Weekly update - December 20, 2009

Stocks:
Tech led the Nasdaq higher but the Dow and S&P500 fell this week.
S&P500 closed at 1,102.47 down -0.36%.
Dow closed at 10,328.89 down -1.36%.
Nasdaq closed at 2,211.69 up 0.98%.

The yield curve flattened as long term bond yields fell and short term yields climbed. The 30-year dropped 4 bps to 4.46% and the 10-year shed 9 bps to 3.45%. The 6-month was flat at 0.14% and the 3-year gained 1 bp to 1.31%.

What to look for next week:
7:30am Tuesday - Q3 GDP Revision
9am Tuesday - Existing Home Sales
7:30am Wednesday - Personal Income & Outlays
9am Wednesday - New Home Sales
7:30am Thursday - Durable Goods Orders

(U.S. equity markets close early Thursday - 1pm eastern - and are closed Friday for the Christmas Holiday)

Weekly update - December 13, 2009

From weIMG newsletter:

Stocks:
US equities were mostly flat as the year end approaches. On the week:
S&P500 closed at 1,106.41 up 0.04%.
Dow closed at 10,471.50 up 0.80%.
Nasdaq closed at 2,190.31 down -0.18%.

Bond yields continue to tick higher. The 30-year gained 9 bps to 4.50% while the 10-year gained 6 bps to 3.54%.

What to look for next week:
7:30am Tuesday - Producer Price Index
8:15am Tuesday - Industrial Production
7:30am Wednesday - Consumer Price Index
7:30am Wednesday - Housing Starts
**1:15pm Wednesady - FOMC Announcement - "0% - 0.25% for an extended period" would be a safe bet.

Weekly update - December 6, 2009

From the weIMG newsletter:

The week that was:

After taking Thanksgiving week off, regulators shuttered six banks on Friday. The largest, AmTrust in Cleveland, had about $9 billion in assets and is the fourth largest bank to fall this year. In total the six banks had $13.4 billion in assets and the FDIC estimates that the loss to its insurance fund will be about $2.4 billion.

Stocks:U.S. equities continued their upward march this week, spurred on by economic data that continue to point to signs of a recovery. The major news this week was the employment situation. Only eleven thousand jobs were lost, compared to consensus of one hundred thousand. Beyond that, the unemployment rate actually ticked down, from 10.2% to 10.0%. Fears from the Dubai World default also subsided as it appears that the losses will be limited and it did not set off a chain reaction of defaults.
All this good news, or lack of bad news, sent the S&P500, Dow, and Nasdaq up 0.9%, 0.8%, and 2.6% respectively.
There was significant news in terms of M&A this week. Comcast and GE struck a deal for the former to acquire a majority stake in NBC Universal. See article attached regarding this deal. In addition, Apple acquired online music company Lala and Kraft bypassed Cadbury management and took its bid directly to shareholders.

Bonds:Yields jumped as Friday's employment report led investors to believe that the Fed may have to start tightening its monetary policy sooner than expected. The 30, 10, 5, and 2 year Treasury yields jumped 19, 27, 22, and 16 bps to 4.39%, 3.47%, 2.24%, and 0.84%, respectively. The three month yield doubled to 0.02%.

What to look for next week:
7:30am Thursday - International Trade Balance
7:30am Friday - Retail Sales
8:55am Friday - Consumer Sentiment

Weekly Recap - November 29, 2009

(from Chicago Booth Investment Management Group)

The week that was:

Bank regulators gave the industry a break and did not close any banks last week. Without a doubt, the major finance and investing news this week came from Dubai. Dubai World, the state-owned investment conglomerate, announced that it would delay debt payments. The announcement sent shockwaves around the world as it seemed to confirm fears of a bubble forming in emerging markets. On Thursday, while U.S. markets were closed for Thanksgiving, most equity markets around the world plunged about 3%. Safe trades dominated, strengthening reserve currencies of the US Dollar and the Japanese yen and sending credit default swaps substantially higher. When US markets opened for a shortened trading day on Friday, much of the panic had calmed and though US equities opened about 2% lower they ended the day about 1.7% lower than Wednesday's close. Europe's indexes recovered about 1% on Friday. Net global declines were notable on the week, but no catastrophic. See attached article #2 for a global summary.
On Sunday the UAE central bank announced that it would provide credit facilities to local and international banks in the Emirates.

