It's Time To Rethink The Conventional Risk-Reward Investing Paradigm
Risk Is Only One Dimension Of A Security's Unpopularity (Morningstar)Investors should rethink the conventional split of low-risk/high-risk and instead consider a popularity spectrum, argues John Rekenthaler. Popular securities are defined as "those that people tend to like and therefore are willing to hold even if the returns are relatively modest." Advertisement
He adds that risk alone is not enough to account for a security's popularity, and suggests four other factors that contribute to unpopularity. The first and main factor he notes is "economic" or the possibility that a security "might not be able to make required current payments, that these payments might not prove as valuable as expected" or "that projected future payments might be less than anticipated."
Other sources of unpopularity include structure (or how the security is packaged), restrictions (the barriers to ownership), and behavioral (the psychological aspects of ownerships).Advisors Can Improve Their Presentation Skills In Several Ways (The Wall Street Journal)
There are several ways to improve your presentation skills. First, an advisor must deliver a concise message. Clients don't want to hear all the fancy words and details - they just want to know the bottom line."Be mindful of what time of the day you are speaking. Advisers need to adjust their energy depending on the hour. A morning audience is more alert and energized while an after-lunch presentation may require more audience interaction and energy from the adviser to keep everyone engaged," Karol Ward, a communication consultant, told the WSJ. Additionally, it's important to consider what people you are speaking to. Specifically, keep in mind the clients' income levels, how they spend money, and what they are concerned about. Adjust the details of your speech so that it applies specifically to them.Advertisement
There Are Still Plenty of Concerns About Investing In Chinese Companies (Financial Planning)
Many experts are still concerned over investing in China. They're nervous about the "lack of transparency, and warnings about a possible bank or property crisis" in China - and thus advise staying out for now.Additionally, Patricia Oey, a senior analyst and manager of research at Morningstar, warns that China is "'still a communist country,' where most large enterprises are still owned by the state - either the central or provincial governments - and as such they can often be 'asked to do things that are not necessarily for the good of shareholders.'"Advertisement
However, those still looking into China need to look at companies that "understand the Chinese consumer, and that address all the pent-up demand of the millions of new people entering middle class - the travel industry, financial services and education," according to Peter Engardio.Advertisement
Reuters records show that Morgan Stanley recently hired seven "high-producing" brokers in late August. All together at their previous companies of employment, they managed $1.9 billion and produced $9.5 million in annual revenue.
Morgan Stanley did not publicly announce this hire.