Keep one step ahead, says exec

The economy contains some upcoming pitfalls for investors, said James Rothenberg, chairman and principal of Capital Research and Management Company. Mr. Rothenberg spoke to attendees at the Morningstar Inc. conference today in Chicago. He believes that market returns going forward could be less robust, but points out those savvy investors can succeed by looking for new trends. “The surest way to lose money is looking in the rear view mirror,” he said. Groups such as Harvard University and Yale University that bought alternative funds such as hedge funds 10 years ago have seen significant benefits, but the groups who are grabbing hedge funds and other alternatives right now may be disappointed, he said. Perhaps the most significant challenge in the financial services industry will be the retirement of baby boomers, and advisers need to be prepared for this shift, said Mr. Rothenberg. Capital Research is still working on crafting new alternatives for such boomers and is looking at new strategies but the transition needs to occur slowly, he said to an audience of mostly financial advisers.