What to look for next week:
9am Tuesday - ISM Manufacturing Index (55 consensus. A reading > 50 indicates growth)7:30am Friday - Employment Situation (consensus is for 100k job losses, and 10.2% unemployment rate)

Report on M&A activities

Source: IBD 06.01.09

Investor's Business Daily reports on June 1st edition that M&A activity is set to rise by the second half of 2009, citing midmarket experts who see an upsurge led by distress sales. The impact of credit crunch is still persistent, but fading away. 

Weekly recap - June 7 2009

from weIMG newsletter

The week that was:
It was all about unemployment this week. On Wednesday the ADP report came in line closely with expectations, but on Friday the official employment report showed that job losses slowed to just 345,000 from 539,000 the previous month. Enthusiasm for this improvement was tempered by the jump in the unemployment rate to 9.4%, the highest in 25 years. Remember those bank stress tests from a few weeks ago? Well, the unemployment rate used for the 'worst case scenario' was 8.9%. Oops. No wonder the Treasury is forcing banks to raise more capital than initially required following the stress tests.

Equities:
This week we saw a continuation of the rally that just won't die. On the week the S&P500 gained 2.3%, the Dow (with its new makeup - GM and Citi are out, Cisco and Travelers are in) gained 3.1%, and the Nasdaq climbed 4.2%. Year to date now only the Dow is in negative territory, but just barely, down .1%. The S&P500 and Nasdaq are up 4.1% and 17.3%, respectively.

Palm released the Pre this week, which it hopes will compete with the Iphone. Leading up to the release, the stock has been surging. PALM closed the week up 6.6% at 13.00, but is up a whopping 323% on the year.

Bonds:
Yields on Treasuries continue to push higher leading to speculation that the Fed may be compelled to restart purchasing long-dated securities to keep the yields low. The 30-year yield climbed 32bps to 4.66% and the 10-year climbed 39bps to 3.86%. Not surprisingly then, the aggregate bond index ETF fell about 2%.

What to look for next week:
Thursday 7:30am - Retail sales

Weekly recap

From the weIMG newsletter

The release of results from the long-awaited bank stress tests have been delayed until Thursday, but word has leaked that Citi needs another $10 billion. Three more banks were taken over Friday, one of which, Silverton Bank in Atlanta, could cost the FDIC $1.3 billion from its reserves. The first reading for Q1 GDP came in worse than expected at -6.1% (annual rate) versus consensus of 5.0%. Investors cheered the data however because of a significant decline in inventories indicating that companies will have to begin increasing output to keep up with demand.

Equities:
Stocks ended the week higher with the S&P500 up 1.3%, the Dow up 1.7% and the Nasdaq up 1.5%. On the year the S&P500 is down 2.8%, the Dow down 6.4% but the Nasdaq is up 9.0%. Some lucky investors were able to make almost 300% in a matter of a couple hours on Tuesday. Biotech company Dendreon was scheduled to release test results for a prostate cancer treatment drug at 12:30pm Tuesday. Minutes before the release a massive sell order hit the market immediately pushing the stock from $25 to under $8. The Nasdaq halted trading on the shares to investigate. The results of the drug turned out to be positive and the stock reopened in after hours Tuesday back at $25.

Bonds:
Yields on Treasuries jumped significantly this week as an appetite for risk began to lure investors away from risk-free assets. The 30-year ended the week yielding 4.09% and the 10-year ended at 3.17%. This marks the first time since mid-November that the 30-year yield has topped 4%. High yield bonds had a good week with the ETF JNK gaining 3%. At its current price this ETF yields about 15%.

What to look for next week:
Next week is slow as far as data are concerned. The most significant release will be Friday morning with the release of the employment situation for April. Consensus is for 630k new job losses, a slight improvement over last month's 663k losses. Consensus unemployment rate is 8.9%.

Weekly update - April 19 2009

from the weIMG newsletter

Fed chief Bernanke says we are seeing "green chutes" of economic growth, President Obama echoes that notion but warns there is still more pain ahead. A couple of these green chutes are growing from seeds of lower than expected new jobless claims and higher than expected consumer sentiment. The jobless claims still spell trouble ahead however as it is still north of 600 thousand. Some economists see the unemployment rate continuing to rise into 2010, even if the recession officially ends this year.

