5 Questions with Merrill Lynch's Todd Taylor
BY JOHN STANCAVAGE World Business Editor
Friday, December 07, 2012
12/07/12 at 4:47 AM
Todd Taylor joined Merrill Lynch as a financial adviser in 1990. He will become the firm's first private wealth adviser in Oklahoma, joining its Private Banking and Investment Group. Taylor began his financial services career in 1985 with E.F. Hutton & Co.
1: How has the investment business
changed in the past two decades?
On the broad scale, and in my
opinion, the year 1987 changed
investors’ perspectives on how they
should structure their portfolios.
In the early 1980s, before the stock
market crash of 1987, the major
markets had done well and no one
had seen them move between 10
percent and 20 percent over a mere
few days. Since that event, the financial
industry has moved toward
a planning-based marketplace in
order to minimize investors’ risk.
In Oklahoma, the growth in the
energy sector and the increase
in mergers and acquisitions and
private equity transactions is driving
today’s economy. As such, the
abundance of energy, manufacturing
construction and infrastructure
assets in the marketplace has
demanded we serve the financial
needs and preferences of ultrahigh-
net-worth — clients with
investable assets in excess of $10
million — individuals and families.
2: The stock market has been volatile in
recent years. For sophisticated investors,
how much of their portfolio do
you believe should be in stocks right now?
While stock market volatility is
seemingly here to stay, we work
with our clients to help them take
advantage of the changing investment
landscape and the opportunities
ahead. We encourage our
clients to accept that volatility may
exist and that it does not have to
be the enemy of their portfolios
but rather can uncover opportunities
and allow them to upgrade the
quality, growth and yield of their
3: What can lower-income individuals
learn from studying what high-networth
investors, such as Warren
Buffett, do with their money?
Warren Buffet once said, “We
simply attempt to be fearful when
others are greedy and to be greedy
only when others are fearful.
This adage, which is also one of
my favorite quotes, is a fairly basic
concept that describes investor
behavior. However, many investors
often times do the exact opposite
and invest in the wrong thing at
the wrong time because they let
emotion drive their investment
This is something for investors at
all asset levels to keep in mind.
4: What steps can family-owned
businesses take to ensure a smooth
transfer to the next generation?
Most family business owners
have their hands full planning for
the next quarter and don’t think
about what will happen to the company
years — or decades — from
now. Further, the questions a family
business owner has to ask him or
herself when approaching a succession
plan — for example, which, if
any, of their children will carry on
the business or how will children
outside the business be compensated
— can be difficult.
Succession planning is the key
element to ensuring continuity in a
family business, and a written plan
should be in place and reviewed
on annual basis. Business owners
should consider involving a business
attorney or an attorney with
a background in corporate structures
and tax planning early in the
5: What are the best investment lessons
or strategies you’ve learned over the
The most important thing for
investors to understand is that
markets are not static. They evolve.
I think there has been an idea that
you can own a stock in a great
company or a small handful of great
companies and eventually your
portfolio will excel.
I don’t think that idea is valid
anymore based on the everchanging
market landscape. The
recession in 2008 and 2009 moved
markets to extreme valuations.
Most investors can’t afford these
types of valuation losses, even by
owning a stock in some of the bestknown,
Investors need to learn to adapt
or diversify portfolios in order to
protect against these market losses
In addition, investors need to
realize that asset management is
about personal goals, not about
beating the markets.
STEPHEN PINGRY/Tulsa World