Articles You Can Send to Clients (July 15, 2009)

Friday, December 18th, 2009

As pref­aced in today’s newsletter:

Dur­ing this period of height­ened require­ments for com­mu­ni­ca­tions to your clients, keep­ing in touch with your net­work of clients and prospects is crit­i­cal. While there is no sub­sti­tute for one-to-one meet­ings and phone calls, weekly or peri­odic emails are an effec­tive way of stay­ing vis­i­ble and devel­op­ing frank and open dis­cus­sions with both clients and prospects.

Start­ing today, and every Wednes­day from today, as a ser­vice to you, we will be send­ing a list­ing of 3–5 arti­cles from high value sources (e.g., G&M, WSJ, NYTimes) that you may use to send to your clients and prospects as part of your com­mu­ni­ca­tions strat­egy. We will also include some help­ful pref­ac­ing notes that you may use as well.

Keep in touch, and , by the way, if and when you find use­ful arti­cles, we would be extremely grate­ful for your submissions.

Below is this week’s selec­tion of arti­cles that you can send to clients.

Here are three arti­cles that I thought you might find inter­est­ing which dis­cuss the eco­nomic out­look of Lak­sh­man Achuthan, one of the fore­most econ­o­mists in the US, the out­look for stocks from the Wiz­ard of Whar­ton, Jeremy Siegel, and an arti­cle from the Wall Street Jour­nal about the oppor­tu­nity in income/dividend pay­ing stocks (as a gen­eral heading).

The Reces­sion is Over!
ECRI declares the reces­sion over with the US econ­omy track­ing up to 2.4% in the third quarter…

http://​www​.slate​.com/​i​d​/​2​2​2​2​7​42/

Source: Slate​.com/​W​a​s​h​i​n​g​ton Post

There is a great deal of skep­ti­cism about the econ­omy, and many mixed offer­ings in terms of opin­ion on out­look. The Slate​.com arti­cle, The Reces­sion is Over!, dis­cusses the con­trast­ing view of Lak­sh­man Achuthan, of ECRI (Eco­nomic Cycles Research Insti­tute), one of the most highly regarded inde­pen­dent econ­o­mists, known for a long list of accu­rate and pre­scient eco­nomic fore­casts, who points out that three sig­nif­i­cant lead­ing indi­ca­tors are cur­rently flash­ing green.

They’re (ECRI) the Spocks of the eco­nomic fore­cast­ing crowd—unemotional, unin­vested in any­thing but the logic of what his­tory and their dash­board tell them. “From our van­tage point, every week and every month our call is get­ting stronger, not weaker, includ­ing over the last few weeks,” says Achuthan. “The reces­sion is end­ing some­where this sum­mer.” In fact, it may already be over.

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Jeremy Siegel: ‘The Mar­ket Will Stage Another Recov­ery’,
Knowledge@Wharton, June 24, 2009

http://​knowl​edge​.whar​ton​.upenn​.edu/​a​r​t​i​c​l​e​.​c​f​m​?​a​r​t​i​c​l​e​i​d​=​2​267

Jeremy Siegel, Whar­ton School Pro­fes­sor, Direc­tor of Wis­dom Tree ETFs and author of the invest­ing clas­sic, Stocks for the Long Run, says that now that the reces­sion will not turn into a depres­sion call stocks are poised for a recovery.

Siegel: Well, of course, we had a tremen­dous down­turn from Jan­u­ary to March, a plunge. And we’ve had recov­ery back to those Jan­u­ary lev­els, basi­cally. So year-to-date, we’re sort of even on the mar­ket. Actu­ally, in Asia, we’re well above it. Mar­kets are about 20% higher than the year-end. For the emerg­ing mar­kets and the Asian mar­kets, there’s been a much bet­ter recov­ery, because there’s been a bet­ter eco­nomic recovery.

It’s always very hard to pre­dict the stock mar­ket. It’s cer­tainly tak­ing a breather now. I main­tain that if we can keep oil at the $70 level, and if inter­est rates on long-term bonds, 10-year bonds, don’t go much above 4%, the mar­ket will stage another recov­ery that could bring it up another 15% to 20% — really, by year-end. It’s hard to know exactly when that will take place. But I think peo­ple really see [that] the recov­ery is com­ing. Again, just like they were relieved that, “Oh, it’s not a depres­sion, it looks like it’s end­ing,” [they see] we are get­ting some recov­ery. I think if the [price of oil] and inter­est rates … remain sta­ble and low, we will put more money in stocks. There’s still over $4 tril­lion in money funds that are earn­ing about 1% or less, which is not as attrac­tive as rates that I believe could be moved into the mar­ket, once prospects of the recov­ery seem more certain.

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Bright Out­look for Income Investors
July 4, 2009 — Wall Street Jour­nal — By Tom Lau­ri­cella
Out of last year’s tur­moil in mar­kets a bright spot has emerged for investors look­ing for income — The pay­out on dividend-paying (or income-paying) stocks has gone up as a result of share prices falling fur­ther than payouts.

The main point of this arti­cle is that bat­tered high qual­ity div­i­dend stocks as well as gov­ern­ment bonds are now offer­ing higher real rates of return as a result of infla­tion run­ning at 2% or lower.

Yes, div­i­dends may have plunged — but share prices have fallen fur­ther. Trans­la­tion: The per­cent­age pay­out of many dividend-paying stocks has actu­ally gone up. Some tra­di­tional yield plays — such as util­i­ties — look attrac­tive. Bond funds, aside from U.S. gov­ern­ment bond funds, offer other options.

And investors shouldn’t dwell too much on yields that seem low. What mat­ters is how they com­pare to inflation.

“When investors see a yield of 4% or even 3.5%, it looks like a low-yield invest­ment,” says Fran Kin­niry, head of the invest­ment strat­egy group at Van­guard Group. “But with infla­tion run­ning at 2% or lower, the yields on fixed income or even equi­ties aren’t that poor.”

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