Goldman Sachs, JPMorgan Chase, Wells Fargo, and Citigroup have all trumpeted very strong earnings for the first quarter. There are caveats to these earnings however. Most, if not all, of the gains have arisen from trading activities while credit losses still mount even though the accounting rules have been relaxed. Continued profits from these activities are highly unlikely to be sustained going forward. Credit losses on the other hand will probably continue as foreclosures are beginning to mount among even good (non-subprime) borrowers. MIT professor Simon Johnson posted a good commentary on these bank earnings on his blog The Baseline Scenario. Read it here - http://baselinescenario.com/2009/04/16/new-day-new-bank-same-story/


Equities:
This week marked the sixth successive weeks of gains for equities. The Dow posted a 0.6% gain, the S&P500 climbed 1.5% and the tech-heavy Nasdaq rose 1.2%. Year to date the Dow and S&P500 are both down (7.4% and 3.7%, respectively), but the Nasdaq is up 6.1%. REIT stocks posted the strongest gain this week, up 5.5%; an interesting climb considering that General Growth Properties filed the one of the largest real estate bankruptcies in history on Thursday. Other strong performing classes included European stocks, up 4.7% and US corporate junk bonds, up 4.0%. This week's laggard was crude oil, down 3.7%.

The IPO market received a jolt Friday as Rosetta Stone, the language instruction provider, surged 40% on its first day of trading. Shares priced at $18 before trading in the open market and then quickly jumped to over $25 Friday, and climbed even higher to close at $28.25. The IPO is just the fourth in 2009, but three of those have occurred in April.

Bonds:
The aggregate bond market was little changed from last week's close, with the Barclays Aggregate Bond ETF up 0.2%. Treasuries were also mostly flat, making up some lost ground late in the week. The 10-year yield was flat closing the week at 2.93%, whereas the 30-year climbed slightly from 3.76% to 3.79%.

Weekly update - April 5, 2009

from the weIMG newletter

World leaders convened in London for the G20 summit and pledged to do whatever is necessary to fix the global economy. In the meantime, most media sources are trying to convince the public that the worst is behind us. On Friday the employment report came out and showed that an additional 663k jobs were lost in March, bringing the total losses to over 5 million and the unemployment rate to 8.5%, the worse in 25 years.

Equities
Stock indexes rallied significantly in March. The Dow, Nasdaq, and S&P500 were up 3.1%, 5.0%, and 3.3% for the week and 14%, 18%, and 15% for the month, respectively. The Nasdaq has even pulled into positive territory for 2009, up about 2%. The top corporate news for the week was an earnings blowout by BlackBerry maker Research in Motion and a looming bankruptcy for General Motors. RIMM stock surged 32% and GM lost 42%. As a BlackBerry owner with iPhone envy, your narrator is considering a short position in RIMM.

Bonds
Two weeks ago the Fed announced that it would begin purchasing long-dated Treasury securities, immediately sending yields down and prices up. The rally in the equities markets however has begun to entice some investors back into riskier investments. After briefly dipping below 3.5% the yield on the 30-year Treasury rebounded and closed the week at 3.72%. The yield on the 10-year also ended the week higher at 2.91%. The TED spread continues to fall, generally a good indicator for thawing credit markets. The spread currently stands at 96bps.


What to look for next week:
It is a slow week for economic data, but keep an eye out for the international trade balance on Thursday. Consensus is for net trade balance of $36 billion net deficit, a six year low. The slowing economy and strengthening dollar have resulted in US consumers buying up fewer imports.

New ETF - IQ Hedge Multi-Strategy (QAI)

The Vanguard of alternative investing is here. IndexIQ, the alternative investment ETF pioneer, has launched this week a new ETF, called the IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI).

According to the press release – available here – QAI seeks to replicate the returns on the IQ Multi-Strategy Index, before fees and expenses. The index attempts to replicate the risk-adjusted return characteristics of the collective hedge funds and uses multiple investment styles, including long/short equity, global macro, market neutral, event-driven, fixed income, arbitrage, and emerging markets.

The QAI is an ETF of ETF’s. According to the fact sheet, the ETF doesn’t invest directly in hedge funds, but rather in the underlying ETF’s , which the press release says they are widely available and liquid. The ETF will bring together the convenience of the ETF’s with the access to alternative investments.

