The global economy remains fragile as the effects of massive wealth destruction and the unwinding of a huge debt bubble continue to play out
Irvine, CA (Vocus) July 28, 2009
The Keller Group Investment Management, Inc. - listed among the nation's top wealth managers by Wealth Manager Magazine's August 2009 issue - said its investors will be well-positioned to weather the on-going downturn after an encouraging second quarter in which the firm's growth composite did considerably better than the market benchmark.
"In even our most optimistic scenarios, we expect returns from stocks and bonds over the next five years to be mediocre and likely to stay in the single digits for typical stock and bond allocations," said Victoria Collins, executive vice president of The Keller Group. "That's why we're taking asset allocation to a new level now."
The firm expressed confidence in its ability to transition portfolios to the "endowment model" favored by universities and private foundations, which will allow it to branch out beyond stocks and bonds and add asset classes that are more "market neutral," such as real estate, commodities and other alternative investments that should reduce risk yet provide solid returns.
According to John Hakopian, president of The Keller Group, the firm has already enjoyed strong returns from its tactical position in high-yield bonds. While it may reduce these holdings somewhat, it will still have positions that are expected to continue adding value. In addition to these tactical asset class moves, the firm's bond managers are using their flexibility to take advantage of undervalued areas of the bond market when they consider the long-term opportunity to be sufficiently compelling.
Though not concerned about imminent inflation, The Keller Group is considering asset classes such as Treasury Inflation-Protected Securities (TIPS) and commodities that could help protect its client portfolios in the case of a declining dollar and/or increased inflation. The firm said it believes that prudence is called for given the current high level of uncertainty in the economy and financial markets. But it expressed faith that good investment opportunities still exist and it is working hard to identify and take advantage of those opportunities.
At its low on March 9, the market was priced for a possible depression, now it is priced for the reality of a recession. The prospect of a meltdown of the financial system appears past; the government has demonstrated it will do whatever is necessary to avoid a disaster of that scale.
"The global economy remains fragile as the effects of massive wealth destruction and the unwinding of a huge debt bubble continue to play out," said Collins. "The ultimate result will likely be lower spending by both consumers and businesses in the years ahead."
About First Foundation Inc.
First Foundation Inc. is a private financial firm that offers seamless banking, estate planning, wealth management, philanthropic consulting and trust services. This full-service firm provides complete financial management through its affiliates:
The Keller Group Investment Management, Inc - a Registered Investment Advisor (RIA) providing investment management and financial planning services to high net worth families, trusts and business entities with minimum account size of $500,000.
First Foundation Bank - a federally chartered bank that offers FDIC-insured deposit accounts, business, personal and commercial lending, insurance services and trust management;
First Foundation Advisors - a group of consultants offering estate, investment management and philanthropic strategic planning to families and individuals who have a net worth exceeding $10 million.
First Foundation's goal is to offer clients a single source of expertise for their investments, financial planning, insurance, tax planning, estate planning, and other financial needs. Additional information is available http://www.firstfoundationinc.com.
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