Highlights of NAPFA 2009 Investments Conference Day 1


On a blustery cool day in St. Petersburg Florida, as the nation got ready to inaugurate a new president, a couple hundred members of The National Association of Personal Financial Advisors (NAPFA) gathered for their first ever conference dedicated exclusively to investments.  Chaired by Carolyn McClanahan, the 2009 Investments Conference is also one of the first conferences that was mostly coordinated by NAPFA staff with the help of the committee.  All indications are that they’ve put together a winning lineup (see agenda).

Held at the historic Renaissance Vinoy, two three-hour pre-conferences kicked things off: one was a bond investing workshop and another entitled “The Business of Managing Money”.  I attended the bond investing workshop presented by David Summers CFA,  Managing Director of YieldQuest Securities.  The material flew by so fast that it probably would have taken two days to cover the material adequately.

Despite being a CPA, I never realized that municipalities actually issue fully taxable municipal bonds (that is, not just subject to the alternative minimum tax.)  David suggested that this is an excellent time to be investing in investment grade municipal bonds, though his (very expensive) Bloomberg terminal gave him more data on muni’s than we could ever get our hands on.  He also cautioned us to watch out for certain exchange traded funds (ETFs), specifically some commodity and currency funds, that might not be issued by registered investment companies, and may surprise investors with a partnership Schedule K-1 rather than a 1099.  As always, read the prospectus prior to investing to avoid surprises.

On such a historic day in our country, it would have been a shame to miss the inauguration of President Obama.  There was no need to miss it since the committee factored this in and set up lunch in a room with a large screen for everyone to watch.  I don’t have to tell anyone who watched it how special and moving President Obama’s speech was.  I felt so proud to be an American on this very emotional day for our nation.

Next up, with a tough act to follow, was Zanny Minton-Beddoes, Economics Editor for The Economist Magazine speaking on the economy after the credit crunch.  Even in her heavy British accent, Zanny’s message could not disguise the somber truth about the grim economic outlook for 2009 in the United States and around the world.  While far from Great Depression conditions, many statistics point that industrial production is way down, unemployment is way up, and global trade will contract for the first time since 1982.

As always, choosing between breakouts is always tough when you have two great topics: “Investment Opportunities in Microfinance”, and the one I attended, “Navigating the ETF Landscape” presented by John Hyland, who is Principal and Business Development Officer with Barclays Global Investors iShares division. While presenting mostly basics and some advanced concepts about ETFs, the key take away for me was the implicit costs of investing in ETFs.  Most people know about the commissions and expense ratio, which are explicit costs, but many do not realize that there are trading spreads, rebalancing costs, and tracking error costs.  Check the ETF provider’s web site or talk to your ETF provider about these costs and make sure that you are looking at total costs when comparing ETFs.

“Investing Today-Navigating Through the Headlines & Positioning Your Portfolio for a Slowdown” presented by Alison A. Deans, Chief Investment Officer of Neuberger Investment Management, was the day’s closing general session.  The title of the session was a bit misleading, since she really didn’t discuss much in the way of portfolio structuring, but instead discussed the state of the economy and how Neuberger managers viewed the environment.  She indicated that corporate bond yields were attractive, and, in response to a question, indicated that if they invested in fixed instruments issued by beneficiaries of the Troubled Asset Relief Program (i.e., financial institutions), it would be for maturities of no more than 18-24 months.

While not rivaling an inaugural ball, the day was capped off with a very nice reception with the exhibitors.

Tomorrow’s agenda is a full one with a much anticipated lunchtime presentation by Dr. Michael Shermer, who is the Founding Publisher of Skeptic magazine.  For highlights of Day 2, come back tomorrow.  For live highlights, follow my Twitter feed at http://twitter.com/themoneygeek.  Thanks for reading!

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3 Responses to “Highlights of NAPFA 2009 Investments Conference Day 1”

  1. TheFeeOnlyPlanner Says:

    >>>>>…..David suggested that this is an excellent time to be investing in investment grade municipal bonds….

    Really? And who says they are investment grade? Are they the ones who were also rating the other products “investment grade” that blew up? So, I always take these vendors “takeaways” with a grain of salt…last time I checked YieldQuest does a lot of bond business.

    Thanks for the invitation and good luck with the blog!

    And yes, today was a historic day!

    See you,

    George Papadopoulos

    P.S. What are other members saying about the new napfa referral system?

  2. Rich Feight Says:

    Excellent summary! I’m off to day 2.


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