The Long View – Page 2 – Lowenhaupt Global Advisors Australia

Forget All The Misdeeds – Just Trust Us

May 20, 2016 | By Charles Lowenhaupt

Cerulli Associates says that US high net worth clients prefer to hold their money at wirehouses, private banks and trust companies. This includes clients with more than $20 million dollars in that group using the wirehouses, private banks and trust companies.

Since the financial crisis in 2008, the world’s 20 largest banks have paid more than $235 billion in fines. One might ask why, after years of misbehavior by many institutions, are wealthy investors still relying on them? One might also ask how the brokerage industry can continue to attract those wealth holders given all the misdeeds and the daily fines and penalties they continue to rack up?Read More

On Privacy And The “Panama Papers”

April 6, 2016 | By Charles Lowenhaupt

The leak of 11 million documents (“The Panama Papers”) from the files of a Panama law firm, Mossack Fonseca, represents an unprecedented exposure of what is considered highly confidential information about the secret financial dealings of the some of the world’s highest profile leaders and wealthiest individuals.Read More

Bridging The Generation Gap: What is the Wealth For?

February 25, 2016 | By Charles Lowenhuapt

Significant wealth and family dynamics are always complex, but some aspects don’t change from generation to generation—or from continent to continent.

I was reminded of that during a recent trip to Sydney. Speaking at an event with a number of wealth holders and wealth inheritors, I had numerous conversations I’ve heard repeated again and again in the U.S., Europe and Asia. They go like this: Wealth creators say their children are aimless and lack their passion and direction. Family money, they say, has made their adult children soft. They bemoan the fact that the children lack “motivation.”  For their part, adult children complain that their parents are  too controlling. The children say they are passionate about  their ideas and their future, but their overbearing parents  are unwilling to help them use a small portion of the family  fortune to change the world or fund their projects.Read More

Zuckerberg Example: Demonstrating What The Wealth Is For

December 17, 2015 | By Charles Lowenhaupt

The birth of a child is a wondrous event, and all the more if you’re one of the richest – and most thoughtful – people in the world.

On “Giving Tuesday” two weeks ago, Facebook Founder Mark Zuckerberg and his wife, Priscilla Chan, announced the birth of their first child, a daughter Max. At the same time, in a 2,200-word letter to Max, they pledged that 99% of their Facebook stock will go to charitable purposes to promote equality and human potential. The shares, currently valued at $45 billion, would be one of the world’s largest gifts ever. It puts Zuckerberg on par with philanthropists Warren Buffet and Bill Gates, two of the world’s most generous givers.

Not surprisingly, an act of this magnitude elicits a lot of commentary and deservedly so. Bill and Melinda Gates said the gift is “an inspiration to us and the world.” Philanthropist and former New York City Mayor Michael Bloomberg said, “when it comes to philanthropy, 30 is the new 70.”Read More

Second Quarter 2015 Market Review

By Donna Gilding

The month of June was a pretty lousy month across the board. Equities and fixed income posted negative returns. The quarter was lackluster, especially for interest-rate sensitive securities such as REITs and MLPs. On a year-to-date basis, US and emerging markets small cap stocks have been the best performers. The Russell Microcap, for example, is up 2.80% and emerging markets small cap is up 8.25%.Read More

The Export-Import Bank: Why it Still Matters

By Donna Gilding

The Export-Import Bank was created in February 1934, as part of the New Deal, to finance trade with the newly established Soviet Union. A second bank was created a month later to finance trade with Cuba and shortly thereafter expanded to include all countries with the exception of the Soviet Union. Congress passed legislation to combine the two banks in 1935. They also granted the unified bank more powers along with more capital. While the Bank did extend credit to a few countries, such as Italy and China prior to World War II, its primary efforts were concentrated on Latin America as part of the Good Neighbor Policy.Read More

Will Consumers Spend the Oil Dividend?

By Donna Gilding

In the latter half of last year, the price of crude oil dropped by over 50%. This was soon followed by a significant decline in the price of gasoline for motorists. It was assumed that this drop in price would have freed up money to spend elsewhere. The markets bet on this. The run-up in the US stocks last year reflected the belief that cheaper oil would act as a stimulus to the economy. This, in turn, would allow the Fed to increase rates, attract funds to the US, and push up the dollar.Read More

Why Fairness Trumps Equality In Sharing The Family Wealth

By Charles Lowenhaupt

Question: When should wealth owners plan to leave unequal portions to their children?

Answer: Strange as it might seem, “almost always.”

Before dividing an estate, wealth owners need to get past the definitional ambiguity of “equal” and “unequal.” Most wealth holders define “equal” as a dollar-for-dollar split where each child gets the same amount. Yet another perspective might consider meeting needs equally, regardless of amounts. Research shows that about two-thirds of people choose dollar-for-dollar equality at death — but in our experience, most opt for equally meeting needs while they are alive.Read More

What Can’t Money Buy?

By Charles Lowenhaupt

The challenge of living with great wealth or raising children with great wealth is putting money in its place. That notion may seem oddly counter-intuitive because most people believe they have dominion over their money, not the other way around. In fact, money poorly managed often exerts a force of its own and has unintended – and often negative – consequences.

The key question is this: How should the wealth creator or wealth inheritor lead life to its fullest without drowning in the administration and emotion that can come with riches?Read More

What Will 2015 Bring: Three Economic Scenarios to Consider

By Donna Gilding

2014 turned out to be a notable year for a number of reasons even excluding geopolitical risks and global financial crises:

- - Small cap stocks had a great December and fourth quarter – up 2.97% and 10.06% respectively
  - REITS and long Treasuries were the best performers for the quarter – up 14.35% and 8.62%
  - REITS and long Treasuries led the markets for the twelve-month period – up 30.26% and 25.07%
  - We did not see a lot of folks betting on either REITS or long bonds of any flavor.

2014 is the sixth year with positive returns, the third year of double-digit returns and the 4^th longest bull market in post-war history.Read More

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