New Hire Roundup: Carol Yochem Joins TD Wealth

This week in new hires, Carol Yochem joined TD Wealth; Karen McNeill was appointed head of family history for U.S. Bank’s Ascent Private Capital Management; Nanette Abuhoff Jacobson was tapped as global investment strategist for Hartford Funds; Kenneth Robb and Robert DiMaggio joined fi360; RidgeWorth Investments welcomed Christopher Danos, Scott Goldberg and Mallory Carr; Amar Kothapalli was promoted to partner at Baker Tilly Virchow Krause; and John Liebowitz joined Davis Polk as a partner.

Also, Lincoln Financial Advisors appointed Bill Fortner managing director; Washington Trust named Mark Gim head of Washington Trust Wealth Management; Simple Alternatives added two new managers as subadvisors to its S1 fund; clark Kendall was named to the City of Rockville’s financial advisory board; the SEC promoted Amelia Cottrell to associate regional director for enforcement in New York; Lisa Weil was named to the SPARK Institute’s board of directors; and Commonwealth Financial was named a Best Place to Work for a seventh time.

Carol Yochem Joins TD Wealth as Regional Wealth Leader in the Carolinas

TD Wealth, which provides clients with customized private banking and wealth management services in partnership with TD Bank, has announced the addition of Carol Yochem as senior vice president and regional wealth leader for the metro Carolinas region. She will be based at TD Bank’s regional headquarters in Greenville.

Yochem joins from First Citizens Bank & Trust in Raleigh, N.C., where she served as executive vice president and head of the bank’s wealth management business line. Prior to this position, Yochem spent 18 years in executive and senior executive positions with SunTrust Bank in Tennessee.

Karen McNeill Appointed at Ascent Private Capital Management of U.S. Bank

U.S. Bank Wealth Management announced recently that Karen McNeill has been appointed head of family history for Ascent Private Capital Management of U.S. Bank. She reports to Scott Winget, senior managing director of wealth impact planning. In her new role, McNeill works directly with families to research and present family and business histories as part of a comprehensive wealth planning platform. As part of Ascent’s wealth impact planning team, she helps families uncover and construct meaningful family histories, then delivers them in live presentations, often at family meetings or retreats.

McNeill has more than 15 years of experience in working on personal history projects with individuals, as well as with private- and public-sector organizations. Prior to joining Ascent, she taught history at the University of California, Berkeley; the University of the Pacific, Ohlone Collegeand the Academy of Art University. She has also served as senior historian/architectural historian at Carey & Co. in San Francisco.

Jacobson to Succeed Rullo as Hartford Funds Global Investment Strategist

Hartford Funds has named Wellington Management Co.'s Nanette Abuhoff Jacobson as global investment strategist. She succeeds Jim Rullo, who will retire from Wellington Management at the end of June. In her new role, Jacobson will analyze and interpret markets and investment opportunities, write regularly on events that impact the global financial markets and provide commentary.

In addition to her role as global investment strategist, Jacobson serves as asset allocation strategist at Wellington Management. Prior to her current role, she was director of fixed income product management. She joined Wellington Management in 2005 as an investment director for U.S. fixed income products. Previously, Jacobson held positions at JPMorgan, Security Pacific National Bank, Interactive Data Corp. and IBM.

Behavioral Finance in the Real World: Fund Profits From Human Bias

Oberweis International Opportunities Fund (OBIOX) portfolio manager Ralf Scherschmidt is such a big fan of behavioral economist Dan Ariely that he and his team reread the Duke University professor’s best-selling book at least once a quarter.

Ariely’s book, Predictably Irrational: The Hidden Forces That Shape Our Decisions, serves as the inspiration behind the Chicago area-based Oberweis team’s investment strategy, which has resulted in a 20.88% year-to-date total return on OBIOX. The Oberweis fund is the No. 1-ranked fund in the foreign small/mid growth category, according to Morningstar. No. 2-ranked Oppenheimer International Small Co A has seen a 13.69% year-to-date total return as of Monday.

