Archives for April 2014

The 4 Keys to Peak Performance

Posted on 04.29.14 |

Michael F. Sciortino, Sr.
Executive Vice President, Managing Director, Head of Distribution
CMG

I remember two things in particular from when I started in the business:

The DJIA was just coming off a low of 776.
I had taped on my desk by my phone the Calvin Coolidge quote on persistence (more on that in a moment).

Since then, I have had a passion for learning how to maintain peak performance and share the results with the advisors I work with. What I’ve learned is that it is possible to maintain a regular and consistent level of peak performance if you employ the following 4 keys:

mountain

P ersistence
E nthusiasm
A ttitude
K indness

Let’s break each of these down:

1) Persistence – We all get knocked down from time to time. These are the times you need to give of yourself and a little more. The marathon runner hits the wall. The boxer hits the mat. Many times, the problems or challenges we face force us to grow and become more capable. Those who persist in spite of the obstacles they encounter usually prevail. They reach ahead to achieve their vision of the future.

“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.”

-Calvin Coolidge

Strategy Review & Cyclical Trends

Posted on 04.25.14 |

Steve Blumenthal, Founder & CEO
CMG

CMG Tactical Strategy Review. No major changes since last week: We continue to hold mostly long equity exposure in our CMG Opportunistic All Asset Strategies with a modest move toward emerging markets across the portfolio. The portfolios are approximately 70% Equity, 30% Fixed Income. Our CMG Tactical Rotation Strategy moved to a more defensive position for April: 50% TLT (iShares Treasury Bonds) and VNQ (Vanguard REIT). High yield bond prices are firm to higher. We remain positioned long high yield bond fund exposure.

The cyclical trend remains positive as measured by Big Mo, investor sentiment is mixed and the Fed is supportive for now. Immediately ahead of us is the seasonally challenged May-October period. I believe that putting hedges in place remains the prudent thing to do. Risk is so significantly elevated due to Fed manipulation. The system is more leveraged than it was in 2008 and this cyclical bull is aged. Tactical strategies can further your portfolio diversification in important ways.

Now, here is a look at the S&P 500 Cycle Composite for 2014. The blue line in the chart below shows the tendency for the market to correct in the May to October period.

How to Create a Memorable Client Experience

Posted on 04.22.14 |

Michael F. Sciortino, Sr.
Executive Vice President, Managing Director, Head of Distribution
CMG

You know, the client experience that everyone in town talks about. The client experience that everyone looks forward to. Let’s start with turning your shoulds to musts. Over the years, I’ve heard them all. I should put on that seminar. I should call 3-5 clients per day. I should mail 5 personal notes a day. I should plan my next memorable client event.

Now, let’s try that again, in order to achieve the results you want in your practice. I must put on that seminar. I must call 3-5 clients per day. I must mail 5 personal notes a day. I must plan my next memorable client event.

One of the secrets successful advisors have shared with me over the years is that surprisingly many of their most successful ideas are not new. However, they have taken the time to discover them and then model their actions after other successful advisors. Makes perfect sense to me. When you take these ideas from others you in effect compress decades of learning into days.

One such idea that an advisor I worked with in a small town used was an annual anniversary party in a local park. Even if you happen to be in a large city, you can do this in a suburb. Here’s how he set it up. At the event, clients are served BBQ and are entertained by a 3 piece band. Every year he invites his clients and friends along with all city leaders and movers and shakers in the community. The next part I think is brilliant. He enlists several high school students dressed in his company’s logo shirts and khaki pants to serve his guests. This is a great way for him to build goodwill by offering the students much needed service hours and socializing with clients and prospects.

Does a lot of planning and preparation go into this event? Sure. However, what we fear most is what we most need to do! So, go ahead and start planning an event that is fun, something people want to do, and something that will allow you to stand out from the crowd. As W. Clement Stone used to say, “Thinking will not overcome fear but action will.” Here’s an action that will help you expand your practice by creating a memorable client experience. What are you waiting for? – Mike Sciortino

Seasonal Trend Points to May – October Correction

Posted on 04.17.14 |

Steve Blumenthal, Founder & CEO
CMG

The Seasonal Trend is about to push against the long-term Cyclical Bull trend. Which will win out?

