At its eighth annual Marketing Wealth Management Services to High Net-Worth Individuals today and Friday, The Strategy Institute is offering education and networking.
This morning’s sessions began with a presentation by Donald Coxe, chairman of the board at Harris Investment Management Inc.
In his speech, Coxe pointed out that the landscape of the high net worth client is changing, along with the products they will invest in.
Coxe says that U.S. stocks will underperform global stocks for a few years and high net worth clients should move their money out of America. Many global investors are currently overweight in U.S. currency and U.S. stocks.
“The creation of the tech bubble ultimately created another one, — the U.S. dollar. Global investors felt that the U.S. had the best economy, best market, and best accounting. This week a KPMG study concluded that Asia emerging markets had more honest accounting than the U.S.,” he says.
Facts like this are influencing the way investors look at the United States. He suggests taking a closer look at the products in Canada.
“There’s an in-house bias, call it an inferiority complex, but investors think putting their money in the states is always better. The fact is U.S. companies are over priced and subject to selling,” he says.
Or investors can go for gold. Coxe also believes that gold is a good investment now, in fact it’s a bull market for the precious metal. When the U.S. dollar goes down, the price of gold will go up, he says.
“Another option that high net worth clients tend to favour is buying real estate. If that’s the case then get your clients to think about buying properties in Europe, not the U.S. hot spots such as Miami or Naples. This will be investors’ last chance to buy European property cheap,” says Coxe.
Think globally, and keep in mind that diversification is more important than ever.
But don’t get caught up in hedge funds. “Hedge funds are the newest bubble. The problem with them is a couple of things. The managers are young so they don’t have a track record. They all claim to outperform the market. Because they lever up they can do well in a bear market. Ask you clients, why do you have such faith in a relatively inexperienced manager who promises to outperform and borrow $10 million or $20 million. The fact is that you can lose that money. It’s important to know what you stand to lose,” he says.
Coxe says the key to managing the high net worth client begins with protecting the wealth they have and building up from there.
High Net Worth conference opens in Toronto
Move client money out of America says Harris chairman
- By: Laura Urmoneit
- May 30, 2002 May 30, 2002
- 10:40