Monthly Archives: February 2014

Bitcoin Development May Mean the End of Digital Currency

MtGox, the online home of what was one of the largest Bitcoin exchanges, was left blank yesterday morning. The unavailable content revealed that the exchange is on the verge of collapse- in fact, a number of Bitcoin companies stated that MtGox intended to file for bankruptcy after an apparent major theft and technical problems.

The site later posted this message: “In light of recent news reports and the potential repercussions on MtGox’s operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.”

The company has allegedly lost more than 744,00 Bitcoins to theft.

The shocking turn of events has many doubting the future of virtual currency. Learn more with Yahoo! News and Reuters:

Keep Your Eyes on These Guys: Financial Leaders Who Will Make a Difference in 2014

Smart investing is often based on a solid knowledge of past trends and educated guesses about the future. Professional financial advisors, therefore, must keep abreast of the influences on the marketplace, in addition to having a thorough understanding of what has come before.

In order to assist professional advisors and investment managers, Rep., an online journal of wealth management written explicitly for advisors, takes a stand each year on who they believe will be the ten most influential personalities in the worlds of economics, finance and investing.

Last summer Rep. published their take on who will “change the world” of financial advisors in 2014. As they worded it in their intro to their article The Ten to Watch in 2014, “given our daily interactions with the most plugged-in individuals in the advisor world—we know a thing or two about where the wealth management industry is headed, and who will blaze the trail.”

Out of the “Ten to Watch” we  introduce you to the three we believe to be the most worthwhile to “watch.”

Deborah Fuhr is a partner and co-founder of ETFGI, based in London. She is one of the world’s top ETF analysts, enabling her to create the independent consulting and research firm of ETFGI. Fuhr earned her wings after three years as the global head of ETF research at a leading provider of ETFs. Previously she did eleven years at Morgan Stanley, where she ran investment strategies.

“We’re still in the early innings in terms of [industry] growth. More people are moving to passive strategies and more people are aware of the impact of costs on their returns. There is still a huge need to be educated with independent, unbiased information on these products,” Fuhr said.

Joe Lonsdale is an up-and-coming star at the age of only 30. He is the co-founder of Addepar Technologies, and has led his company to the head of the class of wealth management in the technology sector. One advantage for Lonsdale is that he lives in Silicon Valley, not on Wall Street. He went to Stanford to study computer engineering, and did a stint as an intern at PayPal.

Lonsdale found his niche when he and his partner Jason Mirra saw a need to organize data in the financial services sector.

“Virtually all of my friends with family offices had complained to me about how bad the software was in this industry and the problems this caused,” Lonsdale wrote in a post on Quora. “Many RIAs, family offices, banks, insurance companies, pension funds, SWFs and others managing trillions of dollars of wealth all have a specific set of issues around aggregation, reporting, billing, liquidity management, document management, all while dealing with difficult issues like multi-currency, partnership accounting, etc…”

Top Technological Developments of the 21st Century

Online shopping has swept people up across the globe, and was recently voted the biggest technological development of the 21st century in Britain. The majority of the world’s retailers offer online shopping opportunities, and other websites such as 6pm.com and overstock.com were created specifically to help people save money while shopping for their favorite brands on the internet.

Another internet-related breakthrough of the 21st century is online banking. Banks such as Doral Bank, which is based in Puerto Rico and New York, understand that providing their customers with online options has many advantages, including the ability to effortlessly verify account balances, transfer money between accounts, make secure payments from the comfort of home and review recent payments and other financial activity. Internet banking also allows people to keep tabs on their finances without too much effort; email alerts, reminders and confirmation requests help customers stay on top of their various accounts, transactions, savings, cashed checks and more.

In Britain, 75% of the population use online banking services. According to the British vote, the top five technological developments of the century include online shopping, internet banking, mobile internet, digital TV recorders and online film streaming services.

