Money Clip

Blog by Matthias Paul Kuhlmey

Matthias Paul Kuhlmey is a Managing Director & Partner at HighTower Advisors, where he serves as wealth manager to High Net Worth and Ultra-High Net Worth Individuals, Family Offices, and Institutions.

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  • The End of Oil… and Other Things

    Thursday, November 20, 2014

    Posted by: Matthias Paul Kuhlmey

    As featured on

    The news of oil having reached a 5-year low last week is nothing but bullish for U.S. consumers and corporations. Even though the black gold has been trading below $80/barrel, down -20 percent since June, the International Energy Agency (IEA) predicts that the current price decline is not over. Needless to say, many investors remain bullish on oil in the long run, and anticipate picking up bargains in many of the energy names that have suffered in the wake of the recent consolidation. The investment case and overall macro impact, however, are rather complex.

    To continue reading, please click here for the full article.

  • Collective Wisdom – MoneyLife Radio Show

    Wednesday, November 19, 2014

    Posted by: Matthias Paul Kuhlmey

    This week, many of HighTower’s brightest minds are gathering in Las Vegas for our semi-annual partners meeting and investment forum, which has proven to be a very exciting and intellectually stimulating means of generating investment ideas for the benefit of our clients. We look forward to sharing some of these ideas in the coming weeks. Related to this topic, this morning I made an appearance on Chuck Jaffe’s MoneyLife Show, along with my colleague Matt Harris, to discuss the various ways the Hightower partnership exchanges investment views, and the notable characteristics of our crowd-sourced asset allocation survey. Please click here to listen.

  • Patchwork Investing

    Tuesday, November 18, 2014

    Posted by: Matthias Paul Kuhlmey

    As featured on

     There is nothing like that safety pin to replace a missing button, or piece of tape to give the rearview mirror the last fix; it may not be pretty, but it works–at least somewhat. Beyond these rather frivolous examples, our tolerance for the imperfect has seemingly reached a new high threshold. Yes, I dare to address the state of our nation’s infrastructure, and for my message to be delivered clearly in this opening paragraph, please recall the last time you couldn’t avoid the gigantic pothole while driving down the street, the train that never made it due to flooding of the station or “signal problems,” or–a classic– when the power was out (again) for no obvious reason.

    To continue reading, please click here for the full article.

  • Emerge

    Friday, November 14, 2014

    Posted by: Matthias Paul Kuhlmey

    As featured on

    Emerging markets (EM) have fallen out of favor; long forgotten is the exciting heyday of BRIC investing, and tales of who would be the world’s next superpower. To the contrary, we have convinced ourselves that the U.S. has decoupled from the rest of a sluggish global economy, and that the domestic equity story is just about to really heat up. I am not so sure. Whereas it is difficult to develop excitement around many other developed markets, especially within the gridlock of Europe, it is quite apparent that developing markets are under-owned. And whenever the herd runs one way, it is time to emerge from the dust and take a different view.

    To continue reading, please click here for the full article.

  • Collective Wisdom – MoneyLife Radio Show

    Wednesday, November 12, 2014

    Posted by: Matthias Paul Kuhlmey

    This morning, my partners, Patrick Fruzzetti and Brian Amidei, and I made an appearance on Chuck Jaffe’s MoneyLife Show, to discuss the evolution of Emerging Market investing, various ways investors can access this space, and why we feel Emerging Markets are important in the context of a broader portfolio. Please click here to listen.

  • TV Interview: Emerging Market Opportunities

    Tuesday, November 11, 2014

    Posted by: Matthias Paul Kuhlmey

    This morning, it was a pleasure to make an appearance at to discuss unique investment opportunities in today’s major emerging market economies, as well as what may be the “emerging markets of the future.” Please click the following link to view the interview:

  • Sugar Rush Intermission

    Thursday, November 6, 2014


    Posted by: Matthias Paul Kuhlmey

    As featured on

    Have we seen the final curtain? Last week, U.S. policymakers ended the much-debated and controversial era of open-ended Quantitative Easing (QE); the once $85 billion of monthly asset purchases is now a thing of the past. Whereas the Fed balance sheet will stay large for years to come, in excess of about $4.5 trillion today, Ms. Yellen and her team are committed (or daring) to allow economic outcomes, instead of liquidity injections, to set the direction for capital markets.

    For the purpose of our discussion, it does not matter if the economy is on the right path or not, but more so that Ms. Yellen may be in the midst of preparing for undesired future outcomes. The recent pickup in economic activity should be proof of US resilience, and yet global output stands on fragile ground. The oft-cited decoupling of our domestic economy from adverse or even deflationary effects experienced in other parts of the world may prove to be elusive. The Fed needs to be prepared to reinitiate an accommodative stance, which is now an option.

