September 30, 2014
Investing advice:  How are you advising clients to invest in 2013?

Photo: Kevin J. Miyazaki/Redux

Al Bhatt, Managing Director, CIO, Coral Gables Trust

Wealth Management

Investing advice: How are you advising clients to invest in 2013?

Florida wealth managers give advice in this special report.

Uncertainties in the stock market make it hard to assess risk and forecast safe havens — will this be the year that interest rates start to rise and devastate returns for fixed-income investors? With unprecedented low interest rates, history is not necessarily indicative of future performance, and even the most brilliant investors are cautious.

But with uncertainty comes opportunities. While wealth managers around Florida are pursuing various strategies, a common theme remains diversification and selection of an approach tailored to an individual investor’s risk tolerance.

Here is what some Florida wealth managers are advising.

Al Bhatt
Managing Director, Chief Investment Officer
Coral Gables Trust, Coral Gables

“We need to look for leading global companies whose stock prices are selling at a discount.” ~ Al Bhatt

Al Bhatt looks at the markets and sees land mines. “We’re in a very volatile environment, and I believe it will persist for some time,” he says. “Because of broad uncertainty and because of equity volatility, we need to be even more thoughtful.”

Bhatt advocates a well-constructed portfolio of European and Asian equities. “We need to look for leading global companies whose stock prices are selling at a discount” — companies like Roche Holding, Nestle and Philips Electronics, he says.
Bhatt believes Europe could see a recovery beginning as early as 2014, creating an opportunity for the short term. “We’ve identified a few strong (fund) managers who have a successful track record investing in international equities and we’re looking to them to get returns.”

The second part of Bhatt’s strategy is focused on the bond market. He advises clients against making or increasing their investment in U.S. bonds. “At this stage, that’s a wrong move because the Federal Reserve and the European Central Bank have to keep rates low for the foreseeable future.” The exception: Floating rate bonds. “These are more senior bonds with higher credit quality, and they float. When the rates rise, the rate on the bonds will increase.” He sees opportunity in global market bonds. Over the long term, emerging markets will improve faster than developed markets, he says. He also feels there is a higher yield opportunity in emerging market bonds as well as an opportunity to capture currency appreciation by investing in local currency bonds.

Next page: Pat Dorsey, Director of Research / Sanibel-Captiva Trust, Tampa Bay Trust, Naples Trust

Tags: Banking & Finance, Wealth Management

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