Morningstar Advisor - Winter 2008 - 15

Advisor Profile The Golden Touch By Jerry Kerns Janet Briaud sticks with her investing ideas through thick or thin, and she’s usually right. Janet Briaud knows firsthand about what value managers call the “redemption period,” when being on the wrong side of the growth-stock rally meant restless nights and fleeing clients. It was early 1999, and the financial planner— worried about sky-high P/Es and the Y2K computer bug—trimmed her clients’ stock allocation to 25% and put the proceeds toward commodities and TIPs. She put some clients in a fixed account that guaranteed an 8% return. She even bought REITs, which had fallen off a cliff. For a year, it looked as if Briaud had made a decision that ends a lot of careers. The Nasdaq returned 86% that calendar year and the S&P 500 rose 21%. She didn’t lose a ton of clients (eight left her practice of 200), but each departure was a “stab in the stomach,” she says. Still, she persevered, because intellectually she knew she was making the right moves. But it took a dream to lift the emotional burden of going against the tide. “I dreamt that we had lost our house, and my two children and my husband and I were leaving, hand in hand,” she says. “And I felt okay. The dream was very powerful for me because I realized that I was able to finally say: ‘I can lose it all—because I’m doing what I’m doing for the right reasons.’ “ A year later, with stock markets tanking, Briaud’s moves looked brilliant—which wasn’t lost on her clients. “I remember,” she says “clients coming back to me saying, ‘We wondered what you were smoking. But you had always done a good job for us before, so we just went along with you.’ “ Clients Who Let Her Do Her Job early, when the crowd is running the other way. She stays ahead of the masses by hitting the books and analyzing market data that go back a century. She’s a passionate researcher and believes history is a great teacher of the present. She’s fond of saying that there is no free lunch in the markets. From her research, she wants to be able to identify major turning points in the markets and be in position to take advantage of them before everyone else does. To do this, she creates stories (Y2K and a jittery, overvalued market don’t mix)—out of which themes emerge (we’re in for a long bear market). “I’m interested in what can go wrong and how can I protect my clients from that,” she says. “Or what could go right, and how do I make money from that.” A Turn to Gold This type of go-along response from clients is typical for Briaud. She frets more about their money than they do. She started Briaud Financial Planning in Bryan, Texas, in the 1980s after moving from Canada (her accent is still more Canadian than Texan). Briaud and a staff of 10 serve 220 clients with $450 million in assets under management. Most of her clients are professors at nearby Texas A&M. (The rest are doctors and business owners.) Her professor clients tend to work in scientific fields, and they value their intellectual capital more than their financial capital, but they have no shortage of the latter. The typical client comes to Briaud in his 50s with $1 million to $2 million socked away in generous 403(b) and 457 plans. With clients so close to retirement, protecting capital is Briaud’s number-one investing priority. But she says she wants to be “conservative with impactful results,” meaning that she likes asset classes that have the downside already beaten out of them but have the potential to rebound. For this to happen, she’s got to get in One area that’s going right is commodities. She says we’re in the midst of long-term bull market for commodities, a thesis she began developing earlier this decade after reading Marc Faber’s book Tomorrow’s Gold, which helped convince her that an emerging middle class in developing nations would fuel the demand for commodities. One beneficiary would be gold, she figured, and in 2003 she moved 10% of her clients’ money into the precious metal, mostly through Fidelity Select Gold Fund FSAGX. (Her clients in 403(b)s are restricted to Fidelity and TIAA-CREF funds.) For clients not restricted by MorningstarAdvisor.com 15
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Morningstar Advisor - Winter 2008

