Richard Emmons discusses the importance of “reading your audience” to know when someone doesn’t “get it” so you can explain the concept again. Anyone left behind in the presentation is much less likely to sign up for a first appointment.
For more seminar marketing ideas go to http://www.MyLivingTrustSeminar.com.
Richard Emmons tells financial advisors how to expand their practices with successful community seminars. The 3 keys to successful seminars are
For more seminar marketing ideas go to www.MyLivingTrustSeminar.com.
Your clients want decent returns and to avoid losses. So where do you put their money? What’s hot one year may be cold as ice the next year. Hence the caveat that “past performance is no guarantee of future results.” Yet when investing for the long-term, it can pay to listen to those who made correct long-term calls in the past. Today’s guest columnist Bill Bonner made a dead-on long-term call 10 years ago…and he just made another for our new decade.
The Last Shall Be First
By Bill Bonner
01/22/10 Paris, France – The yen is falling. It’s down 5% against the dollar since November. Investors are finally noticing. With a deficit of 50% of GDP, the Japanese government walks where angels fear to tread. Americans aren’t far behind. To make a long story short, our money is on the angels.
Only an economist would dare to look 10 years ahead. Only a fool would put money on it. Today, we do both. But our new “Trade of the Decade,” is not so much a look into the future as it is a look at the past.
Ten years ago, your humble correspondent offered his first ‘Trade of the Decade.’ He should have stopped there, for the trade was a big success. It was a simpleton’s trade: Sell US stocks/buy gold. That was in the year 2000. At that time, US stocks had been going up for the previous 18 years, multiplying investors’ money 11 times. By then, stocks had been going up for so long that the memory of man ranneth not to the contrary. Investors’ imaginations saw no alternative. Stocks for the Long Run was the title of a popular book. It was also an investment formula that seemed unbeatable.
Alas, the formula proved beatable. It was time for stocks to go the other way. The first decade of the 21st century proved to be the worst time to hold stocks since the ’30s. Net returns were negative – especially when adjusted for inflation. Adjusted to the CPI, the Dow ended the decade down 40%.
The other side of the trade – the buy side – was just as simpleminded. Gold hit a high over $800 in 1980. Then, it slipped for the next 20 years. It didn’t come to rest until September 1999 at $260. That was the famous “Brown Bottom” in the yellow metal…when the then chancellor of the exchequer, Gordon Brown, sold Britain’s gold at the lowest price in two decades. (To bring readers up to date, now Mr. Brown applies his vision and energy to Britain’s economic recovery efforts.)
Gold is real money. But in the years when gold was being beaten down, other forms of money were running wild. Financial assets mushroomed all over the globe. A whole new ‘shadow banking’ system emerged…with new financial instruments, representing trillions…no, hundreds of trillions…of dollars. Prices on everything were soaring – equity, debt, real property. It did not take a genius to see that gold would have to catch up, sooner or later. As it turned out, no major asset class did better. Gold finished every single year higher than the year before. It doubled. Then, it doubled again.
What made the trade a success was neither clairvoyance nor omniscience; it was merely an observation known as ‘regression to the mean.’ The word ‘normal’ has been in the dictionary for a long time. It must be there for a reason. What it describes is where things tend to go when they’ve gotten out of whack. Regression to the mean is so powerful, no one escapes it. For every decade of walking around time, a person spends a million years dead. Over a century, practically every human regresses to the grave. So, what is so abnormal now that regression to the mean is as certain as death?
Almost all investments are expensive by most historical measures. But if all go down, what will they go down against? Money! That’s why real money – gold – is likely to go up again in the next 10 years. But gold is not cheap. It rose nearly 400% over the last 10 years and now is fairly priced. Gold in the treasure trove found in England last year is worth today about the same thing it was when it was buried 12 centuries ago. It cannot regress to the mean; it is already there.
On the buy side, we are looking for an investment that is despised…not one that is admired. And so, back to Japan, where equities peaked out in 1990 and have been going down ever since. While the Japanese government wanders among the stars, the private sector has dropped back to the ground. Or beneath it. Tokyo-listed stocks have lost 75% of their value, wiping out an entire generation worth of growth. Many Japanese companies sell for less than the value of their current net assets.
And now, after twenty years, Japan’s private businesses are finally benefiting from the stimulus programs. The government will go broke, but by destroying its own credit, Japan cuts the value of the yen and boosts profits for its exporters. Toyota’s local labor costs – in dollar terms – fell 5% in the last three months. And by the time the catastrophe is complete, Japan’s businesses could be the most competitive in the world. One way or another, 10 years from now, we’ll wager that Japanese stocks will be higher…if only relative to the rest of the world’s equities.
But of all the whack that investments might be out of, US Treasury debt stands above them all. For the last 27 years, the US government’s cost of borrowing has gone down. But while bond yields declined, the quantity of US debt exploded. Official, on-the-books debt trebled. Include off the books, unfunded financial obligations and the total reaches $118 trillion – 8 times GDP. And now the explosions come every month. As the depression continues, US deficit-financing needs could rise to $150 billion every 30 days. So far, the bond market has absorbed the shocks with good grace. But sometime in the next 10 years, the angels are bound to be proven right.
Sell US Treasury bonds. Buy Japanese stocks.
for The Daily Reckoning
Well, there you have it: Buy Japan and Sell Treasuries. We’ll all see how it all turns out in 2020.