With that behavioral finance knowledge in hand, the OBIOX team identifies small-cap companies in the developed world that are overlooked by market bias and then takes advantage of earnings surprises. When a company’s fundamentals improve significantly and result in earnings that surprise the market, investors often struggle to immediately accept the change because they are biased by their previous estimates.

‘The Initial Human Reaction Is to Resist a Change in Belief’

“If the market did understand the underlying fundamentals, there wouldn’t be a surprise in the first place,” said the 37-year-old Scherschmidt (left) in an interview on Friday, noting that market players are human beings subject to inherent biases. “It takes the market a long time to incorporate new information into stock prices. People’s original belief about a business gets proven wrong, but the initial human reaction is to resist a change in belief. That’s what we can take advantage of.”

Scherschmidt, who launched OBIOX on Feb. 1, 2007, first learned about the economic theory of behavioral finance as a Harvard MBA student. When working under portfolio manager Joel Dobberpuhl of Jetstream Capital, a Tennessee hedge fund that has since closed, Scherschmidt learned to apply the theory as a stock picker.

To be sure, OBIOX’s stellar performance is due in part to greater market forces. Quantitative Equity Strategies founder Ben Warwick reported in his monthly index report for June that small-cap growth stocks have outperformed all other asset classes year to date, with the Russell 2000 Growth Index posting a 17.4% YTD return.

DOL Fiduciary Redraft Has ‘Left the Station’

The confirmation of Assistant Attorney General Tom Perez as secretary for the Department of Labor on Thursday will not hinder the DOL’s release of its fiduciary reproposal, which the Department says will come in October.

The Senate confirmed Perez by a vote of 54-46, making him the only Latino in President Barack Obama’s cabinet.

Despite recent attempts by lawmakers — and those in the industry — to stymie the DOL’s re-release of its fiduciary rule, the DOL’s Employee Benefits Security Administration’s Semiannual Regulatory Agenda, released July 3, states that a reproposal to amend the definition of fiduciary under the Employee Retirement Income Security Act (ERISA) will come in October.

Fred Reish, partner and chairman of the financial services ERISA team at Drinker Biddle & Reath, says the DOL’s controversial fiduciary plan could become a “point of contention” in letters from lawmakers or any potential upcoming hearings that Congress may have with Perez. But DOL’s fiduciary “train has left the station.”

Reish expects the DOL's fiduciary redraft to be at the Office of Management and Budget in the next few weeks.  

The next step will be “to see the proposed regulation and the related proposed prohibited transaction exemptions," Reish says. “If the DOL has responded to the most important concerns of the private sector, then the reproposal could be less controversial than contemplated.”

Robert Lewis, vice president of legislative affairs for the Financial Services Institute, agrees that Perez’s confirmation will not change DOL’s fiduciary course. “DOL has been moving forward [on its fiduciary plan] most of the year with an acting secretary,” he says. “We do not expect anything to change with the confirmation today.”

FSI, which has been a staunch opponent of DOL’s fiduciary plan, said in a statement that it “looks forward to working with [Perez] in the future, especially as his department moves forward on their rule redefining the definition of ‘fiduciary.’”

FSI said that it was “certain” that Perez “shares our concerns about small investor access to financial advice” under the DOL’s fiduciary reproposal, and that FSI was “eager to work with him to protect middle-class Americans.”

EBSA head Phyllis Borzi has been saying for some time that a rerelease of the proposed rule would come this fall.

But in the last couple of months, lawmakers have been pushing legislation to halt those efforts. First came the Retail Investor Protection Act, a bill introduced by Rep. Ann Wagner, R-Mo., which passed the House Financial Services Committee in mid-June by a 44-13 vote. The bill would require that the DOL wait to repropose its fiduciary rule until 60 days after the SEC issues its fiduciary proposal. The bill advanced to the House Education and Workforce Committee.

Borzi said in mid-June that she would not wait until after the SEC published its rule to release DOL’s.

