The Top Strategic Investment News Story For Financial Professionals In 2019

Fritz Meyer is calling for a crucial shift in long-term strategic investing. He's breaking with conventional wisdom and explains why in this 15-minute video for advisors. 

 

To be clear, financial planning software projections relied upon by professionals, as well as consumers, are seriously mistaken! Fritz's common sense approach to investing is on display. He makes a fact-filled and convincing case for replacing two of the seven asset classes of a classic broadly diversified portfolio: foreign and commodities.  A five-asset portfolio will be more efficient in the future, says Fritz, an independent economist whose CE classes for CFP®, CIMA® and CPA professionals educating advisors on economic fundamentals driving financial markets and received an average rating of 4.9 stars (out of five stars) over the past 12 months.   

 

The asset allocation problem has its roots in the 1980s, Fritz says, when the Japanese economic miracle that followed World War II came to a financial climax.  As a ¥1 yen investment in Japanese stocks grew nearly 40,000 times in value, the accepted wisdom understandably became that foreign stocks must be in a diversified portfolio. That's wrong! Though it has led to a widespread misapplication of Modern Portfolio Theory.

 

Astronomical returns on the Nikkei stock index made for a compelling story. Foreign stocks, by the late 1980s, were accepted by the world's largest institutional investors as a logical addition to a prudent portfolio. However, foreign equities have not worked well for long-term investors for the last 25 years, and that's a long time.  Nor have commodities, which were catapulted into orbit by their own unique fundamentals, and have fallen off the efficient frontier over 25 years, which is a long enough time to rethink conventional wisdom. 

 

A simple solution is replacing commodities and foreign with U.S. large- and small-caps. Along with real estate, large-cap and small-cap stocks are the main risk asset in a typical U.S. investor's portfolio. Making that shift would have boosted a diversified portfolio by 40%, according to Fritz.  

 

Abandoning conventional wisdom, Fritz Meyer's fact-based analysis on long-term strategic investing on Advisors4Advisors is for professionals guided by strategic application of enduring financial economic fundamental conditions and the knowledge to appreciate thought leadership. 

 

This 15-minute snippet of my interview with Fritz is a free sample of the continuing education A4A has provided since October 2008.   

 

Below Fritz's 15-minute presentation for advisors is a video introducing this topic to advisor clients and in RIA lead-generation campaigns. For more about the financial advisor news stream for consumers, schedule a time to speak.

     

 

 

 

Below is a consumer video for advisor websites about the shift in strategic asset allocation.

 

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