    QE was not a recent “invention,” nor the result of the Global Financial Crisis of 2008/2009. The Japanese adopted this particular approach in 2001, in response to the late-‘90s asset-bust in real estate and stocks. While most market observers point to the vast differences between the land of the rising sun and the U.S., the story is rather similar. Paired with a consistent zero-interest-rate framework, Japanese QE has been an “on and off” policy for nearly 15 years, even though it has ultimately proven to be ineffective in addressing deflation, and has potentially even eroded the long-term stability of the domestic financial system.

    In the U.S., it is now for investors to endure a time of transition, likely marked by uncertainty: the “handover” from a liquidity-driven to a “real” economy. This evolution is a daring concept, especially considering a large-sized capital market as a result of asset-price inflation. As soon as volatility or deflationary domino effects “grip” investors again, the Fed will be very tempted to effectively act as the buyer of “last resort,” once more providing liquidity to the system. All in all, not a bad deal, as the original “Greenspan put” has morphed from Bernanke to Ms. Yellen, and yet it remains an unsustainable long-term measure should the real economy not come through.

    In early assessment, financial-repression policies have been effective tools for stabilizing financial markets and, to a degree, supporting economic growth, mainly based on the created wealth effect. From a socioeconomic perspective, however, this form of monetary policy can be viewed as highly unpopular, since, effectively, risk is deferred and wealth is redistributed from savers to debtors. Central banks implementing financial-repression-led policies, directly and indirectly, will hinder free price formation in capital markets, largely as a result of “artificially” lowered interest rates and compressed volatility. Investors will be tempted (or required, as they are today) to seek riskier portfolio choices with the objective to maximize the return of investable capital, likely departing from an allocation of “safe,” interest-bearing assets.

    Personally, I do not think we have seen the end of central bank activism. First, accommodative measures seem to have become a rotating mechanism on a global scale. When the Fed announced the end of QE last week, the Bank of Japan stepped in to announce their increased stimulus, and Europe will likely be next. Second, investors and, to some extent, the general public, have been spared of truly deflationary outcomes. Just as a piece of candy can bring a comforting sugar rush to a tired child, immediate benefits will soon turn sour. For the good of long-term economic and fiscal health, the U.S. economy needs to continue on its upward trajectory. Asset allocators, on the other side, are best positioned to embrace a potentially more volatile investment environment, with stock selection and a global-macro focus as key considerations for portfolio construction.


  • Collective Wisdom – MoneyLife Radio Show

    Wednesday, November 5, 2014

    Posted by: Matthias Paul Kuhlmey

    How should investors view the current economic condition of Europe? This morning, it was a great pleasure to make an appearance on Chuck Jaffe’s MoneyLife Show, along with my partner, Adam Thurgood, to discuss the potential for further accommodative measures by the European Central bank, as well as various risks and opportunities present in Europe. Please click here to listen.

    HighTower was designed specifically not to follow a single viewpoint, or “house view,” in Wall Street jargon. Consequently, as we do not have to sell product, but rather provide advice, our business model allows us to reduce or avoid many conflicts we may have faced earlier in our careers as financial advisors. As partners in our business, we take great pride and responsibility in sharing best practices and ideas to deliver excellence to our clients

  • Rewind

    Friday, October 31, 2014

    Posted By: Avita Sukhram

    Deep into that darkness peering, long I stood there wondering, fearing, Doubting, dreaming dreams no mortal ever dared to dream before; But the silence was unbroken, and the darkness gave no token …-“The Raven”, Edgar Allen Poe

    Usually around this time of year, Edgar Allen Poe’s most popular poem always comes to mind (he was definitely on Boston’s mind).  Generally speaking, Poe’s writing takes us through a journey of the darkest parts of human passion, and that’s when things get weird. 

    This week didn’t shed much light into anything: Ebola extends its reach to Maine, Virgin Galactic crashes during its flight test, the sugar industry tells us some sweet little lies, everyone’s tracking the midterm money, gas falls below $3/gallon (and Goldman has something to say about it!), Andy Rubin moves on, Hungarians say no to internet tax, Gold is having a meltdown, Japan goes to QE-finity while the US says good-bye to the fairy dust, a big clue to Amelia Earheart’s disappearance, the midterm elections carry on (don’t forget to vote on Tuesday!) ,  the Kim Jong-Un mystery finally revealed itself (spoiler alert: not that interesting), Starbucks delivers in 2015, we all get know Brittany Maynard’s heart-wrenching story,  and net neutrality gets a revamp while Apple CEO Tim Cook came out of the proverbial closet (Although this wasn’t a secret to many, kudos to you Mr. Cook!)