Its top ten holdings are (as of 12/31/2008):

-                   AGG – iShares Lehman Aggregate Bond Fund – 21.57%

SHY – iShares Lehman 1-3 Year Treasury Bond Fund – 19.55%

EEM – iShares MSCI Emerging Markets Index Fund – 11.59%

HYG – iShares iBoxx       High Yield Corporate Bond Fund – 8.43%

BND – Vanguard Total Bond Market ETF – 6.38%

DBV – PowerShares DB G10 Currency Harvest Fund – 5.61%

SHV – iShares Lehman Short Treasury Bond Fund – 4.56%

JNK – SPDR Lehman High Yield  - 3.98%

EFA – iShares MSCI EAFE Index Fund – 2.93%

VWO – Vanguard ETF Emerging Markets – 2.92%

The Asset Allocation as of 12/31/2008

Short – term bonds – 28.56%

Broad bonds – 27.95%

International Equity – 17.44%

High Yield bonds – 12.41%

Currencies – 8.08%

Commodities – 1.7%

International bonds – 1.19%

TIPS bonds – 1.18%

US Equity (inverse) – 0.97%

Real Estate – 0.51%

The IQ Hedge MS index shows a correlation with the S&P 500 in the range of 0.20 (April ’07) to 0.82 (November ’08). The ETF itself seeks low correlation with the equity market.

Backtesting the ETF for the past 5 years shows that $10,000 invested five years ago have grown to about $13,500 today, in stark difference with the $9,700 you would get had you invested in the S&P 500 Index over the same period.

Some of the features and benefits:

• -       Seeks performance similar to overall hedge fund universe
  
• -       Seeks low correlation to equity markets
  
• -       Lower fees than the typical hedge funds
  
• -       Intra-day liquidity
  
• -       Portfolio transparency
  
• -       No manager-specific risks (although the underlying ETF’s have manager specific risk)
  
• -       Rules based approach
  

Index data:

Index Symbol – IQHGMS

Alpha (vs. S&P 500) – 6.7%

Beta (vs. S&P 500)  – 0.41

Sharpe Ratio – 0.43

Correlation (vs. S&P 500) – 0.73

 

 

Weekly update - March 8, 2009

From weIMG newsletter:

Employment numbers topped this week's economic news. Another 651,000 jobs (US, non-farm) were lost in February pushing the unemployment rate up to 8.1%, the worst since the Volcker recession of the early 1980's. A more broad gauge of unemployment which includes part-time workers seeking full-time employment puts the unemployment level at 14.8%. That's more than 1 of every 7 employable persons. Ouch.

In the meantime productivity is actually up. Anyone with a macroeconomics course under their belt should not be surprised by this. Employers slash the workforce and make remaining employees to produce more per employee. Eventually, these workers will demand additional compensation for their increased productivity, incomes go up, the AD curve shifts out, firms increase hiring, and we return to equilibrium. Sounds simple, right, but how long until it all unfolds?

Equities
Just how many new "worst weeks of 2009" will we have? Bank worries, unemployment numbers, continued housing troubles….take your pick, stocks just keep going down. Sparing the repetitive commentary, here is the weekly, year-to-date, and "from peak" performance of the major US indexes:

S&P500: week = -7.03%; YTD = -24.34%; from peak = -56.34%
Dow: week = -6.17%; YTD = -24.49%; from peak = -53.21%
Nasdaq: week = -6.10%; YTD = -17.96%; from peak** = -54.75%

**For the Nasdaq the "from peak" return is from October 2007; not from the high of the dot com bubble. The Nasdaq is currently down 74% from the bubble peak reached March 10, 2000.

Bonds
At least we have returned to normalcy in the Treasury market. Treasuries posted solid gains this week thanks to the turmoil in the equity markets. The yields on the 10 and 30 year fell to 2.83% and 3.50% from 3.04% and 3.72%, respectively.

The TED spread reflected investors' preference for safe Uncle Sam debt over that of corporations. The spread climbed to 110 basis points from 102 the prior week. For historical reference, the TED spread typically ranges from 20 to 50 basis points under normal conditions. It peaked over 450bps last October. Click the link below for TED spread chart, then click the 5 year button, it gives a pretty good indication of just what a mess we are in.
http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND

What to look for next week:
Capitulation…hopefully.
Thursday morning - Retail Sales - Consensus is for a drop of 0.5%. Did you know retail sales were actually up last month? It seems this positive nugget got buried by the other apocalyptic headlines.
Friday morning - Consumer Sentiment - Consensus is for a slight drop to 55 from 56 in January.
Friday morning - International Trade Gap - The net imbalance is expected to shrink from $40B in January to $38B for February.

