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Morningstar Investment Conference 2011 Preview

In a few hours several hundred of us [correction: a record 1,650 as of noon] will hear PIMCO’s Bill Gross address the Morningstar Investment Conference 2011 in Chicago.

It will be interesting to see how this year’s edition compares with the previous pre- and post-crash conferences. Three years ago the conference opened with the other PIMCO guru, Mohamed El-Erian. Months before all hell broke loose with the Lehman fiasco, he showed charts that depicted the market’s perception of Citi and Goldman Sachs as riskier than Brazil or Mexico. At the time, the revelation was shocking and heretical: should enormous American banks be regarded as riskier than Latin American countries? Bingo.

The Morningstar conference is where the asset managers discuss the big economic and investment themes that financial advisors will take back to their client investors, whether they are pension funds or your retired mother. These ideas then trickle into brokerages, financial planners’ offices, bank branches, rollover IRA campaigns, and 401(k) retirement plan education. Morningstar is the first pebble in a ripple of communication that moves in outward waves throughout Lake Advisor.

Russel Kinnel’s preview says “Last year, I was struck by the split between managers and economists who view the world from the top down and managers who analyze from the bottom up. The big-picture speakers were bearish, but stock-pickers were finding plenty of bargains. Sure enough, the market is up more than 20% since then.”

This year, as in every year, I am most curious as to what the industry has to tell retail investors and advisors. My interest lies not in what wealth managers will be saying to their clients, but what will eventually be said to the smallest investor — the 401(k) plan participants, the ones who are most likely to be permanently screwed by a miscalculation in asset allocation or investment fashion.

Although it is always interesting to hear about cutting-edge topics like hedge-fund strategy in mutual funds, the lowest common denominator is what is of greatest importance, demographically speaking. As we face the first wave of Baby Boomer retirement, the success or failure of the defined contribution system will be determined by the quality of life afforded by self-directed and largely self-funded investments. This great social and financial experiment depends heavily on the insights of managers like those seen at the Morningstar conference.

>> During the conference I’ll be tweeting.

Recent Comments
  • Leslie Banks says:

    Several hundred is right! We’re expecting record attendance this year. Thanks for your post about the Morningstar Investment Conference. Looking forward to hearing your observations and what you learn. Please be sure and say hello — get to put a face with a name IRL.

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