibility for investment decisions and performance. You either are fully in charge of all decisions - then you really need an execution-only broker, maybe an on line broker offering low commissions - or you give full discretionary authority to the banker/adviser.
The worst situation is where you get 'consulted' about any investment - in the worst case this is just a disguised sales pitch to make you invest in a 'product' that comes with a hefty commission for the banker/adviser. Even though quite a few jurisdictions prohibit these commissions (they can often be paid for as long as the client keeps the investment!) there are ways around these regulations. Firms set up in-house funds that come with fees or - even worse - create 'structured products' that come with opaque fees (and often risks that are not clearly discernible for the lay investor, however successful he/she may be in their own business). It is essential that investors get independent advice before and during the engagement of investment advisers. Fees, Risks and Performance can be monitored for a low annual or one-off fee.
No clear benchmarks, no capital protection, no stop-loss - these should set the alarm bells ringing for any investor/client.

Banks and Asset Management - do they mix well??

Many years ago the standing joke in the world of Investment Management were the captive Mutual Fund subsidiaries of the major banks. They were often used as dumping ground for the new bond or share issues that the parent bank found difficult to place.
Ever since PBA has been suspicious of Asset Management firms that were part of a financial conglomerate. While the regulation and prevention of conflicts of interest (Chinese Walls) has improved enormously it still pays to keep an eye on this potential problem. An independent assessment of costs (fees) and risks will prevent that your investments suffer from any conflicted advice.

Index Funds and ETF's - stay close to the Exit

Index Funds and ETF's may be a wonderful choice in the eyes of many investors - individuals and institutions alike. But one aspect gets not mentioned often enough: apart from the risk that you will be fully exposed to any market decline (how good are your market timing skills?) the relentless flood of money into these instruments/strategies also pushes the already expensive component stocks to an ever higher multiple. It creates a sort of Pentium mobile or self-full filling mechanism. The higher a stock like, say, Amazon climbs, the more money is allocated to this stock - as long as people want to allocate money to the asset class, the stock market in this case.

Academics and Bitcoin - a curious Mix

On a day when there is a report out about the confused approach of regulators regarding the $200 billion 'cryptocurrency' market another report caught my eye: Academics study the probability that bitcoin's price will fall to zero - in one day! But a similar calculation would be to find the probability that a meteor hits the earth and wipes out all life - interesting but pretty useless. Cryptocurrencies serve those in failed states quite well, in addition to criminals and tax cheats. Use your common sense!
How likely it is that bitcoin will become worthless? (CNBC)

13 March 2018

IPO - enjoy with (extreme) caution

Another interesting comparison: talk of $ 6 Billion valuation, revenues £151.3 Million (2016). Profits? Don't ask.

18 December 2017

Hottinger Fraud - Do not get to trusting

No comment needed - but any potential investor should read this and learn from the mistakes that the defrauded investors made.

1 December 2017

Bitcoin: The drumbeat goes on

The drumbeat goes on, any number of self-appointed 'experts'  push bitcoin etal, still not clear what 'value' it has or provides, just question of time that regulators impose restrictions, to market, buy/sell it through traditional banking channels unless full 'know your customer' disclosure is made. and who REALLY needs bitcoins, internet banking is so efficient already! Price easily manipulated due to complete lack of transparency, and who are the idiots that pay $10,000 for a bit with REAL money?
Here's why not to put your money into bitcoin (Evening Standard)

30 November 2017

Pictet hires new Partner

Assuming the purported annual compensation is close to reality (Sfr 25 Million) one can truly say that Boris Collardi works on 'Wealth Management', his own! Let's hope that 'clients' do as well, since 2009 there has been a continuing boom period in all asset classes. As most fund managers tend to be more or less long come rain or shine they will have happy customers and no one will be checking the substantial fees too closely. When the inevitable bear markets - or even stock market crashes - arrive the moment of truth will arrive. Fees will still be charged, but as the proverbial question will arise: 'Where are the customer's yachts?' (in this case on Lake Geneva)

Wealth Management - but for whose pocket?

16 November 2017

What Americans pay in Advisory Fees

Personal Capital Advisor Fee Report

13 November 2017

Beware of Investment Scams!

Nearly a decade after Bernie Madoff, Americans are still losing their life savings to Ponzi schemes.
It is difficult for ordinary investors and savers to identify swindlers and conmen. PBAdvisory can help you with due diligence and allow you to follow the old principle: Investigate before yu invest! It is surprising how often investors neglect to conduct the most basic background checks before parting with their hard-earned money.