Here’s The Advice Goldman Sachs Is Giving Its Millionaire Clients

After witnessing the S&P 500 surge 30% in 2013, and return 200% since the market trough in March 2009, investors are wondering what they should do next.

ferrari wealthy top hat rich

A man walks from his Ferrari as a carriage passes during the fourth day of the Royal Ascot horse racing festival at Ascot, southern England, June 21, 2013.

Goldman Sachs’ Sharmin Mossavar-Rahmani and Brett Nelson are recommending that the firm’s private wealth clients should “stay fully invested at their strategic allocation to U.S. equities.”

Goldman’s Private Wealth Investment Management division will manage money for folks with at least $10 million.

While this recommendation is the same as recommendations they made in Dec. 2008, Apr. 2012, and Apr. 2013, Goldman says their current view is a more “nuanced” this time because valuations aren’t the tailwind they once were.

“We believe that having a long-term investment horizon is particularly important at this time because it gives our clients a comparative advantage over other investors whose investment horizons are hampered by institutional constraints such as quarterly reporting periods or public finance considerations,” Mossavar-Rahmani and Nelson write.

“In addition, the current monetary policy environment of zero interest rates makes cash and high-quality fixed income assets much less attractive over the next one and five years, which, in turn, increases the attractiveness of equities.”

They point out that the “the penalty of being wrong when underweighting US equities are very high.”

Another factor in this recommendation is that bull markets “do not die of old age.” Instead, they need some shock to trigger a bear market. In the past, these triggers have been tighter monetary policy or an external shock like the dot com bubble or housing bust and there seem to be no signs of any such triggers at the moment.

Of course, there are a few key things that pose a risk to U.S. equity markets: 1. The U.S. economy stalls and goes into recession; 2. The Fed’s exit from quantitative easing is more disruptive than anticipated; 3. The eurozone sovereign debt crisis bubbles over; 4. Confidence in Japan’s three arrows of Abenomics wanes; 5. Emerging market countries see a hard landing; 6. There are geopolitical disruptions through military engagement.

Meanwhile, here are Goldman’s key investment themes for 2014:

  • Underweight investment grade bonds, including intermediate municipal bonds and 10-year Treasuries, because they are expected to have slightly negative total returns for 2014 and modest positive returns over the next five years.
  • Overweight high-yield bonds and bank loans as they are expected to outpeform investment grade bonds and cash in the near term and over next five years.
  • Maintain exposure to hedge funds as they should have mid-single-digit returns and should outperform bonds.
  • Stay fully invested in U.S. equities will have modest single-digit returns of about 3% in 2014 and slightly higher returns over the next five years.
  • Overweight Euro Stoxx 50 because they “will continue to have some of the most attractive near-term and long-term returns.”
  • “US banks will have more subdued returns than last year but will still be quite attractive in absolute terms.”
  • “Emerging market equities are likely to provide higher returns than investment-grade bonds and US equities, but we expect emerging market bonds to lag US high-yield bonds and bank loans.”

Overall, Goldman is more cautious now, and is proceeding with “extra vigilance, knowing that the summit is in sight.”

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American Who Disappeared In Iran Reportedly Worked For CIA

A "proof of life" photo provided to the family of ex-FBI agent Robert Levinson in April 2011.

A “proof of life” photo provided to the family of ex-FBI agent Robert Levinson in April 2011.

The Associated Press reports in an investigative piece that an ex-FBI agent who disappeared in Iran in 2007 and was last seen in a “proof of life” photograph more than two years ago had been working for the CIA, despite official denials from the U.S.

Robert Levinson, who would now be 65, vanished after traveling in March 2007 to the Iranian island of Kish, described by The Associated Press as a resort “awash with tourists, smugglers and organized crime figures.”

He was being paid to gather intelligence on Iran by a team of analysts who had no authority to run spy operations in what amounted to “an extraordinary breach of the most basic CIA rules,” the AP writes.

