I am delighted and indeed very flattered to have been invited to write for WVFC, joining this group of very talented women. The idea is that I will be able to add some commentary on the financial world, which is the one I come from. I am one of those people who has reinvented themselves several times and am now in the process of doing it again. These are stressful times for all of us, and the financial news is often difficult to deal with.

It is especially hard for those of us who, as the New York Times noted recently, had viewed ourselves as close to an age of not necessarily  retirement, but perhaps a rededication to new passions and objectives, with fewer demands. I am discovering many women who thought that their retirement was set but who now find themselves going back to work, or trying to. I will look forward to hearing what is on your minds, and will do my best to tell you how I best see this strange new environment we are all a part of.

I do not manage portfolios, though I follow the financial markets and have spent a good portion of my career working with wealthy international clients to define their investment profiles and risk tolerance. I do, however, care a lot about who is managing the portfolio and about understanding the philosophy and strategy of that investment professional. If I don’t like what I see, I’m not shy about it: For example, some nine or 10 years ago, I did advise many clients against investing in Fairfield Greenwich, a major feeder fund for now-convicted Bernard Madoff, because I didn’t trust the group.

Last week I met with the woman who has been my investment adviser for years. Enormously thoughtful and analytical, she is also extremely foresighted; to give you an idea, she raised cash for us in the summer of 2007 by selling a decent portion of our equities. Back then, her observation was simple: “We have forgotten about counterparty risk, and the market is overheated.” At the time it seemed obvious to her, and when she mentioned it to me it was obvious that she was right. There are not many others who saw it as clearly.

So, how do you find an investment adviser like that, someone who can help you through these uncharted times?

The first key element is that it must be someone you trust. It must also be someone with time in the market, who has seen more than one cycle of boom and bust, someone who is able to demonstrate a solid track record in both equity and fixed income. The adviser must be someone who speaks your language and can explain, in understandable lay terms, their market outlook, the good and bad elements their forecasts anticipate, and the decisions they have made about your portfolio to take advantage of the good or protect you from the worst of the bad.

What should you be doing as the investor?

Always ask questions. There is no rocket science about the market. It is all based on numbers. If someone suggests that you invest in something you simply do not understand, please don’t do it.
Know that you do not need to own the Standard & Poor Index (S&P) or a portfolio that mimics its performance. You do not need to own complex derivatives. There are times, like these, when it is better not to have investments in all the industries included in the S&P, as some of these sectors will take longer than others to recover given the cycle we are in. Ideally, look to own companies within industries that have weathered this period well, companies that are positioned to grow going forward.

Be sure your adviser and team use fundamental analytical techniques, looking into the company’s markets, its industry peers and competitors, its balance sheet (above all) and company management. A good adviser should be able to give you detailed and extensive reasoning for every stock or bond bought or sold in your portfolio. He or she should be following the portfolio companies consistently.

My personal belief is that one should buy for the long term. Wall Street often interprets this as six months. In my book, long-term means a number of years. If you like a company, its management and its product positioning, then you should want to stick with it over the longer term and benefit from solid growth. You should not be looking for the short-term gain and a rapid turnover of all the portfolio holdings. If you do the latter, you will be running more risk and spending more money in transaction fees for every buy and sell.

Collage via Gothamist.com

Now, what about Bernard Madoff — the investment adviser who so many trusted and who turned out to be a criminal now awaiting sentencing?

By all accounts, Madoff did not have a well-articulated investment strategy. He could not explain trades, his investment philosophy or his bedrock principles. If you had asked specific questions about his holdings, you would not have gotten a straight answer. That is a giant red flag.

Besides, an adviser is not your custodian. Your portfolio assets should be in the hands of a well-recognized bank, or custodial or brokerage firm, one that sends you independent monthly statements detailing the holdings in your account. Your investment adviser, with your permission, might and often does have the ability to buy and sell securities in your account. They should have no power to transfer or withdraw funds. Your adviser will normally advise you of his or her intentions prior to any trade; a trade confirmation from the custodian will confirm that the trade has taken place and at what price.