For more insights on investments and the economy with a contrarian and witty twist, click through and subscribe to the Daily Reckoning e-zine.
To get anywhere in life you need to know where you want to get to, you need a road map to show you the path to take and then you need to do the most important thing: Take the first step!
In this short video Richard encourages you to create a one page business plan using Jim Horan’s book, The One Page Business Plan. This is the best “first step” you can take for a successful 2010. You can read my review of this outstanding book here.
You’re an independent financial advisor. You want to expand your practice. Should you get going today and “just do it”?
For most advisors, the answer is “No.” Why is this?
Because you’ll probably end up wasting time and money and the effort will not succeed. Ouch.
I tell my clients that there is no magic marketing bullet which can easily and instantly expand your practice. I tell this to prospects because I don’t want a client with unrealistic expectations. Do you?
Imagine “Bob” calls your office for an initial consult. After introductions, you ask him what he wants you to do for him. Bob says with a straight face, “I lost 40% of my retirement portfolio when the market tanked. My current advisor pulled it out at the bottom so I missed the bounce. I want you to make up my losses in the next year. Can you do it?”
He throws his quarterly statement on your desk and you notice he has a million dollars in his account. Nice.
Time to bring Bob back down to earth, “Do you realize that making up a 40% drop in one year would require earning 67% on your money?”
Bob looks shocked. “I don’t want to take on that kind of risk at my age. What are my options?”
You explain how some combination of more time and more money can get his retirement portfolio back where it was. “You can increase your monthly contributions to the max and stretch out your time horizon to 5 years. This eliminates the need to use risky investments so you’re much more likely to reach your goal.”
Bob likes the sound of this and you land the account. Congratulations!
Now what does this story have to do with growing your practice?
If Bob had pressed you a bit, you might tell him there are no magic bullet investments that give high returns quickly with low risk. The same thing is true in the marketing world. With one important difference.
Making such bold promises as a financial advisor can land you in an arbitration hearing. Making bold promises as an ad rep helps land the account and make the sale. Ever hear of a newspaper giving a refund when no one attends your open house? Me neither.
Magic Bullet Marketing activities can include:
Almost any unproven, untested marketing activity done in haste qualifies as a magic bullet marketing activity. Or anything requiring “just a few minutes of your time and your major credit card….”
So the moral to the story is that expanding your practice takes time and money.
You can save time by hiring someone to help you get it done. Or you can invest your time and do it yourself when money’s tight.
I’d love to hear your comments on ‘magic bullet marketing’ efforts. Did you hit your target? Or fire a blank?
If you ran into an old buddy at your high school reunion, you’d probably be asked, “So what do you do?”
As an independent financial advisor, you have several ways to answer the question. What comes to mind first?
“I am a certified financial planner.” Or “I am a financial advisor.”
If he was curious to learn more, you might describe your approach to financial planning, estate planning, or risk analysis. You might talk about the financial markets, indexed annuities, or CD rates. You might mention the value of annual reviews and portfolio re-balancing.
This answer focuses on the main operational focus of your firm. It touches on your education, experience and what’s on your business card.
Yet in a big way you’d be wrong!
While you might really rather focus on planning all day long and every day of the week, the reality is that you need to see yourself as a “Marketeer.”
Just what is a “Marketeer”?
A “Marketeer” focuses on defining, reaching and serving his target market. This is job #1.
A Marketeer sees every aspect of his business as a way to enhance (or detract) from defining, reach and serving his targeted market. What does this look like?
Think the last bullet is a joke? Let’s take a closer look at this one.
If you only get one chance to make a good first impression, your receptionist will likely be the person to make it.
Will your clients care if she knows the ins and outs of six major phone systems? Or types 100 words a minute? Or has a degree in business from your local community college?
None of this matters if your receptionist greets your office visitors with a frown or a grunt.
If your receptionist has to “turn on the charm” because her default position is “strictly business” you have a problem in the making.
Your receptionist ought to care enough about people to chit chat while the client waits. Perhaps offers some coffee, tea or water upon their arrival. Ideally she knows what they like to drink and gets it without asking.
This does several things for you:
Of course knowing your phone system inside and out can help your receptionist better connect you to your clients. And typing 100 words per minute can keep your files up to date. And a business degree might bring new ideas into your practice and enhance customer service.
Yet do these things really matter if your receptionist greets visitors with a frown for a split second before the smile kicks in? Or makes callers wish you had a direct dial number so they didn’t need to “bother” the receptionist when they had a question?
In short, your marketing mindset causes you to hire the right person for every job, train them to know what’s really important (treating people kindly and with respect), and the all-importance of supporting the marketing vision of the firm.
When you develop a marketing mindset, you’ll view every aspect of your firm from the eyes of an A-List client. You’ll see many areas to improve:
I think you get the idea. A marketing mindset, once developed, can liberate you from the administrivia which drains time and energy and keeps you from growing your practice and turning your clients into raving fans.
Yes, your business card should say “Certified Financial Planner Professional” or “Financial Consultant” or “Financial Advisor.”
Be sure to give one to your friend at your high school reunion.
But tell him, you “help baby boomers plan for and enjoy a prosperous retirement” or however you benefit your targeted clientele.