Weekly update - February 21, 2009

from the weimg newsletter

The week that was:

Equities:
Yet another dismal week for equities. US markets were closed Monday in honor of President's Day, but on Tuesday they opened up about 2% down from Friday's close; and then they just steadily declined the rest of the week with a minor (about 1%) recovery in the last few hours of trading on Friday. Consensus seemed to be that the declines were due primarily to continued worries about the banks. Talk and rumors of nationalizing the banks picked up steam late in the week. On Friday, Senate Banking Chairman Chris Dodd even said that some banks may have to be taken over for a "short time."

Most big banks are hitting new lows. Citi (C) lost 22% on Friday to close at $1.95. In erratic trading, Bank of America lost only 4% to close at $3.79, but much higher than its intraday low of $2.53. Not even the great Oracle himself is immune - Berkshire A shares were down $1600 to $77,000 and have lost about 20% of their value already in 2009. This doesn't bother Mr. Buffet himself, he claims to pay no attention to the stock price (see article attached).

The tumultuous week brought the Dow to a new bear market low, a level not seen since 2002. The Nasdaq and S&P500 have a bit more room before hitting their lows of November 21 last year. By far this was the worst week yet of 2009, each of these indexes lost over 6%.

How is the rest of the world doing?
2009 Year to Date performance of major global indexes:
USA - S&P500: -15%
UK - FTSE: -12%
Germany - DAX: -17%
France - CAC: -15%
Japan - Nikkei: -16%
Hong Kong - Hang Seng: -12%
Singapore - Straits Times: -9%
India - Sensex: -8%

Treasuries:
Stocks go down treasuries go up. Treasury prices climbed higher pushing the yields on the 10 and 30 year notes down to 2.77% and 3.57% from 2.88% and 3.68% the prior week, respectively. Thus, not a good week for TBT and PST. The flight to safety has even pushed gold to over $1000 an ounce.

What to look for next week:
Thursday - Durable Goods Report
Friday - Consumer Sentiment and Revised Q4 GDP

Top Financial Advisers - Barron's Feb 9 2009

In this week’s issue of Barron’s, the focus is on the top financial advisers in the country. In times like these, it’s a good idea to see what the leaders in the financial advisory services are thinking and how they go about positioning their clients’ investments to take advantage of the downturn, and maybe the upturn, once the markets will turn around. For the past ten years, the stock market returns are zero. Where do we go from here and what financial instruments seem poised to gain in the next three to five years? Very few of the top financial advisers – the top ranked one in each state – advise investments in stocks; most of them favor high-quality corporate bonds, or Treasuries. If they do look into stocks, then the names most often used are the likes of Johnson & Johnson (ticker: JNJ), Coca Cola (KO), 3M (MMM) or Colgate-Palmolive (CL). These are the low-hanging fruits – safer securities offering good returns.

After the big scare of last year, the affluent investors are looking for this year? Transparency and liquidity, coupled with safety tend to be the choices of 2009.

Barron’s has profiled the top financial adviser in each state. Let’s go through the list and select the ones with good advice for us.

“If we can help clients by reaching out to other clients, we’ll do that”, says Robert Runkle of Merrill Lynch, representing Alabama. Connecting people is an important job of the financial adviser, as he brokers the information flow between his clients. As for an investment idea, Mr. Runkle likes high-quality corporate bonds.

From Alaska, the top performer is Tom Konop of Smith Barney. His advice is that “the guy in the suit may not be the one with the money” as his clients include fishermen, oil roughnecks, wilderness pilots and hunting guides. His recommendations are buying munis and selling Treasuries.

The Arizona representative, James Pupillo of Citi Institutional Consulting, lives by a simple rule: “If you can control the risk in portfolios, the returns will come.” He seeks opportunities overseas, where “many countries still need basic things like running water, electricity and telephone service”. “The businesses that innovate and deliver these products will prosper”, he says.

Mark Curtis of Smith Barney is a financial adviser from California. His advice is summed up this way: “Laser in on the client’s focus, and don’t get confused by how much money you will make on an individual investment.”

