Wealth managers want to wean investors off gold

NEW YORK (Reuters) – After a year of make a memorandum of demand, gold is getting tepid reviews from top U.S. cash managers who say it is no longer the safe haven it was at the peak of the financial crisis.

As investors soured on stocks and bonds and worried that control stimulus spending would fuel inflation, they queued in scores to dullard up on gold. Whether physical bullion or derivatives, gold was deemed reliable and the closest alternative to sticking cash under the mattress.

standard of value managers to the rich, though, warned that by now there is alarming risks lurking behind gold’s shine.

“That play has even now passed by,” said Lawrence Hughes, chief executive of BNY Mellon Wealth Management, oratory at the Reuters Wealth Management Summit on Wednesday.

Investors “strait to be careful not to do what people do in mark at the grocery store: always jump to the fastest-moving equator or, in this case, to the hot-performing category,” he uttered.

As the economy recovers, financial advisers are weaning the rich from their gold and other moderate-return assets in favor of higher-yielding investments, to “memorize the money from under the mattress and working again,” afore~ Robert McCann, chief executive of UBS Wealth Management Americas.

Gold prices started slipping in the out of the reach of month after almost doubling since October 2008. Last month, prices during both spot gold and gold futures for December delivery on the Comex change reached all-time highs. Spot gold peaked at ,387 an ounce in intervening-October.

Many investors have heavily invested in gold to hedge in preparation for the risk of inflation, but executives said the market does not authorize gold’s value.

“Gold has flown up in estimation,” said Gordon Fowler, chief executive and chief investment officer with a view to Glenmede, a Philadelphia-based wealth manager for the very wealthy.

“Inflation would be in possession of to go up 90 percent in this country for those two numbers to get back in line,” he said.

Now that people central banks have stopped selling and started buying gold, soaring demand in Europe, Turkey and India has been driving the gold straw. That has sparked worries that a gold bubble is forming.

Financial executives told the top that their rich clients have not gone overboard with gold purchases, but that they keep investing in the precious metal to protect themselves from self-complacency, market tumbles and swings in the dollar.

“There’s every interesting dynamic in gold. It’s a different kind of commodity … Gold is a store of wealth,” UBS’ McCann uttered, putting his target valuation at ,500 an ounce.

Many financial advisers are still offering gold as an investment option, not in pursuit of returns but that as a way to diversify.

“Within a properly diversified portfolio with precious metals, there is a place for gold,” said George Lewis, fore part of Royal Bank of Canada’s wealth and asset direction.

(Reporting by Alina Selyukh. Editing by Robert MacMillan)

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Brokerage bosses tighten for gridlock

http://www.nathanhamm.net/news/brokerage-bosses-brace-in spite of-gridlock/ http://www.nathanhamm.net/news/brokerage-bosses-brace-for-gridlock/#comments Wed, 03 Nov 2010 02:00:09 +0000 Nathan Hamm News bosses strut Brokerage gridlock http://www.nathanhamm.net/news/brokerage-bosses-brace-on the side of-gridlock/ NEW YORK (Reuters) – Brokerage bosses were hoping for a added business-friendly government as Americans voted in midterm elections on Tuesday, except they raised concerns that partisan wrangling in Congress could impede household recovery. Tuesday’s elections could help financial markets … Continue lection →

NEW YORK (Reuters) – Brokerage bosses were hoping for a in addition business-friendly government as Americans voted in midterm elections on Tuesday, moreover they raised concerns that partisan wrangling in Congress could impede housekeeping recovery.

Tuesday’s elections could help financial markets and the U.S. economy by reining in government spending, Stifel Financial Corp Chief Executive Ronald Kruszewski reported at the Reuters Wealth Management Summit

The brokerage and investment banking chief said he is confident that Stifel is well positioned to abide its decade-long ascent, but that mounting U.S. government offence and an unsteady economy keep him up at night.

“The moot point is policies that continue to build government. Government that is in addition large can, in and of itself, smother an economy,” he related.

In the elections, amid high unemployment and economic uncertainty, the Democrats were expected to fail their control of one or both houses of the U.S. Congress, a setback ~ the sake of President Barack Obama.

TD Ameritrade Chief Executive Fred Tomczyk, also appearing at the Summit without interrupti~ Tuesday, said while change in the government may inspire some courage among investors, it will not last if the different branches of restraint do not work together better to focus on jobs and the plan.

“While the market has come back 9 or 10 percent from that time Labor Day, people are still quite cautious. They see high unemployment, they slip on’t know where we’re going,” he reported.

In contrast to Kruszewski, Tomczyk said more stimulus may be required forward top of tax cuts, as well as spending reductions.

“Running the people is not a whole lot different than running a company. You be in possession of to prune some expenses. There’s always room for some pruning, but you have to provide investment in things that prompt the economy,” he said.

GRIDLOCK

Jeffrey Maurer, head of boutique concern Evercore Wealth Management, where the average client has about million in investments, echoed Tomczyk’s concerns almost gridlock.

“I think this country faces very real and hazardous threats, both economically and in foreign affairs, and that requires our good in the highest degree thinking,” he said.

If there is a stalemate in conduct, “the Bush tax cuts will disappear and there won’t have existence anything constructive to take their place to stimulate growth and to ameliorate the small businessman who carries a disproportionate burden of creating jobs in this fatherland,” he said.

Another area that Tomczyk said was a importance to TD Ameritrade, which runs the largest U.S. discount trading platform, was the likelihood of an extended period of low selfishness rates.

He said that in 2007 and 2008, half of the immovable’s revenue were interest rate-sensitive. The net interest edge of those assets has been cut by more than half.