Since Levinson was in the process of negotiating a new contract with the agency, “After he vanished, CIA officials told Congress in closed hearings as well as the FBI that Levinson did not have a current relationship with the agency and downplayed its ties with him,” a co-author of the AP investigative article, Adam Goldman, wrote in The Washington Post.

For years after his disappearance, the U.S. publicly described Levinson “as a private citizen who traveled to the tiny Persian Gulf island on private business.”

The Two-Way’s Mark Memmott wrote about Levinson two years ago, when his family publicly pleaded for his release.

Within the CIA, the revelation of the rogue operation with Levinson as point man “prompted a major internal investigation that had wide-ranging repercussions at Langley, the officials said, speaking on the condition of anonymity to discuss the sensitive case,” the Post says.

The CIA “ultimately concluded it was responsible for Levinson while he was in Iran and paid $2.5 million to his wife, Christine,” the Post says, quoting unnamed U.S. intelligence officials.

“Levinson’s whereabouts are unknown today. Investigators can’t even say for certain whether he’s still alive. The last proof of life came about three years ago when the Levinson family received a video of him and later pictures of him shackled and dressed in an orange jumpsuit.

” ‘I have been held here for three-and-a-half years,’ he says in the video. ‘I am not in good health.’

“U.S. intelligence officials concede that if he is alive, Levinson, who would now be 65, probably would have told his captors about his work for the CIA as he was likely subjected to harsh interrogation.”

In response to the AP story, National Security Council spokesman Caitlin Hayden released the following statement Thursday evening:

“Without commenting on any purported affiliation between Mr. Levinson and the U.S. government, the White House and others in the U.S. Government strongly urged the AP not to run this story out of concern for Mr. Levinson’s life,” Hayden said. “We regret that the AP would choose to run a story that does nothing to further the cause of bringing him home. The investigation into Mr. Levinson’s disappearance continues, and we all remain committed to finding him and bringing him home safely to his family.”

Four experts explain the impact of Jang Song Thaek’s execution

Experts predict variety of scenarios after very public execution of Kim Jong Un’s uncle

jang-purge

News of Jang Song Thaek’s Thursday execution is a significant development and one that could have far-reaching consequences for Kim Jong Un’s grip on power in the medium to long term. But while official state media will continue stressing the legitimacy of Jang’s execution, the manner in which it was announced is unprecedented and will no doubt send a clear message to anyone thinking of challenging Kim’s leadership in future. How will this affect the future stability of North Korea? Should we expect imminent, high-level defections? Could this be the beginning of the end?

To make sense of the startling developments, NK News spoke to leading experts Dr. Andrei Lankov, Victor Cha, Sunny Lee, and David Straub.

DAVIDSTRAUB

Director, Korean Studies Program, Stanford

This execution underlines the nature of the system: I think lots of people around the world find it hard to imagine that things like this happens in the 21st century, but now they find that they do.

“As someone who has followed North Korea for 30 years it’s highly unusual” 

Nobody knows what this means for stability in North Korea. Everyone has a view, it’s all speculation. It could, for a time, mean more stability, it could mean less stability. We just don’t know, we don’t have enough insight into the leadership dynamics to know. If we did, fewer people would be surprised about this.

VICTOR-CHA

Korea Chair, CSIS

My initial reaction is that it’s less a sign of confidence and more a sign that there is some real competition going on inside the leadership. It’s not clear to me what his leadership is based on now. When you take out the key elements of the party and the key elements of the military you’re kind of building from scratch again. It’s a very risky strategy.

