How savvy is your investment advisor? Ask these questions and find out.

By Dwight Cass


1 How scary is a wheezy dragon? China’s first quarter GDP growth of 8.1 percent was less than expected by most economists, but higher than many feared. Still, a slowing China could have significant knock-on effects in commodity prices, demand for foreign goods and container-ship availability. How will it affect my business and portfolio?

2 Has the “Troika” run out of money? The E.U., the IMF and the European Central Bank began scaling down market expectations of another big infusion of money into Europe’s shaky banking system in April. Have the two “backstop” programs they’ve already completed done the trick, or do I still need to worry about Europe?

3 Is volatility going steady? The Chicago Board Options Exchange’s VIX index of the short-term volatility of S&P 500 futures has dropped like a stone since last year. That, in part, is due to massive short positions on the futures and on ETFs that track the index. Does this respite from volatile markets mean I can make long-term investment plans with more confidence?

4 Will my asset managers survive SEC scrutiny unscathed? The SEC is now deciding which managers need examination by using a “risk-based” evaluation approach. Firms that have not faced an SEC exam are almost sure to endure one, now that Dodd-Frank has required hedge and private equity funds to register with regulators. Could an SEC exam unearth problems that could hurt my investments?

5 Is the Volcker Rule going to generate an energy apocalypse? Yes, says a new report from energy consulting firm IHS Cambridge Energy Research Associates. IHS claims that the rule, which bans banks from making market bets with taxpayers’ money, will impede energy companies from hedging risk, and as a result the cost of natural gas, electricity and gasoline will all increase and unemployment will jump. Is this doomsday report, which was commissioned by Morgan Stanley, at all credible?

6 Should I Google “sell”? With a stock split that disenfranchises most shareholders, the search giant has revamped its governance structure to protect management. While the move may mean that management is focused on long-term profits, it also suggests that Google’s top brass expects the stock to suffer in the short term. Should I get out now?

7 Is the Eurozone preparing to split? Last summer it appeared impossible for countries to leave the single currency area; their euro-denominated obligations were just too intermingled. More recently, Eurozone economies have been reorienting assets and liabilities more along national lines. George Soros believes these changes will eventually allow the breakup of the Eurozone to happen without an economic meltdown. What would no more Eurozone mean for my European investments?

8 Is there an investment play in Big Data? The massive flow of data generated by everything from financial markets to consumer purchases is a growing worry for operations chiefs at companies that use Big Data. Even when they can process the huge amounts of information, it’s expensive. For every $1 a company spends on data, it spends an additional $5 processing it, according to market data specialists. Are there investment opportunities here?

9 Will cash-fat tech companies embrace dividends? Apple has finally decided to use some of its nearly $100 billion in cash to pay a dividend and buy back stock. Lots of other tech giants are sitting on cash hordes. Will Apple’s move cause them to follow suit, and if so, should I overweight the tech sector now?

10 Should I worry about the Buffett Rule? Thanks to Congressional Republicans, President Obama’s proposal to make everyone earning over $1 million annually pay 30 percent of their income in taxes may look dead in the water, but it seems unlikely that Congress won’t raise some taxes on the wealthy. What tax changes look likely, and how I should prepare for them?


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