“I think the rally has more to do with the macro picture and the easing of the macro scenario,” said Gary Flam, portfolio manager of Bel Air Investment Advisors in Los Angeles. “That’s driving the rally more than earnings. You are seeing a significant amount of companies miss earnings. Or hitting earnings but missing on revenue. Earnings season in total has not been a driver behind this rally.”

“The story for the emerging markets is clearly they decelerated, but you have governments that are easing policies,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles.

“They spent 2011 fighting inflation and tightening, and now they’re embarking on central-bank easing and that’s seen as providing a boost to those economies and those underlying markets,” he adds. “Domestic investors who are in large multinational companies have to know what’s going on.”

People who have a broker may be able to ask for shares and the allocation may be determined by how much business they did at that investment banking or brokerage firm, said Todd Morgan, senior managing director at Los Angeles-based Bel Air Investment Advisors, which manages about $6 billion. Investors trying to obtain shares now may not gain access to a large enough allocation to have an impact on their portfolios, he said.

“It’s very difficult to figure out where you stand, which is a difficult place to be for a bondholder,” Craig Brothers, a managing director at Bel Air Investment Advisors in Los Angeles, said in a telephone interview. “The market’s become very illiquid with this kind of credit. You don’t really know where you stand in the capital structure.”

Darell Krasnoff offers advice on where high net worth investors are finding reliable yields in an uncertain economy.

Todd Morgan discusses whether the S&P 500 has risen too high, too quickly.

“I think people are starting to express some hope about the U.S. economy, but 2012 is still a year marked with a lot of uncertainty,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “You’ve got the U.S. economy right now decoupling not only from Europe but Asia and the emerging economies. The question is how long that can be sustained. Something’s got to give.”

The absence of a budget impasse would help stoke investor demand for California’s bonds, which is already strengthening thanks to renewed interest in muni debt in general, said Craig Brothers, a strategist at Bel Air Investment Advisors in Los Angeles.

“If people want to put money to work, I think they feel most comfortable in the bigger, most liquid names” such as California, Brothers said.

“There’s no doubt that there’s a fear trade — a lot of nervous money both abroad and domestic seeking to be in liquid, safe investments,” said Kenneth Naehu, managing director and portfolio manager of fixed income at Bel Air Investment Advisors LLC, which manages $7 billion for clients.

“There are going to be multiple points where … the market is going to overreact if it thinks inflation is heating up, or a country in Europe is failing,” Mr. Naehu said.

“Our mantra is to be ready for extreme volatility and be ready to take advantage of it,” he said.

“I cannot explain today’s action in the market,” said Gary M. Flam, an equity portfolio manager at Bel Air Investment Advisors. “There has been no news, either positive or negative, to drive a move of this magnitude. I could try to explain it away, but a move of this magnitude is head-scratching.”

“The market just seems to have no memory from one day to the next,” Mr. Flam said. “To drive a move of this magnitude, you would expect there to be some sort of resolution on the bigger-picture issues.”

BEL AIR INVESTMENT ADVISORS LLC: On 06/30/2011, held 0 shares. On 09/30/2011, held 618,786 shares, worth $19,473,195.

The incentive companies have to invest overseas underscores the need for a U.S. tax-code overhaul that would lower corporate rates, said Gary Flam, who helps manage $6.5 billion for Bel Air Investment Advisors LLC in Los Angeles. Investors cheer lower cash taxes, he said.

“It means there’s more cash flow for investors,” Flam said. “As shareholders, from a capitalistic standpoint, you want your companies to maximize cash flow because that’s how you maximize value.”

“The question has to be, over a long-term cycle, has the strategy provided value,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “You can’t drive looking in the rearview mirror. From an investor aspect, what do I expect the next couple of years to hold, and given that outlook, how do I expect to outperform?”

The teetering economy has brought a new investing dynamic to the market, Flam says.
Whereas a few years ago the primary criteria was finding companies that had strong balance sheets, the focus has turned to those with stronger earnings growth potential. Many managers have been slow to adapt.

Banks, then, became less attractive despite having more than $1.5 trillion rolling around their balance sheets, while consumer staples, energy, industrials and health care became more attractive.

“Understand that six months ago everybody thought the economy was growing and we were on this sustainable path. You wanted companies that were exposed to continued economic growth,” Flam says. “The last four months have laid bare that if you’re positioned in companies with exposure to continued economic growth and that economic growth is put into question, your portfolio is going to suffer.”

Like Lamkin, Flam expects that his clients will see the long-term value in their investment strategies and stay the course with active management.

However, should 2012 bring another rough year, that could become a tougher sell.