Jean Fiddes of E.ON said: “Our research shows consumers are increasingly using technology to make their lives easier and save money on everyday costs… Online shopping and banking and on-the-go entertainment were all at one time considered ‘new’ technologies but are now very much a part of our day-to-day lives. And although we may get nostalgic about the good old days, many of us appreciate the convenience and control technology can offer.”

 

 

Outlook for the US Stock Market in 2014

US stocks had an extremely positive year last year, but 2014 has already begun to shows signs of unpredictability. Reactions are mixed, with some claiming a correction is imminent while others believe the market can still improve. A more recent concern is of contagion from emerging markets.

CIO at JP Morgan Private Bank Richard Madigan explained that the current market differs greatly from that in the late 1990s.

“We came in to this year expecting markets to be more volatile based on the fact that they, like the global recovery, are transitioning to a more normal environment,” he said. “We’re already seeing indications of this as volatility has already picked up across asset classes. Consensus opinion is currently pointing to emerging markets as the cause.”

According to Madigan, JP Morgan has “significantly reduced investments in foreign currencies, commodities, EM debt and EM equity markets” throughout 2013. In some cases, they “cut 10% to 15% of portfolio exposure,” he added.

Madigan’s outlook for the year is “built around the continuation of a slow-but-steady global recovery.”

The New Approach to Non-Profits

Bankers, investors and entrepreneurs are taking a new approach to philanthropy with finance-focused projects aimed at supporting global causes.

“We get good yield,” explains Andrew Harris, an adviser of private equity firms at Forum Capital Partners and vice chairman of the non-profit Resolution Project. “We think it’s very different and, to use a Wall Street term, very differentiated.”

Harris is one of many young bankers who are working to aid those in need without deserting their careers or neglecting their aptitude for finance.

Andrew Klaber, an analyst at Paulson & Co. and founder of the non-profit Even Ground, states: “Among this generation- our generation- is a deep passion and interest in learning, earning and returning simultaneously. You just see an unmet need in your research, and research is what we do on Wall Street.”

Klaber’s Even Ground provides education and care to African children who are affected by AIDS. The organization has distributed more than $800,000 for the cause since its inception. Even Ground co-founder Julissa Arce, who works for Merrill Lynch clients at Bank of America, added:

“The first time I felt like I made it wasn’t when I made director. I felt like I made it when I launched this fund.”

Tim Kleiman, an analyst at Golub Capital, is also working on a project to fund higher education in Africa. He explains that the 2008 financial crisis also had an impact on his efforts.

“There’s been a cultural humility that’s come out of the financial crisis,” he says. “When you’re confronted with these really humbling events, where you see the meltdown of these systems and the sad human costs of that- that were not necessarily the result of anyone’s intention- for me it galvanized my thinking.”

“That world that I’m imagining, where I’m a partner and I’ve made all my money, who knows what that world’s going to look like? So why not try something now?” he added.

Small Business Wins Super Bowl Commercial

goldiebloxGoldieBlox, a small business that makes toys for young girls, is thrilled to have won the grand prize in a small business competition by Intuit. Now, the business is preparing to launch a 30-second Super Bowl commercial during the game’s third quarter.

GoldieBlox toy sets include a book, blocks, wheels, cranks and additional parts for building structures with moving parts. The business owner, Debbie Sterling, is a trained engineer from Stanford University. She launched the project after realizing that construction toys are marketed primarily to boys.

The business won the commercial competition in a vote by both Intuit employees and the public. The business is required to pay for the commercial, which is estimated to cost around $4 million. The competition also requires the winner to be able to meet the increased demand in products that may result from Super Bowl commercial. The audience is estimated at over 100 million.

According to Sterling, the brand is prepared for such an order surge. The business already sells to Toys R Us as well as over 1,000 other specialty stores throughout the United States and Canada. Now, the brand has hired another company to help with shipping and has teamed up with a second factory in China.

“We’ve been doing our due diligence over the past couple of weeks to make sure we’re ready,” Sterling said. She added that GoldieBlox has learned from a previous experience with Kickstarter to always be prepared for orders. “We had over 20,000 preorders for toys we had never made. We had to figure out how to manufacture them and ship them here.”