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Why Fairness Trumps Equality In Sharing The Family Wealth

By Charles Lowenhaupt

Question: When should wealth owners plan to leave unequal portions to their children?

Answer: Strange as it might seem, “almost always.”

Before dividing an estate, wealth owners need to get past the definitional ambiguity of “equal” and “unequal.” Most wealth holders define “equal” as a dollar-for-dollar split where each child gets the same amount. Yet another perspective might consider meeting needs equally, regardless of amounts. Research shows that about two-thirds of people choose dollar-for-dollar equality at death — but in our experience, most opt for equally meeting needs while they are alive.Read More

What Can’t Money Buy?

By Charles Lowenhaupt

The challenge of living with great wealth or raising children with great wealth is putting money in its place. That notion may seem oddly counter-intuitive because most people believe they have dominion over their money, not the other way around. In fact, money poorly managed often exerts a force of its own and has unintended – and often negative – consequences.

The key question is this: How should the wealth creator or wealth inheritor lead life to its fullest without drowning in the administration and emotion that can come with riches?Read More

What Will 2015 Bring: Three Economic Scenarios to Consider

By Donna Gilding

2014 turned out to be a notable year for a number of reasons even excluding geopolitical risks and global financial crises:

      • Small cap stocks had a great December and fourth quarter – up 2.97% and 10.06% respectively
      • REITS and long Treasuries were the best performers for the quarter – up 14.35% and 8.62%
      • REITS and long Treasuries led the markets for the twelve-month period – up 30.26% and 25.07%
      • We did not see a lot of folks betting on either REITS or long bonds of any flavor.

2014 is the sixth year with positive returns, the third year of double-digit returns and the 4th longest bull market in post-war history.Read More

Mobility and Freedom From Wealth

By Charles Lowenhaupt

The noted journalist Robert Frank tells us that the world’s rich are buying visas and passports to the tune of billions a year. Large private jet sales are booming, and luxury travel is being sold in every magazine and newspaper. A friend of mine whose parents were Holocaust survivors owns hotels in six or seven places around the world and in each maintains a penthouse. When I ask whether his real estate holdings are good investments, he says they are his best: “They lose money, but they allow me the comfort of knowing that I can always leave where I am to find security somewhere else.”

If wealth is for anything, it is for freedom – freedom to lead the life you want to lead, freedom to become all you can become, freedom to find freedom when a homeland does not offer it, and freedom to travel. Mobility is a luxury that the rich have become accustomed to whether they come from the U.S., from China, from Russia, from Saudi Arabia or from Venezuela.Read More

A Surprising Period of Unwavering Confidence

By Donna Gilding

Even as the headlines include wars in the Middle East and Eastern Europe, and as the European Central Bank announced further rate cuts, the consensus of our managers is that complacency and confidence continue to exist in the US. For example, none of the following events was greeted with apprehension about overheating or an imminent correction!

  • In the four years ending in August 2014, the S&P 500 gained more than 80% and crossed 2000 mark for the first time
  • The new jobs numbers for August were disappointing and showed that the US failed to create at least 200,000 new jobs for the first time in seven months.

Last year, even the suggestion of ending of quantitative easing, created a spasm in the global markets. However, once the tapering started, the stock market took it in its stride.Read More

What Does It Take To Get Rich?

By Charles Lowenhaupt

In my experience, getting rich takes vision, hard work, and good luck.  Wealth inheritors have the luck, but they often lack the vision and hard work.  So preserving wealth is a whole different matter from creating it.

I have been very fortunate to have known wealth creators, either directly or through their descendants.  One of the most impressive I ever met was a Japanese industrialist who I had the privilege of meeting as a teenager.

He is still alive today and almost one hundred years old, and his life is instructive about what is possible.Read More

Market Tranquility and Geopolitical Risks in 2014

By Donna Gilding

Geopolitics and political economics typically have a lot of impact on the financial markets. Given all of the recent turmoil, it’s therefore surprising that the markets remain unfazed by the growing instability around the world.  Of note, we have looming civil war in the Ukraine, Cold War rhetoric between the West and Russia, territorial tensions in Asia and populist nationalism in Europe.  A Dutch columnist recently wrote:  “……If anything characterizes recent history, it is the degree to which the 19th century, unexpectedly and to the astonishment of many, makes itself felt in the 21st century…”Read More

The Joy of Collecting

By Charles Lowenhaupt

Philip Shulman was one of the great collectors I have ever met.

When we were first acquainted, he had just retired as a postal worker in San Francisco. He had spent many years in the military and then working for various companies before he took the position with the post office.  His wife had died and her two children, his step children, were his only family.  I was introduced by a Japanese print dealer who told me that for a number of years. Phil had purchased prints of the Sino-Japanese and Russo-Japanese wars, our own interest, but had not been heard of for five or ten years.Read More

Five Priceless Pieces of Wisdom

By Charles Lowenhaupt

For more than 100 years, we’ve been helping individuals and families manage significant wealth. During that time, we’ve learned a lot and wanted to share some of our collective wisdom – and humor – with our friends.Read More

Conventional Wisdom and Interest Rates

By Donna Gilding

Conventional wisdom in the investing world asserts interest rates will rise, but probably not for the next two or three years.  The Bank of England and the Federal Reserve seem to be shuffling toward an exit from easy monetary policy.  In addition, the European Central Bank seems to be considering an easing.  On March 25, Jens Weidmann, president of the Bundesbank, suggested that the ECB might have to be “a little more forceful to keep the Euro zone economy out of deflation.”  It is likely that the ECB will continue to be dictated to by its weakest members, which have been known to produce resentment and tension.Read More

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