Kaizen Wealth Management » Investments

2010 – The Year in Review

Kaizen Wealth Managment — Mon, 03 Jan 2011 17:22:19 +0000

Commodities and emerging market equities outperformed. Commodities did well due to investor demand, a weaker Dollar, and the continuing emerging markets growth story. U.S. equities performed better than many expected, beating developed international equities and the broad bond market.

Source: Standard & Poor’s, Barclays Capital, MSCI, Reuters/CRB, J.P. Morgan Asset Management

Gold Prices Have Spiked Before

Kaizen Wealth Managment — Mon, 18 Oct 2010 15:24:55 +0000

With economic and market uncertainty on the mind of investors, gold prices have rallied from $450 to over $1,300 in the last 5 years. But, unlike most commodities, gold has no true economic value beyond niche products such as jewelry, therefore the driver in its price is what the next person is willing to pay for the shiny yellow metal. This is impossible to predict. While gold could certainly climb higher in the near-term, history suggests caution as gold has fallen just as rapidly as it has recently risen.

Source: J.P. Morgan

Going with the “Flows”

Kaizen Wealth Managment — Wed, 29 Sep 2010 15:10:50 +0000

Source: J.P. Morgan Asset Management

U.S. Money Market Flows

Kaizen Wealth Managment — Wed, 29 Sep 2010 14:59:24 +0000

Source: Morningstar

Do hedge funds hedge?

Kaizen Wealth Managment — Fri, 04 Jun 2010 16:02:11 +0000

…the experience of the Great Recession

{click to open}

Source: Vanguard | 06/03/2010

The recent Great Recession provides a unique opportunity to examine the experience of hedge fund investors. Many investors believe that hedge fund managers have the flexibility to avoid the disastrous consequences of extreme market events. However, during the turmoil of the past few years, most hedge fund categories, on average, did not provide significant diversification beyond that of a 60/40 portfolio of stocks and bonds.

Foreign Intrigue

Kaizen Wealth Managment — Wed, 17 Feb 2010 23:33:52 +0000

U.S. Stocks with Heavy Foreign Exposure: Company Listed followed by its % of Sales Outside North America

Colgate-Palmolive 81
Avon Products 77
Coca-Cola 74
Autodesk 72
Aflac 72
Merck & Co. 70
Waters 70
Caterpillar 66
Nike 66
3M 64
Pfizer 58
Proctor & Gamble 57

You may be surprised by how big your foreign exposure is, or how small your domestic exposure is, when looking at your portfolio of individual securities, or what securities your mutual funds may hold.

Opportunities in International Investing

Kaizen Wealth Managment — Mon, 21 Dec 2009 16:40:25 +0000

More and more, we are finding it easier to justify our higher allocations to international equities. Roughly 55% of the investable equity universe, by market cap, is outside of the U.S. Also, world GDP has outpaced the U.S. GDP every year this decade; moreover, emerging markets have seen average GDP growth since 2000 of 5.9% – compared to 1.8% for the developed economies. International investing may also be a hedge against a weaker domestic currency.

source: J.P.Morgan Asset Management

The Power of an Investment Policy Statement

Kaizen Wealth Managment — Tue, 01 Dec 2009 20:54:18 +0000

Before we can give appropriate investment advice, we work with our clients to construct a comprehensive Investment Policy Statement (IPS). Creating an Investment Policy Statement (FPA Press), by Norm Boone and Linda Lubitz Boone, spells out the purpose and benefits of using an Investment Policy Statement:

Identifies specific client objectives, risk tolerance, and time horizon.
Explains the investment strategy and defines asset-allocation policy.
Establishes a process for making investment decisions and guidelines for future decision-making.

The IPS may also serve as a forum for client-advisor communication and moderate influences against making decisions in an emotionally-charged environment, helping to avoid negative investment behavior. The policy statement may also establish a record of decisions and an objective means of measuring performance, as well as help with monitoring progress.

The information gathering process insures that we raise and discuss all pertinent investment issues.

For a sample Investment Policy Statement, or to discuss your investment process with us, please call 843-577-7701 or email info@kaizenwm.com

Forecasting: Interest Rates and Market Changes

Kaizen Wealth Managment — Tue, 29 Sep 2009 17:41:11 +0000

The function of economic forecasting is to make astrology look respectable.
- John Kenneth Galbraith

I’ve been in the forecasting business for 50 years, and I’m no better than I ever was, and nobody else is either.
- Alan Greenspan

And the cost of reacting to forecasts, stock market promoters and other financial media commentators - leading to poor investor behavior: about 6.5% per year over the past 20 years.

Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.
– George S. Clason [The Richest Man in Babylon]

Two-Thirds Don’t Have a Financial Plan

Kaizen Wealth Managment — Fri, 25 Sep 2009 15:56:50 +0000

Despite increasing pressure to slash debt and rebuild retirement funds, nearly two-thirds of consumers do not have a written financial plan, according to the 2009 National Consumer Survey on Personal Finance.

The survey, released today by the Certified Financial Planner Board of Standards, found that 64% of respondents do not have a written financial plan in place.

“Those in the know who are using financial planning are finding it a valuable experience,” Eleanor Blayney, consumer advocate for the CFP Board, said in an interview. “There are just too many people who are not using it.”

We couldn’t agree more.