Then in early July, Sen. Orrin Hatch, R-Utah, introduced legislation that would return oversight of IRAs to the Treasury Department— stripping that oversight from DOL.

DOL has received significant pushback regarding its plan to include IRAs in its rule to amend the definition of fiduciary under the Employee Retirement Income Security Act (ERISA), with the most notable complaint being that advisors would lose their ability to earn commissions on IRA advice.

But it’s unlikely either of those bills will receive any traction before October.

Signs of ‘Great Rotation’ as Inflows Hit Record for U.S. Equity Funds

It’s too early to tell if the “great rotation” has begun, but indicators are strong—very strong, according to TrimTabs Investment Research. The firm reported Tuesday that U.S. equity mutual funds and exchange-traded funds received a record $40.3 billion in July, easily surpassing the previous record of $34.6 billion in February 2000.

“We really only a few months of these heavy flows, but yes, the ‘great rotation’ so many pundits have been expecting may finally be starting,” David Santschi, TrimTabs CEO, told ThinkAdvisor.  “In June and July, U.S. equity funds posted an inflow of $39.9 billion, while bond funds redeemed $90.1 billion.”

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Santschi noted this strong enthusiasm for equities “should give contrarians pause,” adding that four of the 10 largest inflows into U.S. equity funds occurred at the peak of the technology bubble in early 2000.

An oft-cited statistic from the Investment Company Institute found that investors poured a record $309 billion into equity mutual funds at the top of the market in 2000, purchasing shares at the highest possible price, while pulling a record $50 billion from bond funds.

Conversely, investors put a record $140 billion into bond funds in 2002, while pulling a record $27 billion out of equity funds at the bottom of the market, selling at the lowest price. In both instances, investors did the exact opposite of what prudent investment required.

While noting the trend, Santschi (left)was hesitant to compare current actions to the previous decade; central banks are intervening to a much greater extent, he argued, and market expansion means “it can be stretched further.”

TrimTabs also reported that outflows from bond funds are persisting.  Bond mutual funds and exchange-traded funds redeemed $21.1 billion in July after losing a record $69.1 billion in June.

“Investors dumped bond funds at a record pace at the mere suggestion that the Fed might take away the punchbowl sometime in the future,” Santschi concluded.  “What will happen when the Fed does more than just talk?”

In a related note, bond giant PIMCO saw $7.4 billion pulled from its mutual funds in July, marking the second-biggest monthly outflow on record after June.

DoubleLine Capital also suffered its second month ever of outflows in July. The Los Angeles-based firm had $631 million pulled from its U.S. mutual funds in July, on the heels of $1.45 billion pulled in June.

All about investing in a volatile market

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For almost two years now, the market has been range bound, oscillating between the 17,000 to 20,000 points range. Just when it looks like the shackles are lifting comes the turnaround and just as investors start fearing an imminent crash, the index manages a recovery and rebounds. Consequently, most investors are in a dilemma and quite don�t know how to play out this situation. While some have preferred to wait out the volatility by staying out of the market, others are indulging in chasing returns by dabbling heavily in gold, silver and other commodities. Yet others are gung-ho on FMPs and fixed deposits where in some cases the returns on offer are in the region of 10% p.a..

However, the truth is there is no reason for investors to get antsy. While desiring a good return is fine, having a rational perspective is crucial. Commodity prices were in a speculative bubble and when international commodity exchange officials raised margin requirements, prices have started going into a free fall. Similarly, in an effort to earn 10% p.a., one could run the risk of losing 100% in no time! Chasing returns is risky and its best to avoid greed. Like I said, its time to take a step back get a perspective. Towards, this end, this week I am going to review some of the lessons that one learns along one�s journey as an investor. Some of these lessons emanate out of personal experience, some out of the experience of others and some is wisdom provided by those who have been fairly successful investors themselves.

First up is something that I have repeatedly observed - the market is like a class room where we are taught lessons. The same lesson is taught to you time and again till you learn it properly. Once you have finished your learning, you move on to the next class room where you are taught another lesson. Successful investors are those who learn the most lessons along their investing life.

