FYI: Mohamed A. El-Erian is the chief economic advisor for Allianz SE. Before joining Allianz, Dr. El-Erian held positions as chief executive and co-chief investment officer of PIMCO and president and CEO of Harvard Management Company, the entity that manages Harvard’s endowment and related accounts. Dr. El-Erian was also a managing director at Salomon Smith Barney/Citigroup in London and spent 15 years with the International Monetary Fund in Washington, DC.
Dr. El-Erian has published widely on international economic and finance topics. His 2008 best-seller, When Markets Collide, was named a book of the year by The Economist, and one of the best business books of all time by The Independent (UK). He was one of Foreign Policy’s “Top 100 Global Thinkers” for four years in a row, and is a contributing editor for the Financial Times. His newest book – The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse – is another New York Times best-seller.
Regards,
Ted
https://www.advisorperspectives.com/articles/2017/11/15/mohamed-el-erian-which-asset-classes-are-most-vulnerable
Comments
Regards,
ted
El-Erian has been on the "policy stimulus takeover from central bank stimulus" kick for at least 6 years. I don't think he's wrong.
As for the exchange below, I would add preferred stock as a relatively illiquid market that could suffer in a market downturn.
With regard to liquidity, you wrote that investors have been “enticed to become increasingly exposed to historically illiquid asset class segments.” Are there any of those historically illiquid asset classes that investors should be wary of, because their liquidity will not withstand a market downturn?
Yes, those whose dedicated investor base is relatively narrow in comparison to the potentially more volatile “cross-over” money that has flowed in. As an illustration, this would include parts of the high yield corporate bond markets and certain segments of emerging markets.
Good he is not actually managing money any more.
Can’t see the house because of all the paint slopped on it. ... “Overkill” on El-Erian’s part.
A man out there in the blue riding on a smile and a shoe-shine. And when they stop smiling back, that’s an earthquake.
What got me thinking is the half-hour “infomercial” broadcast throughout northern Michigan by Centennial Advisors every Sunday morning. Michael Reese is a slick “advisor”/promoter, usually with one or two less articulate “associates” tagging along on the (paid-for) broadcast. The sales line never changes: (1) Mutual funds are too risky for seniors. Bad things can happen, (2) Come in and see us about our superior product (artfully dodging the “A” word), (3) To prove what nice guys we are, we’ll treat you to a free dinner while we talk.
In recent weeks these televised promotions have grown increasingly strident sounding. Appear really trying to frighten people and rope them in. I’m wondering if perhaps they’re attracting less money nowadays with public interest in the feverish equity markets so high? To top things off, I had a “cold call” (knock on the door) from a rep from Edward Jones last week. Turned the unexpected/unwanted visitor around and pointed them down the road quickly (in my usual diplomatic manner). Seem to be noticing more large ads from EJ in the area newspapers too (usually couched as “advice columns” - easy to see through).
Tough times for the financial advisory profession?
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After thought: Words can clarify. But they can also obsucate. I’m afraid that some well known financial “authorities” are using words for the second purpose.