Wealth - Lessons Learned

Look for transparency and practice restraint to minimize risk


Former star of M*A*S*H Wayne Rogers has re-emerged as a nationally respected investment manager, finance expert, and Fox News contributor. As CEO of Wayne M. Rogers & Co., he shares his personal investment philosophy.

Rogers emphasizes that many — perhaps most — high-net-worth investors weight their assets in the bond market. “Remember, their concern is preserving capital, not making money,” he says. “In that regard, the danger for bonds is that the Fed holds interest rates artificially low and that, at some point, rates will increase. When that happens, the value of their bond portfolios will diminish. These portfolios must be hedged, or they will suffer accordingly.”

How to do that changes daily because of the fragile global economy. Though Bernie Madoff was headline news as far back as December 2008, his legacy endures.

“Clients have more of a desire for a crystal ball that doesn’t exist,” says Jim Casey, president and CEO of Integrated Wealth Management in Palm Springs. He finds investors researching more to assuage risk and, as they do with doctors on medical diagnoses, seeking second opinions from wealth advisers on financial decisions.

Investors manage risk better by assuming more personal responsibility for their portfolios. “They are looking at the names on the street,” Casey says. “It was very disconcerting for everyone to witness such a dramatic drop in those gold-plated names on Wall Street. The lesson is that investors must remember how painful last year was so they pay more attention.”

Knowing where your assets sit these days and who is watching them is key. It’s all about transparency. It can mean the difference between substantial gains or losses. Who holds your assets? Where does the ultimate fiduciary responsibility rest? Who is controlling the money? Who is the clearinghouse? Who is the custodian? Do you know how they differ? Most importantly, know who is making money off your money. Understand all the fees.

Rogers feels strongly about transparency and investors taking responsibility. “Investors should protect themselves by getting appropriate information that has been appropriately audited,” he says. “They should only invest in those things they understand, in those companies that have a proven track record and no history of financial questionability.”

Rogers offers examples of indications that something is wrong: a rapid change of auditors, a constant change of CFOs (HealthSouth), the existence of off-balance-sheet entities (Enron), and the private life of the CEO (Dennis Koslovsky, Tyco). “Investors need to do their own due diligence or not invest where they cannot see,” Rogers says.

Investors manage risk through greater self-protection. Brad Cohen of Venable LLP, a national law firm based in Baltimore and Washington, D.C., hears it daily. “Clients now vet their decisions with me. They bounce other people’s advice off me,” he says. “I get lots of Madoff-type questions to make sure [bilking] doesn’t happen to them.”

Philip DeMuth of Conservative Wealth Management LLC in Los Angeles offers his own take on what investors need to do for their portfolio and peace of mind. A clinical psychologist and co-author with Ben Stein of best-selling personal finance books (including The Little Book of Bulletproof Investing due out this spring from John Wiley & Sons), says, “The most sensible thing people do to protect themselves is keep a lot of cash. Relatively few high-net-worth types employ hedge funds profitably. Bonds and cash are the investor’s best friend whenever a once-in-a-century Category 5 hurricane hits the financial markets, which seems to happen about every 20 years or so.”

Cashing out when you need to stay put and ride out the storm is entirely different. DeMuth cites clients that ran scared and cashed out when the hurricane hit to “feel better.” They thought they were minimizing risk. Many are now second-guessing their decisions, assessing their hard losses as the market rebounds.

Rex Ramsey, senior wealth adviser and vice president of Union Bank Private Banking, has clients who “have that gnawing feeling that they must get back into the market now from their cash positions.” That could breed trouble if investors don’t show restraint. “Right now there aren’t too many alternatives for ‘safe’ rewards,” Ramsey says.

Lessons and legends abound on Wall Street these days. The best strategy for investors: educate, educate, educate.

Investor Education Resources

Comments to this website are moderated by staff. While all comments are welcome, we encourage all to be polite and please do not use this system for advertising or business promotions. Any complaint towards a business or service should be directed directly to that business and not posted here. If anyone has a complaint that a comment is defamatory, please contact me at tmay@palmspringslife.com and I will take appropriate action promptly. Thank You

Add your comment:
Edit Module
Palm Springs Life
Edit ModuleShow Tags

Related Articles

The Ten Tenors May Change Members, But Music Remains Universal

Even though the makeup of The Ten Tenors has changed over its 20-year existence, the sound they make remains profoundly popular.

Explore Palm Springs: Thanksgiving at the Palm Springs Tennis Club

On Thanksgiving Day 1952, Palm Springs Tennis Club members and their guests were astonished to see the club transformed into a glittering French picture.

Andalusia Golf Clubhouse Dedication - Nov. 13, 2015

More than 300 people turned out to witness the ribbon-cutting and dedication ceremony of the clubhouse, which was followed by the club's season-opening party.

The Vault at Bighorn Reveals a Priceless Car Collection - Nov. 6, 2015

Exclusive to Bighorn members and their collectible vehicles, The Vault at Bighorn covers 24,000 square feet and houses 50 automobiles and four motorcycle spaces.

Big Wheel Tours Brings Desert Wonders Closer

For Evan Trubee, a lifelong passion in cycling evolved into a 20 year business venture in outdoor-guided tours called Big Wheel Tours in Palm Desert.
Edit ModuleShow Tags

Promotions + Contests

McCallum Theatre Broadway Blockbusters Experience!

McCallum Theatre Broadway Blockbusters Experience!

Enter just once for a chance to win tickets to one of the four 2015-2016 Broadway Blockbusters Series shows.
Romantic Palm Springs Getaway

Romantic Palm Springs Getaway

Experience the beauty, romance and excitement of the Palm Springs area when you enter to be the lucky winner of this romantic couples getaway
GuestLife Magical Monterey Bay Experience

GuestLife Magical Monterey Bay Experience

Cartoon Caption Contest

Cartoon Caption Contest

Each month, we provide a vintage 1950’s cartoon illustrated by Alice Rovinsky. You are invited to submit a caption or vote for your favorite caption.