When I was with my adviser, reviewing the last six months and looking forward to what we might envision in the near term, we both agreed that this recovery was going to be very long and very slow. In the last quarter of 2008 we fell off a cliff, and it will take a long time to heal our wounds, get back on our feet and begin the climb again.

We had become a nation over-borrowed, a nation of negative savings. Acquiring goods and services with air and promises is certainly not a sustainable trend. Those of us investing with Mr.Madoff even bought air. If there is one lesson to be learned from these last three quarters, it is that fundamental values matter: trust, analysis, integrity, honesty and full disclosure are not bygone concepts. For all of us, it’s back to basics.

Antoinette Geyelin, known as Toni, is a native New Yorker.  A graduate of the Brearley School and Barnard College (AB Latin American Area Studies), her banking career began at the Chase Manhattan Bank in its prestigious Credit Training Program. Among the first women to be accepted into this program, upon completion she became the first female credit officer sent by Chase into the Latin American market. Fluent in Spanish and subsequently Portuguese, Toni has spent a significant portion of her career working with Latin America as a commercial banker, an institutional banker, a sovereign debt specialist, and most recently as a private wealth management executive. Adept at managing change and steering turnarounds in the financial service sector, she has held executive positions with Bankers Trust, CIBC Oppenheimer, Deutsche Bank and as Treasurer for Sotheby’s. Additionally, Toni managed the startup of a registered investment advisory firm for a group of Brazilian investors and most recently assisted her husband in the launch of his new business.

Married with two “almost” grown children, Toni currently serves as a Trustee with the Walter C. Klein Foundation. She is a former trustee of the Brundage, Story and Rose Investment Trusts and the Diocesan Investment Trust for the Episcopal Diocese of New York. She served as a director of TIP Neighborhood House in the South Bronx and the Executive Council on Diplomacy (formerly the Executive Council on Foreign Diplomats in America).

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  • Mary Patel January 25, 2014 at 4:46 pm

    Great piece. I appreciated reading that.

  • alice cathrall June 23, 2009 at 8:14 am

    I am looking forward to your comments on investment and enjoyed your writing on the new environment and the importance of fundamental financial values.

    When the madoff scandal hit ,I was again reminded of the precarious nature of our security.How could a basic fraud like this occur in our modern,all barriers to knowlege gone world?People still want desperately to be taken care of ,and in this case at least,by someone who provided little reason to be able do so except offer an aura of exclusivity.I am reminded of WC Fields quip about never wanting to be a part of a club that accepted him and another comes immediately to mind about preferring to be dead rather than be in Philadelphia,from where I am writing so, to make it clear I do not subscribe to either but consider myself debriefed.
    But,I do subscribe to the basic tenants of trust,analysis,integrity and disclosure of which you speak.
    I also think it is important to note that the skills required to make wealth are not neccessarily the same set to maintain it.In the book,”Nudge”,people are defined as either homo econmicus,those who choose unfailingly well through unbiased reasoning, or homo sapiens,who do indeed have real trouble ,and,predictably err.If I just give my hard earned money to an elusive,but exclusive phantom he will produce outsized returns for me!
    So,I think it is very important to take a lot more responsibilty for ourselves .Don’t transfer all the responsibility ,be engaged and informed.Ask for the real returns after expenses and taxes.Identify your risk tolerance and develope a plan that ensures your financial stability.
    I recall one of the characters in “Pride and Prejudice ” defining real wealth not as castles or carriages drawn by fine horses, but as an income .It is also important to talk about wealth management and I welcome your knowlege.Help please.
    So,now that I have completed my work for the day ,by all means Mr.Darcy,lets dance.

    ou speak .

  • Dr Patricia Allen June 23, 2009 at 8:04 am

    Dear Toni,

    Welcome indeed to our conversation about issues that are of importance to our demographic: those who have the most to lose and the least amount of time to recover after the economic crisis began.

    We look forward to analysis and common sense and as an Irish American, I personally just want to know how bad it is and what I need to do to survive. I don’t want hope. I want the truth.

    Your years of experinece in Latin America and your resilience in many of the volatile periods of the past in that part of the world do give you wonderful perspective that we will look forward to hearing about.

    This is a terrific inaugural essay and we expect that you will be prolific!

    Patricia Yarberry Allen