Table of Contents for the Digital Edition of Morningstar Advisor - Winter 2008

Morningstar Advisor - Winter 2008
Contents
Letter from the Editor
Inbox
How Do You Use the Morningstar Style Box?
Real Estate Investing Goes Global
The Golden Touch
Investment Briefs
Learning to Fly with Equity Options
Another Block in Building a Portfolio
In a League of Their Own
Unlock the Box
Fashion Change
The View from the Investment Side
Unpredictable Style
Weighting the Fundamentals
Wire-to-Wire Consistency
The Secret's Out
Focus on Financials
Strongest Homebuilders Will Withstand the Wrecking Ball
Breaking Style Conventions
Playing It Safe with Financials
Back to Bond School
Mutual Fund Analyst Picks
Undervalued Stocks
Most Popular Variable Annuities
New at Morningstar
The Style Counsel
Morningstar Advisor - Winter 2008 - Intro
Morningstar Advisor - Winter 2008 - Morningstar Advisor - Winter 2008
Morningstar Advisor - Winter 2008 - Cover2
Morningstar Advisor - Winter 2008 - 1
Morningstar Advisor - Winter 2008 - 2
Morningstar Advisor - Winter 2008 - Contents
Morningstar Advisor - Winter 2008 - 4
Morningstar Advisor - Winter 2008 - 5
Morningstar Advisor - Winter 2008 - 6
Morningstar Advisor - Winter 2008 - Letter from the Editor
Morningstar Advisor - Winter 2008 - 8
Morningstar Advisor - Winter 2008 - Inbox
Morningstar Advisor - Winter 2008 - How Do You Use the Morningstar Style Box?
Morningstar Advisor - Winter 2008 - 11
Morningstar Advisor - Winter 2008 - Real Estate Investing Goes Global
Morningstar Advisor - Winter 2008 - 13
Morningstar Advisor - Winter 2008 - 14
Morningstar Advisor - Winter 2008 - The Golden Touch
Morningstar Advisor - Winter 2008 - 16
Morningstar Advisor - Winter 2008 - 17
Morningstar Advisor - Winter 2008 - Investment Briefs
Morningstar Advisor - Winter 2008 - 19
Morningstar Advisor - Winter 2008 - 20
Morningstar Advisor - Winter 2008 - 21
Morningstar Advisor - Winter 2008 - Learning to Fly with Equity Options
Morningstar Advisor - Winter 2008 - 23
Morningstar Advisor - Winter 2008 - 24
Morningstar Advisor - Winter 2008 - 25
Morningstar Advisor - Winter 2008 - Another Block in Building a Portfolio
Morningstar Advisor - Winter 2008 - 27
Morningstar Advisor - Winter 2008 - 28
Morningstar Advisor - Winter 2008 - 29
Morningstar Advisor - Winter 2008 - In a League of Their Own
Morningstar Advisor - Winter 2008 - 31
Morningstar Advisor - Winter 2008 - 32
Morningstar Advisor - Winter 2008 - 33
Morningstar Advisor - Winter 2008 - 34
Morningstar Advisor - Winter 2008 - 35
Morningstar Advisor - Winter 2008 - Unlock the Box
Morningstar Advisor - Winter 2008 - 37
Morningstar Advisor - Winter 2008 - 38
Morningstar Advisor - Winter 2008 - 39
Morningstar Advisor - Winter 2008 - Fashion Change
Morningstar Advisor - Winter 2008 - 41
Morningstar Advisor - Winter 2008 - 42
Morningstar Advisor - Winter 2008 - 43
Morningstar Advisor - Winter 2008 - The View from the Investment Side
Morningstar Advisor - Winter 2008 - 45
Morningstar Advisor - Winter 2008 - 46
Morningstar Advisor - Winter 2008 - 47
Morningstar Advisor - Winter 2008 - 48
Morningstar Advisor - Winter 2008 - 49
Morningstar Advisor - Winter 2008 - 50
Morningstar Advisor - Winter 2008 - 51
Morningstar Advisor - Winter 2008 - Unpredictable Style
Morningstar Advisor - Winter 2008 - 53
Morningstar Advisor - Winter 2008 - Weighting the Fundamentals
Morningstar Advisor - Winter 2008 - 55
Morningstar Advisor - Winter 2008 - 56
Morningstar Advisor - Winter 2008 - 57
Morningstar Advisor - Winter 2008 - 58
Morningstar Advisor - Winter 2008 - 59
Morningstar Advisor - Winter 2008 - 60
Morningstar Advisor - Winter 2008 - 61
Morningstar Advisor - Winter 2008 - Wire-to-Wire Consistency
Morningstar Advisor - Winter 2008 - 63
Morningstar Advisor - Winter 2008 - 64
Morningstar Advisor - Winter 2008 - 65
Morningstar Advisor - Winter 2008 - The Secret's Out
Morningstar Advisor - Winter 2008 - 67
Morningstar Advisor - Winter 2008 - 68
Morningstar Advisor - Winter 2008 - 69
Morningstar Advisor - Winter 2008 - Focus on Financials
Morningstar Advisor - Winter 2008 - 71
Morningstar Advisor - Winter 2008 - 72
Morningstar Advisor - Winter 2008 - 73
Morningstar Advisor - Winter 2008 - Strongest Homebuilders Will Withstand the Wrecking Ball
Morningstar Advisor - Winter 2008 - 75
Morningstar Advisor - Winter 2008 - Breaking Style Conventions
Morningstar Advisor - Winter 2008 - 77
Morningstar Advisor - Winter 2008 - Playing It Safe with Financials
Morningstar Advisor - Winter 2008 - 79
Morningstar Advisor - Winter 2008 - 80
Morningstar Advisor - Winter 2008 - Back to Bond School
Morningstar Advisor - Winter 2008 - 82
Morningstar Advisor - Winter 2008 - Mutual Fund Analyst Picks
Morningstar Advisor - Winter 2008 - 84
Morningstar Advisor - Winter 2008 - 85
Morningstar Advisor - Winter 2008 - 86
Morningstar Advisor - Winter 2008 - 87
Morningstar Advisor - Winter 2008 - Undervalued Stocks
Morningstar Advisor - Winter 2008 - 89
Morningstar Advisor - Winter 2008 - 90
Morningstar Advisor - Winter 2008 - 91
Morningstar Advisor - Winter 2008 - Most Popular Variable Annuities
Morningstar Advisor - Winter 2008 - 93
Morningstar Advisor - Winter 2008 - New at Morningstar
Morningstar Advisor - Winter 2008 - 95
Morningstar Advisor - Winter 2008 - The Style Counsel
Morningstar Advisor - Winter 2008 - Cover3
Morningstar Advisor - Winter 2008 - Cover4
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