newjerseynewsroom.com

BY WARREN BOROSON

NEWJERSEYNEWSROOM.COM

BOROSON ON MONEY

Almost everyone, it seems, is pessimistic about the stock market now. A notable exception is Roy Williams, a Chartered Financial Consultant who is chief executive officer of Prestige Wealth Management in Flemington, a company that does comprehensive money management. He believes that the stock market will end the year on the plus side, in the high single-digit percentage range.

His firm is different from wirehouses like Merrill Lynch, Williams says, because it provides continuing accounting services. A CPA on staff sees that clients offset gains with losses, convert traditional IRAs to Roth IRAs when appropriate, and do other tax-smart things throughout the year.

How does Prestige differ from other money-management firms? Well, Williams answers, it has a Chartered Financial Analyst on staff. (CFAs are the elite of the investing world. When it comes to investing, CFAs tend to be the cream of the cream, and it's a nightmarishly difficult designation to get.)

Here's a transcript of a recent interview with Williams:

NJNR: I'm glad to finally find someone who's optimistic about the economy and the stock market.

Williams: If you just look at data out there, you'll see that institutions are buying. And FedEx and a bunch of other companies have increased their outlooks. Most companies have had good earnings. We're also seeing sales growth. The gross domestic product is back to where it was at the height of the market.

NJNR: But corporations don't seem to be expanding or hiring more people.

Williams: You're seeing companies hiring people and firing people. Some of the pharmaceuticals are hiring people at the same time they're laying them off – or offering retirement packages to people over 55. They're replacing them with lower-paid employees.

One problem is unemployment insurance. You get people using the system who don't need to use it. There are 35 million people between 55 and 65, and some collecting unemployment were two-income households. And some of them wanted to retire anyway.

But while I'm optimistic, I'm also cautious. There are headwinds out there. Government spending is a problem, on both the state and federal level. That's why we have the governor of New Jersey trying to get it under control as best he can.

NJNR: As a money manager, do you buy individual stocks or funds?

Williams: Both, but mostly mutual funds.

NJNR: Are there any fund families you like especially?

Williams: We have nine or ten in our portfolio, but we don't have favorites. What we buy depends upon what our clients' needs are. And just as in baseball, no one team has the best shortstop, second baseman, catcher, and pitcher, no one fund family has the best portfolio managers.

We try to get the best at each position. And we don't just look at the upside. We want downside protection, too.

NJNR: Do you use index funds?

Williams: We do sometimes. But we believe that in this market, active management will outperform - in the large- cap growth area, in small-caps and mid-caps, and in international investing. It's really a stockpicker's market.

NJNR: What's the minimum account you will accept? And what are your fees?

Williams: The minimum amount of investable assets we typically work with is $250,000. I will generally work with clients with over $1 million in investable assets. Fees depend on what we're doing for the client and the size of the account. We also work by the hour.

NJNR: Do you buy growth stocks and funds or value stocks and funds?

Williams: We're balanced, but we overweight growth in large caps, value on the small-cap side.

NJNR: What about foreign stocks?

Williams: Two years ago there was a big run-up, so we lightened up. Today we're under-weight Europe.

NJNR: Gold?

Williams: No, because most of our clients are retired or planning for retirement. The prices can have an upside, but I think you already missed a big part of it. In most cases, we don't favor commodities.

NJNR: What are some of the worst mistakes that investors make?

Williams: Selling when the market is down, buying when the market is going way up. For retirees or the near retirement, the biggest mistake is not having a portfolio that will meet their needs for income.

NJNR: Can you tell me a little about yourself?

Williams: I was born in Georgia and grew up in Old Bridge, then graduated from Lycoming College in Williamsport, Pa. I've been involved in finance for more than 28 years.

NJNR: I sure hope you're right – that the market is will up by the end of the year!

Warren Boroson is available to give talks on "How to Invest Like Warren Buffett," at no charge.