|Quote, originally posted by marzen »|
combine (a number of things) into a single more effective or coherent whole:
I said, "Consolidating shares means, moving it to other means to protect your assets such as precious metals."
Which is well with the encyclopedic definition of the term as above.
lol, My old man, for sometime, received numerous calls from so called Financial Advisors. They said he should invest in this or that. He simply asked them to show him how well their own portfolio is doing. None of them was able to. Till this day, Gold and Silver takes up huge part of his assets. Price of Gold and Silver rose vs US dollar as value of US dollar fell, which is why it mirrors the inflation. One ounce of Gold will buy me more US dollars after one year than any 12monts CD ever will at this point. So I am not sure what your point is here.
Again, you are leaving off all other comments and tackling me on municipal bonds that E*trade sold. Correct, it is their business. They may have sold them in order to raise capital. I was quoting the fact as they unloaded about $3 billion of mortgage-backed security and municipal bonds. But the fact remains, many people have consolidated shares into more stable assets such as precious metals and moved their money far away from financial stocks. I am not sure what is there to argue.
So tell me, your version of the story as to why MBIA cut the dividend by 62% to raise $1 billion? BTW, MBIA is a bond insurer. Are you saying that this insurer needed $1bill just for sheits and giggles? Truth is they have no idea who far the loss will go. They are not set up to absorb the type of loss we are seeing in the market. That a simple fact.
I am curious. How long have you been in finance business?
Defend your choice of consolidation all you like, even your definition of consolidation has nothing to do with diversification or tactical re-allocation, in fact it means quite the opposite, both in the dictionary and in every financiers vocabulary.
As for your old man, depends on who he talks to I suppose. Why can't they show a portfolio? That is very easy in most cases. Very few advisors out there are picking and managing stock funds, so there is no "portfolio" per se. They generally use menu's of different vehicles and combine them in different ways depending on the client. An example is sometimes a client benefits from an annuity, many other times it is not even a remotely valuable tool. Sometimes mutual funds work, others no. Sometimes pure Muni's. Its a loaded question. Not only that, it is also a known rule that someone who hires on performance is a bad client, because they will be comparing your future performance to cherry picked results in the future and to others falses promises. What you should look for in a FA's performance is how they compared to the benchmark in both regards. What percent of the upside AND downside did they capture.
-If I were to manage a portfolio for a client and the market did -20%, +10%, +20%, -20%, -15% and my performance was -10, +8, +16, -12, -5. I would say he did very well despite never outperforming the good years.
As for your gold buying more than a CD in 12 months, thats just completely incorrect. A CD generally returns 4-6% in the last few years. Gold has done very well over the same period, however look at historic returns. The 50 year return on gold is 2.2%, not looking so good now, average on a CD or TBill is 5.88%. Oh, and another thing is that there is no risk in a TBill or CD to speak of, gold does have risk.
People moving money away from financial stocks is relevant to the market as a whole how? It is ONE sector of the market. Also, if you think financial stocks are that bad, I will bet you that they will be one of the best buys come mid summer when MER, GS, C are all selling at a discount when the reality is that most of these banks are not nearly as badly hurt as the common pleb thinks.
As for MBIA, I could care less why they raised the money, for all I know the CEO needed a new golden urinal. Doesn't matter, because they are not the carrier of the indenture. They are hedged, just like everyone else, and in the indemnity business, that is done through reinsurance. Same way when Katrina rolled through, Statefarm didn't go out of business with 7 billion in claims when they had 20% of that in reserve. More importantly, your idea that bond insurance companies will fail to pay is ludicrous, it is not going to happen, and if it does, the world as a WHOLE is fubar.
I have been in financial services now for 7 years, but frankly, this stuff is basic, so it is hardly relevant.
Resume doom n' gloom.