“With Jang Song Thaek gone, there’s nobody else to execute” 

Is the country more stable now that Jang Song Thaek has been executed? Probably not. But again, we don’t know. We don’t know the whereabouts of Kim Kyong Hui, who’s clearly very important to all of this too. If the predominant narrative back in June was that Kim Jong Un is methodically consolidating his power, I think people are less certain of that narrative today. We don’t know what it is but we’re less certain of that narrative today, even though

With Jang Song Thaek gone, there’s nobody else to execute. It’s a sign of the brashness of the regime, the ruthlessness of it. He clearly want to give the impression that nobody should mess with him. In a sense it’s quite unprecedented, we haven’t seen these sorts of theatrical purges since the 1950s when Kim Il Sung was consolidating power, so it’s quite interesting to watch.

ANDREILANKOV1

Professor of Korean Studies, Kookmin University

With what we have seen over the last week, I would say, this news is not that surprising. Actually it was quite likely to happen. But It has bad implications.

“These actions broke a very big part of the North Korean identity: the unity myth”

This might be part of Kim Jong Un’s plan to show that nobody is immune, nobody is safe: if he decides he can kill everybody, nobody will dare say anything. It just might scare them, for they will see the fate of Jang Song Thaek and be terrified, and they will become more obedient. But, a side-effect will be less initiative. Officials will be afraid of doing anything they are not explicitly ordered to do. Such passivity is not good in a country which needs new and imaginative ways to get out of the current crisis.

But it might go absolutely a different direction.

SUNNYLEE

Pantech Fellow at Stanford Walter H. Shorenstein Asia-Pacific Research Center

I think my view is slightly different. The popular view is that this is the beginning of turmoil. But I disagree: I think this is the beginning of stability under Kim Jong Un, consummation of power grip, with him completing the process of establishing himself as the number one single leader, just like his father and grandfather did.

“I think this is the beginning of stability under Kim Jong Un, consummation of power grip” 

Of course, there will now be a massive, bloody purging of Jang Song Thaek’s people. As I understand it there are about 20,000 to 30,000 who received orders from Jang Song Thaek and there will be tremendous bloody purging and executions of these people. That will make it look like there is disarray – and it will look confusing – but it will be an orderly step in Kim Jong Un’s further consolidation of power.

11 Ingenious Solar Projects Impacting the Developing World

Eliodomestico-solar

1. Eliodomestico Solar Still

Industrial designer Gabriele Diamanti created this award-winning solar household still for developing countries with limited or no access to fresh drinking water. It works somewhat like an upside-down coffee maker: You pour seawater through the opening at the top, and the sun heats it during the day. The pressure forces steam through the nozzle leading to a watertight boiler, and condenses against the lid.

The Eliodomestico provides up to 5 liters of water a day, and because the sun does all the work, there are no operating costs. The still is even made entirely of inexpensive, widely available materials.

Luminaid-solar

2. LuminAID Light

Anna Stork and Andrea Sreshta, the founders of LuminAID, created this solar-inflatable light in response to Haiti’s January 2010 earthquake. It’s designed specifically for those affected by disasters, crises and conflicts.

The LuminAID light packs flat — 50 lights take up the same space as eight regular flashlights — and inflates to become a lantern and to reduce the glare of the powerful LED bulbs.

Within the past year, the LuminAID light has been used in humanitarian relief aid in the wake of disasters such as Hurricane Isaac and Hurricane Sandy.

Greenlightplanet-solar

3. Greenlight Planet Sun King

Greenlight Planet’s line of Sun King products marry innovation and sleek design. The Eco, Solo and Pro all come with multi-functional stands, high-performance batteries that last up to five years, and either a real-time LCD or LED screen displaying power feedback. Perhaps most useful is the built-in mobile charging unit, aimed at the most ubiquitous gadget across the developing world.

According to the site, Sun King lamps have helped 25% of users increase their household incomes, allowed for an increase in study time for children, and reduced spending on kerosene and off-site charging stations.

Watch the video of Arftificial Leaf

4. Artificial Leaf

Biochemist Daniel Nocera invented the “artificial leaf,” a silicon wafer that imitates real leaves by creating energy from sunlight and water. When the you put the wafer in water, it splits the hydrogen and oxygen, and collects the hydrogen in a fuel cell.

