ASWA Seattle Chapter #9
Speaker Highlights
April 22, 2009
Investing in Uncertain Times
What Should Investors Do Now?
Presented by
Stephen Hollomon, CFM
First Vice President – Investments
PIA Program Portfolio Manager
(206) 464-2822
Stephen_Hollomon@ml.com
1. Strategize for taking losses
a. it makes a difference taxable vs. non-taxable investments
2. Fundamental principal
a. start taking losses now so you can have gains later
b. if stocks go down, not too over-weighted and still believe in story behind it buy more
c. if don’t believe in the story behind it anymore then get out
d. don’t be blind, be reasonable
3. Hedge fund correlation to equities
a. Hedge fund has 96% correlation to equities (S&P 500) over last 5 years and will be the same going forward
b. Going forward hedge funds risk of treasuries return of equities
c. Next bear market hedge funds won’t work
d. Real estate has 86% correlation to equities (S&P 500)
4. Diversify to spread risk
a. Protecting against risk & downside
b. Not for a profit but to protect against risk
c. Long-term treasuries
5. Everything regresses to its mean eventually
a. Country is creating demand
b. Instead of decreasing supply trying to create demand
c. He doesn’t like index funds because putting more money into growing companies instead of those that are decreasing and need growth
6. Investment strategies
a. Invest in companies that reinvest dividends – less volatility and great return
b. Stocks that pay dividends have tangible return
c. Reinvestment of dividends is ok but let them accumulate then reinvest in something promising
7. 3 keys to build long-term wealth
a. Diversity
b. Lengthen time horizons
c. Compound dividends