    And so to end this 10th month of the year  and only 8 weeks to go and 54 shopping days until Christmas

    Once upon a midnight dreary, while I pondered, weak and weary; Over many a quaint and curious volume of forgotten lore – While I nodded, nearly napping, suddenly there came a tapping, As of someone gently rapping, rapping at my chamber door. ‘Tis some visitor’, I muttered, ‘tapping at my chamber door – only this and nothing more’” Quoth me, “shhhhh, no candy here, turn off the lights and ignore!”

    Love it or hate it… Happy Halloween!  We hope you had a great week and have a great (and safe) weekend ahead! Don’t forget Daylight Savings Time ends this weekend (so don’t be late on Monday)!

    ICYMI (Read: In Case You Missed It!)

    Millennials: Investing for Teens by Teens: FoxonStocks!

    Time’s 2014 Influential Teens

    A Halloween Indicator

    No Halloween Here

    Money and Happiness

    Would you like Fries with your Option Swaps?

    We The Economy

    Midterm Focus

    Best Costume: Ruth Baby (Ginsburg)

    The Devastating History of Midterm Elections

    The dangers of a Taylor Swift high

    HP Sprout

    Cellular Census

    US Candy Trends

    No Last Minute Deals here!

    The Science of Air Travel

    Talent Retention

    The View From Above

    Meet n Greet in France: Corporate Kiss Etiquette

    Evernote “Work Chat” 


  • Stressed Out

    Thursday, October 30, 2014

    Posted by: Matthias Paul Kuhlmey

    As featured on

    A quite picturesque landing at Frankfurt airport on my route from Berlin to New York this past Saturday – the mist of the early morning fog barely revealed the silhouettes of the distant skyscrapers. Part of this ever-dynamic skyline is a massive construction site for the new and elaborate home of the European Central Bank (ECB). The gray sky likely reflected the mood of policymakers that morning, with news surfacing that results of the (still) secret stress test to assess the strength of European banks had been leaked. Fast forward, the (now official) data was not much better than the previously revealed information: 25 major European banks could not meet requirements and face a shortfall of about EUR24 billion ($31 billion) in capital requirements.

    When I think of stress testing, it is a gut-wrenching “all-out” run on a treadmill, pushing myself to new limits and leaving my body begging for a break and a breath; it is difficult, to say the least. The “fitness assessment” for European Banks was not that “stressful,” after all. With the ECB assuming the role of European banking oversight, effective on November 4, 2014, it is clearly better to start off “clean” by providing confidence to the marketplace and, at the same time, not preventing banks from effectively managing operating requirements or lending activities – a more than delicate balance to achieve. It is likely for this reason that regulations governing the stress test have not been fully phased-in, as otherwise 34 of the 130 banks tested would have failed. The lax standard continues to be a concern, since banks that were originally cleared in previous 2010 and 2011 versions of European stress testing failed only months later.

    It may not be a coincidence that the ECB has been anchored deep within Frankfurt, which is home to Germany’s national and global banking sector, as well as the Deutsche Bundesbank, the domestic and historically powerful central bank. Whereas Mr. Mario Draghi, President of the ECB, still embraces an all-encompassing “whatever it takes” approach (the stress test is yet another example), it is here in Frankfurt where German influence, as measured by economic standards and with respect to monetary policy, is centered. It has become public knowledge that Mr. Draghi has not only been clashing with Jens Weidmann, head of the Bundesbank, but also with German Finance Minister, Schäuble. At the end of the day, Draghi may get he wants, given the dire economic conditions in Europe, but each attempt will become increasingly more difficult.

    The new ECB building, a recently estimated EUR1.3 billion construction project, is running far beyond the original schedule and budget, and may be symbolic of the European Union (EU) build itself – a possibly flawed design. The majority of the 28 EU member nations have entered a monetary union (EMU) with the adoption of a single currency. However, a comprehensive fiscal union that allows for the integration of national fiscal treaties under a federal framework was never established. In consequence, European policymakers lack the ability to make decisions about the collection and expenditure of taxes on a European level and, thus, the unified ability to mutually support each nation’s debt. On the surface, EMU member nations are “connected” through the single currency, but continue to remain truly disconnected in many other respects.

    Current conditions in Europe are a harsh reminder of 2011, and may lead the world’s financial system to its very own stress test – not only limited to the European banking sector. Global investors will have to adhere to a high standard with respect to their asset selection, acknowledging that most of Europe continues to suffer from a sovereign debt and/or banking crisis, rather than a lack of good businesses with attractive valuations. On balance, uncertainty and related volatility will remain an integral part of the “European story” until there is political consent and intention to address not only the inherent design flaw of the Union, but also to find ways of dealing with the growing legacy cost within the financial system.