And the very first lesson in this classroom is regarding the virtues of long-term investing. Actually, the term �long-term investing� in my dictionary is a euphemism for the combination of the powerful twin forces of compound interest and time. Compound interest in solitude means little. And time without the company of compound interest is equally meaningless. However, it�s my observation that most retail investors lack the patience, conviction, heart and stomach required for the purpose.

So here�s what one can and should do. Investing all your money in any one type or class of instrument is always risky, no matter what the instrument is. Instead, consciously spread your investments regardless of the external environment. Amidst all the noise, do not let go of the basics. Keep it simple, keep it real. While investing in gold is indeed desirable, have no more than around 15-20% invested in the metal. Don�t buy physical gold, instead use Exchange Traded Funds (ETFs). Allocate another 20% to relatively safe bank fixed deposits. Cash can command around 15%. The balance can and should be invested in equity, not in a lump sum but in a staggered manner through Systematic Investment Plans (SIPs). This way, you can let compound interest do its work in the company of time. If the market falls, you get the same stuff cheaper. If the market rises, since you are anyway participating, you make profits. Either way, you win. It is really as simple as that.

Don�t borrow to invest. Ever. Do not listen to tips that your neighbour, train friend or office colleague is so gung ho about. Even if you listen, do not act upon the tip. Instead keep it in mind and be sure to check after a year or so what actually did happen to the hot stock that everyone was so excited about. That is, if it is still traded. Invest with mutual funds with an established track record of at least five years. Choose plain vanilla diversified funds. Then hold fast, hold tight and hold out.

Of great relevance in the current situation is a quote from Warren Buffet. He has said � �Five years from now, ten years from now, we'll look back on this period and we'll see that you could have made some extraordinary (stock market) buys. That doesn't mean it won't get more extraordinary a week or a month from now. I have no idea what the stock market is going to do next month or six months from now. I do know that the economy, over a period of time, will do very well, and people who own a piece of it will do well. Just don't borrow money to buy your piece.�

While Mr. Buffet�s statement was to do with the US market, it can literally be copy-pasted for our market too. Over the next five-ten years, India will do well. Do participate in this prosperity. And the best way to do this is by staying invested over the long-term. Do not try and time the market. Despite all the upheavals and turmoil that we go through, at the end of the day, India is progressing. And this progress will manifest itself in the stock market one way or another. The timing is irrelevant, that it will happen is certain. Whether you can benefit from it is up to you. The question is --- are you up to it?

Or in other words, making your money make money is really so simple that it becomes difficult. However, if you try and actually apply the above principles, day in day out, month in month out and year in year out, the chances of losing are virtually nil.

Disclaimer: While we have made efforts to ensure the accuracy of our content (consisting of articles and information), neither this website nor the author shall be held responsible for any losses/ incidents suffered by people accessing, using or is supplied with the content.

HUDCO tax free bonds issue to open on January 27

The minimum application size is ten (10) bonds and in multiples of one (1) bond thereafter. The issue will open on January 27, 2012, and will close on February 6, 2012, or earlier, or may be extended by such period, upto a period of 30 days from the date of opening of the issue, as may be decided by the board of the company or by a duly constituted committee.

The bonds carry a coupon rate of 8.10% for Tranche-I Series 1 Bonds and 8.20% for Tranche-I Series 2 Bonds on per annum basis. Additional coupon rate of 0.12% per annum for Tranche-I Series 1 Bonds and 0.15% per annum for Tranche-I Series 2 Bonds shall be payable to the allottees under Category III  which will aggregate to coupon rates of 8.22% and 8.35% respectively. However, the aforesaid additional interest of 0.12% p.a. and 0.15% p.a. shall only be available to the original allottees of the bonds under Category III, and shall not be available to the bondholders of such bonds under certain instances. The bonds are proposed to be listed on NSE and BSE. 