The problem with early prototypes, however, was that dirty water didn’t work. In April 2013, Nocera announced an updated (“self-healing”) version that prevented bacteria from attaching to its surface.

One artificial leaf placed in a quart of water provides up to 100 watts of energy, 24 hours a day.

Panasonic-lantern-solar

5. Panasonic Solar LED Lantern

Social entrepreneurs and scientists aren’t the only ones working toward lighting developing countries. Tech giant Panasonic revealed its own solar LED lantern in October 2013, which charges by solar panel within six hours and emits 360 degrees of light.

It can also charge USB-capable mobile phones in approximately two hours (depending on phone’s capacity), and shields against dust and water.

The lantern launches first in Kenya, Myanmar, Cambodia, Indonesia, Bangladesh and Malaysia, followed by other countries.

Watch how SunSaluter Makes Smart Solar Power in Developing World

6. SunSaluter

At only 21 years old, Princeton undergrad Eden Full invented this device that rotates solar panels toward the sun throughout the day — without a motor. She discovered that if the panels faced the sun at all times, the energy output increased by 40%.

The innovative thing about the SunSaluter is that it’s an inexpensive, water clock-esque design: Anyone, even people in rural or remote locations, can build it around solar panels.

To learn more about the SunSaluter, watch the video above, which was part ofMashable‘s “Purpose in Progress” series.

Disclosure: Eden Full and the SunSaluter won Mashable and the UN Foundation’s Startups for Social Good Challenge in 2011.

Portable-light-project-solar

7. Portable Light Project

The Portable Light Project enables people in developing countries to create energy-harvesting textiles, which they can adapt to their own needs. For example, locals can weave the flexible photovoltaic cells into bags they carry around during the day, harvesting sunlight, and open it up to light their homes at night.

Developed by Boston-based architecture firm KVA MATx, each kit includes a textile reflector, a photovoltaic material, a battery case with a USB port and an LED light. The battery charges in six hours, providing over 20 hours of light.

The Portable Light Project has launched projects in Nicaragua, Mexico, Venezuela, South Africa, Kenya, Haiti and Brazil, with a specific focus in each region.

Dlight-solar

8. d.light S20

The d.light S20, created to replace kerosene lamps in off-grid households, provides eight hours of 360-degree light on a full battery via high-brightness LEDs. Designed to be user-friendly and, most of all, functional for a wide range of people, a detachable handle allows for different placement options.

The solar panel at the top of the S20 simplifies charging, and the impact-resistant lantern design includes two brightness settings, a battery charge level indicator and a glow-in-the dark power button.

Readyset-light-solar

9. ReadySet Power System

Originally designed for African entrepreneurs, San Francisco-based Fenix International engineered the rugged ReadySet Power System to generate the most power at the lowest cost. It charges in 8-10 hours of direct sunlight, and can power lights, radios and mobile phones.

To give you an idea of how powerful it really is, the ReadySet can charge 10 iPhones, power an iPad for more than 12 hours of continuous video play andrecharge the solar panel in a matter of hours.

Watch SunWater Crowdfunding Campaign

10. SunWater

Led by founder Paul Polak, SunWater aims to improve the lives of 50 million people in developing countries by providing an affordable solar water irrigation system for farmers living in poverty. The pressurized irrigation system brings water to a one-hectare plot, increasing cash crops and, in turn, income.

Diesel pumps — which require fuel and repairs — are often too expensive for rural farmers, and while current solar pumps don’t have the same problems, they can cost upward of $7,000 to install. Using simple, flat-plate mirrors in place of large panels, SunWater will cut current costs by 80%.

Learn more about the project in the video above.

Gravity-light-solar

11. GravityLight

The GravityLight is a slightly different project that the others on this list, as it essentially uses solar as backup rather than a primary energy source. At only $5, the GravityLight works as follows: You fill a ballast bag with rocks, sand or soil, and hang it from the lamp to create energy, lighting the GravityLight for 30 minutes. You can recharge it using a built-in solar panel.

