North Bay Business Journal

The Business Journal surveyed wealth management advisers across the North Bay on three questions related to the investment climate today and long term. The responses of nearly two dozen follow.

(Listed alphabetically by company name)

Colleen Supran, principal

Bingham, Osborn & Scarborough, LLC

1201 Vine St., Ste. 102, Healdsburg, 707-433-7300, www.bosinvest.com

Describe one significant challenge that you currently face as a wealth adviser.

Colleen Supran

Fixed income is an important part of our clients’ portfolios; however, future bond performance may look very different from the above-average returns we experienced over the past 30 years. Interest rates are at very low levels and if rates rise in the future, bond prices will decline. Although we have been hearing predictions of higher interest rates for years, no one knows for sure when (or if) rates will rise. We address this uncertainty by using short- to intermediate-maturity bonds in client portfolios. These bonds tend to be more stable when interest rates change, steadying portfolio values when stock price volatility increases.

What mistakes do you see individual investors making in the current financial climate?

Interest rates (as measured by the 10-year U.S. Treasury) are near record lows and the Federal Reserve has vowed to keep yields low for the foreseeable future. Investors starved for yield are buying higher-risk securities that they may not understand or want to own if they could earn some interest on CDs or a money market account. To achieve high yields in this environment an investor must take on more risk. This is often an unacceptable tradeoff for the portion of a portfolio that should be invested in stable, low-risk assets.

What plot lines are you following as you look towards the future for investing?

We live in an uncertain world and investors will always have plenty to consider. As much as the world around us changes, we recognize that the plot line for the future is based on each client’s unique situation. Changes in a client’s work or family situation are often more meaningful inputs than the myriad of economic and global worries that are an inevitable part of the investment landscape. We spend a significant amount of time understanding individual risk tolerance and building portfolios that are customized to meet each investor’s needs.

How much are you adjusting your financial strategy for the "fiscal cliff" around year-end?

• A lot (24%, 5 votes)
• A little (0%, 0 votes)
• Not at all (48%, 10 votes)
• Not sure (28%, 5 votes)

Total voters: 21

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This NBBJ Pulse Poll runs through Sept. 4, 2012.

Charles Root, managing director

Double Eagle Financial

2300 Bethards Dr., Ste. R, PO Box 2790, Santa Rosa, 707-576-1313, www.double-eaglefinancial.com

Describe one significant challenge that you currently face as a wealth adviser.



Charles Root

The major challenge is that too many clients watch the nightly news and see the overly negative news about the economy and everything in general. Rarely one sees any positive reinforcement to the changes that have been taking place and there have been many good ones that allow one to take advantage of business opportunities.

That said, businesses are concerned about costs and uncertainty, as well as future increase in taxes and healthcare costs.

With all these uncertainties, no one wants to make a move other than to hold on to their cash and resources.

What mistakes do you see individual investors making in the current financial climate?



Individual investors always make the same mistakes every cycle, which is one of the reasons the cycles are accentuated. They get impatient and sell at the worst critical part of the market and then wait until most of the recovery has taken place to buy back in. As a result they usually are out of phase with the market. Surveys have shown that individual investors have lower returns than professionals. One needs assurance by an expert adviser that will keep the investor calm in any kind of a market. Also, few investors or advisers for that matter know how to implement proper risk management when the market does start to go south.

What plot lines are you following as you look towards the future for investing?

Our game plan has few changes. We use an Offense plan and a Defense plan. We are now in the early stages of our Offense plan, that is to begin with serious money into the market when our charts give correct signals. During the period from May to October, the historical returns are minimal, so we are very cautious about putting large amounts into the market unless we have a strong signal to do so. We are always cautious unless we see strong signals for market bottoms.

As always our first rule is risk management, not to lose client money. Gain is secondary, since with small draw downs, one doesn’t need to get huge returns.