Fritz Meyer Says The Wild Ride In Stocks Is Unlikely To End Anytime Soon; Tell Your Clients Hot

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The wild ride in stocks is likely caused by a structural change, economist Fritz Meyer said earlier this week, and it may not end anytime soon.

 

Meyer, an independent financial economist, says technical market issues are likely the cause of the extreme volatility experienced in recent weeks in stock prices. The loss of “specialists” on the New York Stock Exchange — market makers who used to be on the floor of the exchange and who would buy stocks oversold on emotional plunges — is likely a major factor in the recent volatility, along with computerized trading programs.

 

The Dow plunged 1000 points in the 30-minutes after trading opened on August 24. On three of the 13 trading days since then, stock indexes lost 3% or more of their value in a single day. At the recent low, the correction amounted to a 13.4% loss from the all-time high achieved in May.

 

According to Meyer, the loss of specialist firms over the past decade, along with the rise of momentum-following program trades, has exacerbated stock volatility. He sees the increased volatility displayed in the opening minutes of trading on August 24, 2015 as part of a growing pattern of extremes, like the Flash Crash of 2010. These high-speed descents were caused by cascading sell orders triggered by momentum-following computerized trading programs, Meyer says. The void left by market-makers will get filled eventually, he says. That's how markets work. If Meyer is right, advisors are well-positioned to be buyers when it happens. 

 

Meyer has over 35 years of Wall Street experience, but relishes his role over the past five years as an independent observer. Meyer had served as senior strategist for one of the world's largest investment companies for nearly a decade. In 2009, Meyer became an independent economist and found me through a mutual friend, economist Ed Yardeni. Meyer has no product to sell, other than his research and making speeches at client events and conferences for financial professionals. 

 

When someone with Fritz Meyer's credentials, credibility and monthly research says a structural change in the market has occurred and we should all be prepared for this kind of extreme volatility to stay with us, it is news that you want your clients to know. If he is right, The rapid descents to irrational lows will continue and it is likely to make clients uncomfortable. If you don't say anything to clients, if you allow the significantly higher volatility levels to go on without saying anything, you risk looking bad to them.

 

In addition, if Meyer is right and these rapid irrational descents continue, even as the economic data forecast expansion, it would represent an opportunity for advisors. Advisors would seem well-positioned to fill the void created by electronic algorithmic trading.   

 

See below reviews from attendees of Fritz Meyer's webinar this past Tuesday's. He received an amazing star-rating, yet again, of 4.8.

 

Click on the image below to see the article emailed Friday night to the clients of advisors who subscribe to Advisor Products email newsletter.

 

Reviews of Fritz Meyer's session:

  • Very informative in these crazy markets
  • Great!
  • Great recap of things!
  • Fritz did a good job presenting current market events and breaking down economic data.
  • Very informative
  • Outstanding
  • Fritz covers many bases & boils the content down to be very digestible
  • Very well done
  • Great as always!
  • Helpful and concise
  • Best ever!!!
  • Great as always. He really puts the whole thing in perspective.
  • I think this was the best I've seen so far. I really appreciated Fritz's new slides. He really helps to put things into perspective.
  • The historical perspective is always well presented and very helpful.
  • Some new information from previous updates - very helpful
  • Excellent presentation with putting everything in proper perspective.
  • Fritz is always great!
  • Loved it, current, fresh, educational.
  • Very good. Well documented.
  • Fritz does a great job with his presentations.
  • It was great, very relevant information.
  • Good stuff
  • The sound went out at the end of the webinar before the q & a
  • Good as usual.
  • Fritz is the man! So concise and dead-on.
  • Excellent as usual. I appreciated some of the current updated slides.
  • Fritz was great and even kept it to an hour! As always, he was informative and backed up thoughts with data.
  • Excellent
 

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  • holds a CFP®, CIMA®, CPA, CPA/PFS, CFA or other designation requiring CE annually 
  • values monthly CE classes by Fritz Meyer, Craig Israelsen, Bob Keebler, Frank Murtha, or Andrew Gluck
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MEMBER REVIEWS 
William Desormeau, Jr.  
It is not possible for me to overstate the cumulative value that Craig, Bob and Fritz have added for over 10 years to my investment advisory practice, as well as for personal and family financial planning. A4A gets my highest recommendation
Lynn Najman, CFP®
I’ve subscribed to A4A since its inception, and always find it intellectually stimulating and on point. It’s one of the few CE solutions out there that doesn’t waste my time by pushing product or talking down to me.

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Pete Deacon, CPA, CFP®
A4A has had a profound effect on my business. Since 2009, I’ve relied on the consistent messaging and updates to run my business successfully. Being able to present the information from Bob, Fritz, and Craig's ongoing CE webinars has been a significant benefit.

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Fredric Mayerson, MBA, PhD, CFP®
I've been a financial professional and professor of finance for 35 years and find Fritz Meyer and Robert Keebler to be among the most engaging, incredibly knowledgeable, and experienced presenters I’ve encountered. They deliver an extraordinary amount of information in an extremely interesting way — sequentially and developmentally, utilizing pedagogical tools and techniques that few possess.  A4A to is the most consistently excellent CE program available.  
Ron Roge, MS, CFP®
I’ve been attending A4A many years because the CE classes are outstanding, and my time is valuable. Though I have over 35 years of experience, I’m always learning something new on A4A. I attend fewer conferences now because the CE is generally not advanced. If you want to learn from the best, in a faster, easier, and less expensive way, I highly recommend A4A.

John R. Day, CPA/PFS®

I’ve been a member since 2011 and never miss the monthly webinars with Fritz Meyer. I appreciate Fritz’s independent views on the economy and markets and Bob Keebler keeps me updated on excellent tax planning ideas. A4A is a great value!

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Norman Politziner, CFP

I wouldn't miss a Fritz Meyer webinar unless my pants were on fire. I've relied on Andrew Gluck's knowledge systems --client communications and CE -- for two decades. It's simply the best solution for tax, financial, investment, and risk-management professionals.®   

Dan Hawley, CFP® 

A4A, for over a decade, has been a great resource for useful and accurate information and CE. A4A and Advisor Products are bargains for an advisory practice. 

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Kevin Brosious, MBA, CFP®, CPA/PFS®

I get CPA CE credit and CFP credit for the webinars.  But not only that, the A4A content is terrific