The Tranche-I Bonds have been rated 'CARE AA+' by CARE indicating high degree of safety for timely servicing of financial obligations & carry very low credit risk and �FITCH AA+ (ind)� by FITCH indicating Outlook on National long-term rating is stable.

The Tranche-I Series 1 bonds and Tranche-I Series 2 bonds can be redeemed after ten (10) years and fifteen (15) years respectively from the deemed date of allotment. The bonds can be issued in both dematerialized and physical form but trading can happen only in dematerialized form. The issue price for both the series is Rs 1,000 per bond.

There are 3 categories of investors who can apply to the issue � Category I, Category II and Category III. Category I includes public financial institutions, statutory corporations, scheduled commercial banks, co-operative banks, regional rural banks, provident funds, pension funds, superannuation funds, gratuity funds, insurance companies, national investment funds, mutual funds, companies, bodies corporate, societies, public, private charitable/religious trusts, scientific organizations, industrial research organizations, partnership firms and limited liability partnerships.

Category II includes resident Indian individuals and Hindu Undivided Families applying for an amount aggregating to above Rs 5 lakh across all series in the tranche. Category III will include resident Indian individuals and HUFs applying for an amount aggregating to upto and including Rs 5 lakh across all series in the tranche.

The lead managers to the issue are Enam Securities Private Limited and SBI Capital Markets Limited. The debenture trustee to the issue is SBICAP Trustee Company Limited.

Bayer Announces Positive Phase I Data - Analyst Blog

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The HealthCare segment of Bayer (BAYRY) recently announced positive results from a phase I study on prothrombin complex concentrates (PCCs). The study evaluated three- and four-factor PCCs in 34 healthy adults.

Results from the phase I study revealed that three- and four-factor PCCs can be used to reverse the anticoagulant effect measured by coagulation assays in patients treated with blood thinner Xarelto (20mg twice daily). The study further revealed that the three-factor PCC was more effective than the four-factor PCC on reversing Xarelto-induced changes in thrombin generation.

Bayer stated in its press release that currently there are no approved reversal agents for Xarelto. In Feb 2013, Bayer along with partner Johnson & Johnson (JNJ) collaborated with Portola Pharmaceuticals Inc. (PTLA) to evaluate the potential ability of PRT4445 in reversing the anticoagulant activity of Xarelto in emergency situations.

We note that Xarelto is marketed by Johnson & Johnson in the US and by Bayer outside the US.

Meanwhile, Bayer and Johnson & Johnson received a huge setback from the US Food and Drug Administration (FDA) last month, when the US regulatory body issued a complete response letter (CRL) to the supplemental New Drug Application (sNDA) of Xarelto for the reduction of risk of stent thrombosis in patients suffering from acute coronary syndrome (ACS).

Bayer/Johnson & Johnson are no strangers to setbacks regarding the ACS indication in the US. In Mar 2013, the companies received a second CRL from the FDA for Xarelto's (2.5 mg twice daily) sNDA submission for the reduction of the risk of secondary cardiovascular events in patients suffering from ACS. The initial CRL for this indication was issued in Jun 2012, after which Bayer and Johnson & Johnson had resubmitted the sNDA for blood-thinner Xarelto in Sep 2012.

Xarelto is, however, approved for sever! al indications in the US including stroke prevention in nonvalvular atrial fibrillation, deep vein thrombosis (DVT), pulmonary embolism (PE) and reduction of the risk of recurrent DVT and PE.

Bayer, a large-cap pharma company, presently carries a Zacks Rank #4 (Sell). Meanwhile, other large-cap stocks such as Novo Nordisk (NVO) currently look more attractive with a Zacks Rank #2 (Buy).

PVH Hits New 52-Week High - Analyst Blog

Riding on better-than-expected first-quarter fiscal 2013 bottom-line results, shares of PVH Corporation (PVH) attained a new 52-week high of $130.95 yesterday, before closing at $130.86, up 2.0% from the previous day's session. This Zacks Rank #2 (Buy) stock generated a year-to-date return of approximately 17.1%.

