Financial advisor insights: 10 most significant trends for 2013
From Washington Post :
- ETFs are eating everything
- The financial sector continues to shrink; advisers continue to leave large firms for independents
- Increased pressure on fees and commissions
- Hedge fund troubles
- Dispersal of financial news
- Demographics are a huge driver
- The death of buy-and-hold has been greatly exaggerated
- What hyperinflation?
- The bond bull market has ended/interest rates are spiking
- The Fed still holds the system together
Lots of financial predictions have been made as 2013 began. Here’s another one from Goldman’s Jan Hatzius.
http://www.businessinsider.com/goldmans-jan-hatzius-answers-the-10-most…
How will you evaluate those predictions?
Personally speaking, I always use mean reversion regime to see what to expect, especially during this “results season”.
Starting this week, we will be able to see how profitable companies were in 2012. Watch revenues for the strength of the economy, and margins for the progress of the corporate profit cycle.
8/9 do not compute
From a investment bank point of view, 2013 will be mixed. It's destined that regulations are going to be stricter against all the banks. Consolidation is definitely the main trend down the road for all the BBs as they try to cut jobs and retract their businesses from certain markets (FX for example) and regions (Africa for example). However, personally I can see a recovery in the M&A market especially in cross border M&A between Asia and the rest of the world. As China's new political leader took over, China is now focusing on economic reform, and is trying to stress on the quality of growth instead of speed. That means a lot of technologies and resources are required to build up a sustainable economic growth model for them. That's why we have seen a recent shopping spree of China's SOEs in overseas market( the CNOOC/Nexen deal for example). In addition, since consolidation is the main trend, it might indicate a stronger deal flow for M&A advisors. Hence, even with slowly recovering global economy, the profit of investment banks is going to rise against the macroeconomic pressure.
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