Dave Quoted in CNBC – Stocks Still Tops, Advisor Survey Finds

Dave Quoted in CNBC – Stocks Still Tops, Advisor Survey Finds

CNBC_logoWhen it comes to assessing where to put money to work in 2014, Andrew Osterland of CNBC reports that advisors are largely in agreement: tilt towards stocks. Of the 1,449 CERTIFIED FINANCIAL PLANNERTM professionals surveyed by CNBC/Financial Planning Association, 87% were bullish on stocks, particularly when the investment strategy is long-term. In addition to the stock tilt, advisors are shifting towards greater international exposure. In the report, 81% of advisors reported that they planned to talk to their clients about increasing their allocations to international stocks with about a 51/49 split between emerging markets and Europe.

“Notwithstanding the boom and bust cycles in emerging markets, there’s every reason to believe that they’ll continue to be among the fastest-growing markets in the world,” [David] Yeske said. “There’s a wide range of advisors and financial planners who see the virtue of building global portfolios.”

This doesn’t mean, however, that advisors aren’t recommending bonds.

“Bonds can be a stable reserve of value, or they can be as volatile as stock,” said David Yeske, co-founder of advisory firm Yeske Buie Inc. “I think a lot of advisors are shifting their bond allocations to shorter maturities and higher credit quality.”

Yeske, who participated in the survey, said that 100 percent of his fixed-income portfolio currently has a duration of less than a year and an average credit rating of single A.

A topic that continues to be hotly debated is whether to employ tactical asset allocation, which is a strategy to move large amounts of assets into one asset class or another to produce greater return. So far, the general consensus is that it is a best practice to rebalance funds back to their target.

Yeske, for one, has been selling large-cap and small-cap U.S. stocks and buying global real estate, emerging-market stocks and even bonds over the last six months.

He said that many of his clients are still traumatized by the financial crisis of 2008 and want to get out of the U.S. market after the recent run-up.

“I agree, but we do it according to plan,” he said. “It’s all about rebalancing.”

Read more of Osterland’s article.