J.P. Morgan Asset Management on Monday, Jan. 3 sent a first-quarter 2011 market guide to its network of financial advisors as a tool for asset allocation and discussions with clients. Strikingly, the free guide tells its stories of the markets in pictures much more than it does in words.
The 58-page J.P. Morgan Funds Guide to the Markets – which is chockful of index charts, returns by sector, equity scenarios, fixed-income yields and returns, mutual fund flows and global commodity performance—was published in electronic form on Jan. 3, the first business day of the quarter, updated through Dec. 31.
“We don’t put commentary in the guide itself. The reason is that we want people to be able to express their views or their companies’ views,” said David Kelly (left), chief market strategist at J.P. Morgan Funds.
Seeing the Present With Clarity
The guide covers everything from the nature of the economic recovery to specific investment opportunities in stocks by industry, style, size and investment approach. It provides a wide-ranging perspective on risks and opportunities for investors as well as a timely and logical framework packed with statistics and economic data for discussing markets issues.
Just as important as being timely, the guide is not a prediction of the future, Kelly said. It is a picture of where the economy is right now.
“The reason we feel so strongly about that is that we spend far too much time in this business trying to make predictions about the future when we really don’t know what’s going to happen short term,” he said. “The secret to long-term success in investing is really not so much seeing the future with some kind of mythical vision. It’s seeing the present with clarity.”
Just the Facts
Plus, the guide is unbiased, Kelly asserted.
For example, one key piece of data, “Economic Expansions and Recessions,” a chart on page 13 of the guide, shows that the recent recession lasted 18 months, but that the current expansion has lasted just as long.
“These are just the facts,” he said. “Somebody else could look at page 13 and decide we’re due for another huge recession. I don’t agree with that, but they can express their own view. People like having something which isn’t trying to sell a view, but they can decide whether they like our view or not or parts of it and use it themselves in their practice.”
The guide goes through the economy in some detail, showing where it is in terms of growth, jobs and interest rates. Kelly pointed out that charts in the equities section show that equities “look pretty cheap given where the economy is,” and conversely, fixed income looks expensive, particularly Treasuries.”
Other features accompanying the guide include tips on how to build a portfolio and how to start a conversation with a client. J.P. Morgan Asset Management also conducts conference calls based on the guide. For example, a conference on Thursday drew an audience of more than 1,500 financial advisors calling in to hear about the new guide.
Read David Kelly’s thoughts about extending the Bush tax cuts at AdvisorOne.com.
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