Timothy Kneen of UBS Financial Services is from Colorado and his focus is on low-correlated assets, investments that are unlikely to move in the same direction simultaneously. His belief is “regression to the mean”, where returns will come back to their averages over time. He thinks that emerging markets and high-grade corporate bonds are due for a rebound.

Jeff Erdmann of Merrill Lynch – Connecticut – starts every conversation with an in-depth lifestyle and cash-flow analysis. Reduce your book your business to include smaller number of families in order to develop deeper relationships with them. Always ask about their children, to see the family dynamics.

Marvin McIntyre, Smith Barney – District of Columbia – “To do your job right, you have to be an extraordinary listener. You have to have empathy for your client.” The conversations go beyond investing, from finding a summer job for a kid or a contractor for a house renovation. Preserving wealth is job #1. “One of the most important things we want to do is protect the client’s lifestyle.” “We start by giving the client sufficient cash flow to retire. Whatever else happens on the growth side isn’t devastating if it doesn’t work in the short term.”

Louis Chiavacci, Merrill Lynch – Florida – Work in teams, with a tax expert and a bond specialist. Disclosure is key, make sure the clients understand every element of risk.

James Hansberger, Smith Barney – Georgia – “All growth in my life has come from adversity.” “Just because there has been a tremendous storm in the markets, you don’t get away from the basics.” Investors should focus on businesses which are able to build their businesses from good cash flow and low debt levels. Some companies in the biotech and data-processing areas fit that profile and could provide excellent returns in the next few years.

Mike Strada, Morgan Stanley – Hawaii – “If you think it might be time to reduce sail, you should already be up there doing it.”

Robert Rathbone, Wachovia Securities, Idaho – specialized in fee-based asset management, builds in depth client relationship and steers clear of the commission-based business of selling individual stocks. Today’s environment offers investors and aspiring advisers a rare opportunity, because the prices so low that the market looks poised for dramatic appreciation, comparable to the years following 1974 and 1981. “somebody getting into the business now has a high probability of looking good in five to ten years.”

Scott Magnesen, Morgan Stanley, Illinois – serves more than 3,000 families. His philosophy: think long term and invest in high-quality instruments: Treasuries, top-notch bonds, mutual funds, utilities and blue-chip stocks. Each time a CD approaches maturity, Magnesen picks up the phone and calls the client. “Bad decisions are made in volatile markets. When the market turns, it will reward you in spades.”

John Cooke, Wachovia Securities – Indiana – His clients get rigorous net-worth assessments twice a year. “We make sure that the clients are diversified, have high-quality investments, and that the managers we are using for them don’t have any problems.””It has been one of the scariest years for anyone in the profession. But during these times, your clients need you even more.”

Edmund Nasief Jr., UBS Financial Services, Kentucky – advisers and their clients often have much in common, they are in sync. Today’s events in the market will scar investors for long time, just as the Great Depression did in the 1930’s.

Kevin Knobloch, JP Morgan, Louisiana – “Diversification in the past four months didn’t work, unless you were in Treasuries or cash.””That doesn’t mean asset allocation is a failed theory. We’ll see it work once again.”

Michael Boyson, Smith Barney, Maine – “Long term, we find the prices of great companies here pretty attractive. But credit has to come back before stocks can come back”

Tom Hill, Smith Barney, Maryland – Inflation is coming, not this year, or the next, but it will come. “Corporate America is on sale.” His prediction: Stocks will bottom in the spring, ahead of a fourth-quarter economic recovery.

Raj Sharma, Merrill Lynch, Massachusetts – sees opportunities in credit markets, dividend-paying stocks and energy, tech and emerging-market shares. “Our job is not to make clients wealthy. Our job is to make sure they stay wealthy.”

Robert Stulberg, Merrill Lynch, Michigan – keeps as low a profile as possible; takes customers only by referral and concentrates only on an unglamorous investment niche: municipal bonds. Very discrete, he goes to extreme lengths to protect investors’ privacy. “Your doctor is your most important professional relationship. We’re next.”

Peter Eckerline, Merrill Lynch, Minnesota – used to sell peepholes for three months before joining Merrill Lynch, to get used to rejection. Now, he is trying to be a partner to his clients, helping them to do everything from picking a car to starting an effective charity. The market crash has strengthened his client relationships. Lately he favors municipal bonds, which he thinks provide attractive yields, and Treasury inflation-protected securities.