Based on the current price, this designer, marketer and retailer of apparel, furnishings and accessories is 0.8% below the Zacks Consensus average analyst price target of $131.91. The company currently trades at a forward P/E of 18.42x, a 2.6% premium to the peer group average of 17.96x. Additionally, the company's long-term estimated EPS growth rate is 14.3% higher than the peer group average of 12.7%.

PVH Corporation's earnings surprise history shows it to have outperformed the Zacks Consensus Estimate in the last 10 quarters with an average beat of 10.1%, including a positive surprise of 39.4% in the previous quarter.

PVH Corporation posted results on Jun 12, in which quarterly earnings of $1.91 per share surpassed the Zacks Consensus Estimate of $1.37 and surged 43.6% from the year-ago quarter. The upside was primarily driven by revenue growth from the acquisition of The Warnaco Group, Inc. and improved margins.

During the quarter, total revenue of the company jumped 33.8% to $1,910.2 million compared with $1,427.4 million in the prior-year quarter. Management hinted that strong performance across Calvin Klein, Tommy Hilfiger and Heritage Brands were the growth drivers. PVH Corporation expects the momentum to continue in the second quarter as well.

However, despite impressive results, the guidance seems somewhat conservative, with the company's adherence to its outlook.

PVH Corporation continues to expect fiscal 2013 total revenue to be $8.2 billion, and reiterated earnings of $7.00 per share. Currently, the Zacks Consensus Estimate for the fiscal is $7.10 per share. For the second quarter, ! total revenue is projected to be $1.9 billion, with earnings of approximately $1.35 per share. The current Zacks Consensus Estimate of $1.36 per share for the second quarter is slightly above the company's forecast.

Alongside, Gap Inc. (GPS), Macy's Inc. (M) and V.F. Corp. (VFC) achieved new 52-week highs of $44.10, $50.77 and $200.43, respectively on Jul 9, 2013.

Costco Upbeat over Strong June Comps - Analyst Blog

Costco Wholesale Corporation (COST) delivered comparable-store sales (comps) growth of 6% in June, following an increase of 5% in May, and reflecting comparable sales growth of 6% at both the U.S. and international locations.

Buoyed by strong sales, shares of Costco recorded a new 52-week high of $115.94 yesterday, before closing at $115.89.

Costco's comparable-store sales for the 44-week period ended Jul 7, 2013rose 6%, buoyed by an equivalent increase at both the U.S. and international locations.

Excluding the effect of gasoline prices and foreign currency fluctuations, Costco's comparable-store sales for June rose 6%, reflecting comparable sales growth of 6% at its U.S. locations and 8% at international outlets. For the 44-week period, the company witnessed comparable-store sales growth of 6%, with U.S. and international sales rising by a similar rate.

Total net sales for June rose 8% to $9.92 billion from $9.16 billion in the year-ago period. Costco's sales for the 44-week period increased 8% to $87.05 billion from $80.46 billion in the year-ago period.

We believe that Costco's differentiated product range enables it to provide an upscale shopping experience to its members, resulting in market share gains and higher sales per square foot. Moreover, it continues to maintain a healthy membership renewal rate.

This Zacks Rank #3 (Hold) stock remains committed to opening new clubs in domestic and international markets. The company's diversification strategy is a natural hedge against risks that may arise in specific markets.

Besides Costco, other retail chains also posted healthy sales data for the month of June as improving job market, lower gas prices, warmer weather and clearance discounts boosted consumer sentiment.

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Le! ading the pack is the clothing chain, The Gap, Inc. (GPS), which witnessed a 7% rise in comps, while net sales jumped 8% to $1.53 billion. Off-price retailer of apparels, footwear and accessories, Stein Mart Inc. (SMRT) was another strong performer of the month. The company registered a 6.5% rise in June comps, while total sales increased 2.6% to $109 million.

Discount store operator, Fred's, Inc. (FRED), marked a significant improvement as the company witnessed a 4.5% rise in comps, substantially up from the 4% decrease witnessed in Jun 2012. Net sales for June increased 3% to $187.7 million.