The GravityLight has raised nearly $400,000 on Indiegogo (its target was $55,000). It is currently in trial testing, and will be available in the second quarter of 2014.

Cornell NYC Tech campus to include top architecture and no fences

The new Cornell Tech campus has been designed to foster a dynamic collaboration with academia, business, and the public sector.

The new Cornell Tech campus has been designed to foster a dynamic collaboration with academia, business, and the public sector.

The mayor’s new genius school has a smart new look.

CornellNYCTech, the engineering school planned for the southern end of Roosevelt Island, unveiled a glassy, gateless campus of classrooms, tech incubators and office space to grow New York’s high-tech economy.

The space is currently occupied by a hospital.

The space is currently occupied by a hospital.

The structures include a “net zero” building, designed by Pritzker Prize-winner Morphosis, that will generate as much energy as it consumes; a 24-story Handel Architects-designed dorm that would reach nearly as high as the neighboring Queensboro Bridge; and a Weiss/Manfredi-designed giant staircase that runs through the space to encourage collaboration across the campus.Top architects have been commissioned to make Cornell NYC Tech a true incubator of talent and innovation, officials said.

Top architects have been commissioned to make Cornell NYC Tech a true incubator of talent and innovation, officials said.

“Technology moves so fast, we need a flexible space that can cope with the changing standards of the industry and the academy,” Michael Manfredi said.

The goal is not only to foster high-tech, but also the most basic human needs.The campus would occuppy a large portion of the southern part of Roosevelt Island.

The campus would occuppy a large portion of the southern part of Roosevelt Island.

“There are no gates, no fences, no walls,” said landscape architect James Corner, who also designed the High Line. “This campus will be all about welcoming in the community and the world.”

Thursday morning’s unveiling came hours before the city was poised to officially hand over the land, currently home to a hospital.

The tallest building, a residential dorm for faculty and students, would rise nearly as high as the Queensboro Bridge.

The tallest building, a residential dorm for faculty and students, would rise nearly as high as the Queensboro Bridge.

There are no fences or gates on campus, officials said.

There are no fences or gates on campus, officials said.

Bureau A entertains wine drinkers at la cabuche in swiss vineyards

bureau A entertains wine drinkers at la cabuche in swiss vineyards

situated in the genevan vineyards in switzerland, ‘la cabuche’ by swiss studio bureau A is an accommodating stone building for wine-drinking aficionados. accessed only by foot,

the humble structure emerges from the landscape to welcome people into a secret community reunion, away from the city. a blue fluorescent sign over

bureau-a-la-cabuche-designboom02

the entrance hints at the fact something unusual waits inside. an oval white light fills the interior, illuminating the space and the guest’s faces against contrasting purple seating.

8 Amazingly Creative Examples of Environmental Art


Lives of Grass by Mathilde Roussel
Soil, wheat seeds, recycled metal and fabric
Brooklyn, New York, 2010


Sandworm by Marco Casagrande
Willow and sand
Wenduine, Belgium, 2012


Equilibri by Michael Grab
Balanced stones
Cattolica, Italy, 2012


Lonely Tree, Lonely People, The Tree Hugger Project by Agnieszka Gradzik and Wiktor Szostalo
Twigs, branches, vines and other natural materials
Poznan, Poland, 2008


Organic Highway by Mikael Hansen
Sycamore poles
Langeland, Denmark, 1995


Art-Eggcident by Henk Hofstra
Spray paint and synthetic materials
Wilhelmina Square, Leeuwarden, Netherlands, 2008

CDSea by Bruce Munro
Compact discs and limestone
Near Kilmington, England, 2010


Snow Drawings by Sonja Hinrichsen
Snowshoe prints
Rabbit Ears Pass, Colorado, 2012

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