Michael Dowell, Smith Barney, Mississippi – his secret is to understand the nooks and crannies of each client’s finances. Check the facts of each financial instrument of your client. He has long favored fixed-income instruments, beginning two years ago to recommend managed futures accounts that capped losses at single digits.

Andrew Laszlo, Morgan Stanley, Montana – “I prefer to deal with good and interesting customers, not just people with money.”

Ron Carson, Carson Wealth Management, Nebraska – adheres to fundamentals, but uses some technical analysis, especially of insider transactions. He says, “Technical information simply tells you about the fundamental information that is not widely known to the marketplace”

Tom Sedoric, Wachovia Securities, New Hampshire – dual degree in finance and psychology. Everyone thinks they’re risk tolerant investor until a bear market. People should be honest with themselves when it comes about money.

Richard Mercil, Merrill Lynch, North Dakota – preaches a methodical approach with clients, educating them on potential scenarios and options. Continue to educate, and you’ll win.

August Cenname, Merrill Lynch, Ohio – “When people are lost in the jungle, they realize they need a guide.” People don’t need a guide through a walk in the park. Now, he is taking a defensive approach to managing clients’ investments. Preserve wealth and generate cash flow. Growth is not a realistic expectation now. Hosting family meetings for clients, to get everyone together and talking.

Joey Sager, Wachovia Securities, Oklahoma – “We’d love to beat the market, but that’s secondary to meeting our clients’ expectations.”

Steve Spence, UBS Financial Services – drawing from his experience negotiating the sale of publicly traded companies, he views each portfolio transaction like a corporate acquisition, by how much cash the investment can generate. Started buying beaten-up oil stocks in November.

Saly Glassman, Merrill Lynch, Pennsylvania – “Clients are interested in preserving their wealth and leaving a legacy.”

Robert Vingi, Wachovia Securities, South Carolina – helping clients doesn’t necessarily mean investing their money. He will advise the clients to pay down debt and build a cash cushion before they invest with him. He likes TIPS and bonds with maturities of five years or less. He also likes gold as an inflation hedge, and finds munis an “incredible bargain”. He also likes oil, other metals and other heavy equipment makers. He tries to identify themes, and ideas that are actionable on those themes.

Gordon Wollman, Cornerstone Financial, South Dakota – maintains client loyalty with monthly seminars and frequent email communications. “Every time the market takes a big dip, we send out some type of communication to let clients know what we are suggesting they do.”

Michael Gilbert, Gilbert Advanced Asset, Tennessee – shifted clients into corporate bonds, and bought into the S&P 500 index. “If you can keep your hands off your portfolio for 10 years, you’ll probably outperform everybody.”

William Corbellini, Merrill Lynch, Texas – forged relationships with investment bankers. His game plan: determine the cash-flow needs, then nail the asset allocation. In current market, underweight financials and overweight defensive stocks, such as consumer staples. “By the time this recession is declared officially over, the great majority of the rise in stock prices will have already occurred.”

John van Wagoner, Merrill Lynch, Utah – his job is about asking questions and listening, diagnosing clients’ needs and then prescribing. His guardedly optimistic prognosis for the economy calls for a bumpy ride nevertheless, but a recovery should be in place by year-end. His advice: keep 6-12 months of liquidity needs in cash; focus on yield through high-quality bonds and dividend-paying stocks.

Tom Wilkins, Merrill Lynch, Vermont – “I try to keep the investment very simple, so that clients can understand.”

Phil Scott, Merrill Lynch, Washington – “investors get myopic” they believe that the markets continue their downtrend and they lose all their money. “Things are cheap, but they might get cheaper. It’s a good time to look, so long as you think longer-term”

Casey Robinson, Morgan Stanley, West Virginia – “returning phone calls and responding to clients’ fears are vital in the current market. Basic compassion, he says, can go a long way. “You have to be able to relate proper decision-making in terms the clients are comfortable with, and be prepared to address their emotions.”

Andrew Burish, UBS Financial Services, Wisconsin – “We try to produce an absolute return, so we don’t care what S&P 500 is doing.” He says there is a bubble in Treasuries, so he is moving his clients into high-grade corporate bonds.