For now, the major cyclical trend for equities remains higher and I continue to lean in that direction. But … as it relates to long-term focused core equity exposure, if you have yet to do so, I believe it is important to put a hedge in place by month end.

See graph below, S & P Seasonality During Mid-Term Years.

Risk of a 5% to 20% correction is high.

S & P Seasonality During Mid-Term Years by Steve Blumenthal, CMG Capital Management Group

Click to enlarge

Although the longer-term cyclical bull trend remains in place, the Fed remains accommodative; sentiment and seasonal patterns support a correction. Further, this cyclical bull is aged and valuations are high, margin debt is at a record high and sentiment reflects a fairly optimistic investor.

Customer Service…It’s Not That Complicated

Posted on 04.15.14 |

Mike Sciortino
Executive VP, Managing Director, Head of Distribution
CMG

Today I offer a few interesting perspectives on customer service.

“The role of customer service is to mitigate disloyalty by reducing customer effort .” –Matthew Dixon

Interesting perspective. Customer service involves making it easier for the customer to transact business. Let’s look at a few examples.

An issue of Southwest magazine carried an article about computer magnate Michael Dell. Dell explained the success of his company. He believes he and his employees are successful and will continue to be successful because of their unique relationships with their customers He said,” As long as we continue to pay heed to what our customers tell us they want, and deliver products and services that are meaningful to them, and that deliver superior value, we will continue to be successful.”

Excellence is an Attitude

Posted on 04.10.14 |

Michael F. Sciortino, Sr.
Executive Vice President, Managing Director, Head of Distribution
CMG

Over the years, what I’ve observed is that excellence is not a skill, it is an attitude. An attitude that is practiced everyday. Vince Lombardi used to say, “The quality of a man’s life is in direct proportion to his commitment to excellence, regardless of his chosen field of endeavor.”

Recently, I ran across a quote by a well known retired CEO which exemplifies what successful advisors in our business display:

“To me, excellence means being better than the best. Its achievement requires an introspective assessment of everything we do, say, or make, and an honest inquiry; ‘Is it better than the best?’ If it is not we will ask ourselves, ‘What will it take?’ and then rally the resources required to get there.” – Jack Welch

Is Europe Late to the Party?

Posted on 04.08.14 |

PJ Grzywacz
President, Chief Compliance Officer
CMG

È tempo per un po ’di QE? Nein danke. Vielleicht?

TRANSLATED: Is it time for a little QE? No thank you. Maybe?

Although Mario Draghi, President of the European Central Bank (ECB), announced that the Bank’s governing council is prepared to take emergency action if inflation falls too low, it may be a case of too little, too late. By emergency action, he of course means quantitative easing, which to this point has been anathema to German policy makers.

Each of the EU’s competitors has acted with some form of stimulus, loose monetary policy or unconventional quantitative easing in an attempt to stimulate growth. In the U.S. we have gone through every monetary tool in the bag. In the UK, the Bank of England is so pleased with its QE, it is considering whether it needs to make “any adjustments” (read “any” as in “any, ever”) at all to its bond buying programs. Read More >

Be Careful with Equity Exposure Today

Posted on 04.03.14 |

Steve Blumenthal
Founder & CEO
CMG

Advisors are wondering: What percentage of equity should I hold in my client portfolios? How frothy is this market? Is it time to get more defensive?

The short answers: this market is expensive – stay cautious. Hedge long-term equity exposure.

How do we realize this? On the chart below, the table shows stock market performance six-months to five years after over- or under-valuation is reached.

In the bottom clip, note the S&P’s current price to its Normal Valuation Line (dotted red middle line) and the zones that identify valuations to be “overvalued” or “undervalued”. The yellow circle identifies current valuation. The idea is to get a sense of a market that is above or below its normal valuation. When the S&P 500 is 20% above its normal valuation, we consider it overvalued; at 20% below normal we consider it undervalued.