Financial Advisor Groupthink (Emerging Markets Edition)

Last October, Charles Schwab hosted 2000 of its independent financial advisors at its annual IMPACT Conference up in Boston.

My buddy Zipper Theory was in attendance and gave me the down and dirty in terms of what the consensus among participants seemed to be.  Yes of course they all loved gold (which has underperformed), were sanguine about most fixed income (which has been dreadful) but of all the areas in which the advisors’ groupthink was dangerous, their near-universal endorsement of emerging markets stocks and emerging markets bonds took the cake.

Here’s what Zipper told us originally on October 31st after the conference:

Emerging Markets Stocks:
# BUY EM STOCKS – this was a really consensus idea – no one thought it was a bad idea or had a counter argument to why you should own them

# Most people don’t own enough of these – should own them on a percentage of global GDP basis.

# Demographics/growth rates/no debt/emerging middle class/etc.

# Buy EM Debt w/a shovel and keep piling it on > better demographics/balance sheets/growth prospects

Of course.  Now here’s what Emerging Markets have done (as expressed by the widely-held EEM ETF) versus the S&P 500 from November 1st through today:

It never fails.  By the way, I don’t mean to pick on the Schwab advisers – their herd mentality is representative of all of us in the aggregate.

The question now is, where is Groupthink amongst investors and their advisers most prevalent today?

Source:

2000 Advisors Converge on Boston, Here are the Insights (TRB)

What's been said:

Discussions found on the web
  1. taxi cheltenham to bristol airport commented on Sep 17

    … [Trackback]

    […] Here you can find 96326 additional Info to that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  2. Smith and Wesson guns in stock commented on Oct 14

    … [Trackback]

    […] Read More on to that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  3. 어른아이닷컴 commented on Nov 09

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  4. td canada trust easyweb commented on Nov 17

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  5. scotiabank canada login commented on Nov 27

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  6. knockoff knockoff breitling watches commented on Dec 08

    … [Trackback]

    […] There you will find 35632 more Information on that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  7. devops commented on Dec 10

    … [Trackback]

    […] Here you will find 52084 more Information on that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  8. red bull wholesale price commented on Dec 22

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]

  9. 프로툰 commented on Dec 28

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2011/02/15/financial-advisor-groupthink-emerging-markets-edition/ […]