Wealth Management Media Scan: What Consumer Financial Publications Wrote about This Week

By Raab, Marian | American Banker, August 7, 2007 | Go to article overview

Wealth Management Media Scan: What Consumer Financial Publications Wrote about This Week


Raab, Marian, American Banker


Price of Admission

Bankrate.com takes a look at whether consumers should let banks or traditional brokerages manage their money as their net worth increases.

The Web site advises consumers to "look for an institution that has experts who can handle your needs. If you need tax planning, retirement planning, or advice on stock options, make sure the bank can provide that."

It also notes that banks are creating new levels of service for the mass affluent. "Where once it took $10 million to be welcomed into a bank's private banking enclave, there are now multiple tiers for the mass affluent, the high net worth ($250,000 to $2 million) and the ultrahigh net worth ($10 million+) categories," the Web site explains.

Don't Pack Up Yet

The end of the leveraged-buyout boom has made the stock market more volatile and the effect could linger, according to a Barron's cover story published right after the stock market tumbled in late July.

But now is not the time to throw in the towel on U.S. stocks, the magazine reports, quoting Bryon Wein, the chief investment strategist at Pequot Capital Management. "The year will turn out all right," Mr. Wein said, predicting that the Standard & Poor's could hit 1,600.

The good news is that stocks tend to track earnings and corporate profits are generally robust. Plus, U.S. companies are raising dividends and buying back record amounts of stock.

Meanwhile, the global economy is strong, Barron's says. Full-year earnings at S&P index companies are apt to increase about 8%, it said.

Focus on Quality

So what should investors do now, asks Kiplinger's Personal Finance.

Though no one can consistently foretell the short-term fluctuations of the market, it's a good bet that volatility will remain a constant over the next several months, the magazine says. "In all likelihood, the market will continue to gyrate wildly because of conflicting currents running through the economy, " it says.

How should investors approach stocks in this environment? Quality, defensive domestic companies with good earnings visibility, such as Comcast, CVS/Caremark, and Walgreen should hold their value, Kiplinger's says.

Defensive stocks with large overseas exposure also look attractive. In addition, tech, energy, and infrastructure companies such as IBM, Schlumberger, and United Technologies, which generate the bulk of revenues from overseas, should continue to flourish, the magazine says.

Time to Think Large

For those who prefer mutual funds, MarketWatch.com says the megacap sector is a good bet right now.

That's because shares of big U.S. companies are outperforming smaller stocks and holding strong against rising volatility. And the giants of the group - the so-called megacaps - are faring best of all.

It is a leadership change that many investment strategists have expected, billing these well-known companies with market valuations above $50 billion as real bargains. "This is the time you want to own large cap," said James Swanson, chief investment strategist at MFS Investment Management. …

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