Bond investors would benefit, said Craig Brothers, managing director of Bel Air Investment Advisors LLC in Los Angeles.

“We find it very difficult to get to the bottom of the liabilities on municipal credits,” said Brothers, whose firm oversees a $3.1 billion bond portfolio, about 75 percent of it in municipals. “We as investors would welcome anything that makes it more transparent.”

Craig Brothers, portfolio manager at Bel Air Investment Advisors, called the U.S.’s supercommittee event a potential “wildcard” in the coming week, but one that would likely have more impact on the equity market than Treasurys. Chatter about the upcoming deadline isn’t garnering nearly as much attention as the debt-ceiling debacle in late July, but growing uncertainty as the cut-off date nears usually means more demand for Treasurys.

“Fear is a stronger emotion than greed,” said Todd Morgan, senior managing director at Bel Air Investment Advisors in Los Angeles, which advises about $6 billion in assets for high-net-worth investors.

Morgan has changed his call since August, when he told clients, “It’s too late to sell and too early to buy.” Now, he said, “the stock market is worse than the economy, and stocks…are very, very cheap.” But he added, “people are frightened.”

Morgan moved his high-net-worth clients heavily into bonds just before the market collapse in 2008 and they never came out, he said. “Our clients went into a bunker, then the storm hit and after the storm people didn’t want to get back in,” he said. He’s just now starting to convert small amounts of bonds into equities, but said, “People have a muscle memory of 2008 and early 2009; it’s hard to get them to put more money into equities.”

Some investors are losing patience with the market’s volatility, he said. “I’m trying to encourage people to stay the course,” said Morgan. “When it’s time to go up, markets go up 2%, 3%, 4% a day for a week, and there’s no time to get in. By the time you say, “I feel comfortable now, everything’s OK,” the market’s up 10%, 15%.”

“Do we have any more certainty now than we did when the market sold off on Wednesday? I don’t know,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “The one thing I have the most conviction in is this uncertainty and this volatility is likely to stay with us for quite a while. There are no easy solutions.”

While the volatility makes for many gut-churning moments, getting out of the market now would be a mistake, says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles.

True investors, he says, actually should be thinking about how they`ll be positioned once Greece gets past the turmoil of its debt and political issues, which most recently have come through the waffling of President George Papandreou about whether the nation will accept bailout conditions.

“You have to be an investor and not a trader,” Flam says. “When I say `investor,` you have to be looking to invest in good companies you think can do well over the next several years and aren`t depending on the next Greek vote.”

Valuation is often trumpeted as a reason to buy stocks in the current environment, with the SandP 500 trading at a 14.5 price-to-earnings ratio. For Flam, the current era is reminiscent of the 1977 to 1982 market run that saw three bear market sell-offs and one near-bear – but which was followed by a massive bull move.

“On every sell-off they should be building up their equity exposure, because at some point over the next couple of years that next secular bull market is going to begin,” he says. “No bell is going to go off to signal it, but you want to be exposed to equities by then.”

LOS ANGELES – (November 07, 2011) – Bel Air Investment Advisors, LLC (Bel Air), a leading independent wealth management advisory firm to high net worth individuals, families, trusts and foundations, announced today the addition of Mark Tunney as senior vice president to its trusted and highly regarded team of professionals. Mark will provide investment advisory services to clients.

“I think there is a crisis of confidence in the investment world.”

“That will create more jobs by pushing Congress to come up with more ideas and ways to incentivize business people. And not all businesses are good enough that they can hire more people. My guess is most can’t do both. Most people can do the first, it’s easy to stop giving a political donation.”

“Well, as I said if you make a commitment that you’re not going to give any money until some resolution happens in Washington, and in addition, we are trying to add five percent more jobs at Bel Air Investment Advisors, From the last couple of months going til the end of the year, we are looking to do it. We can only help by hiring a few more people. But there is a lot of leverage in what they decide in Washington.”

“It can’t be the only solution. It’s an incentive, if enough people join to get Washington to come up with solutions and answers, for the two areas I just mentioned — both jobs and reducing the deficit.”

“The sharp moves show a lack of conviction by investors,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “For most investors, our backgrounds are in evaluating companies, industries [and] economies. It’s not about evaluating politics. Yet that’s the position we find ourselves in today.”

“The amount of money it takes for even wealthy investors to feel comfortable with risk is staggering.” Todd M. Morgan, senior managing director at Bel Air Investment Advisors, which manages money for high net-worth investors including Hollywood celebrities, said he had clients who were worth $25 million to $30 million and remained entirely in bonds.

“Those who are worth more than $100 million are comfortable taking some risk but rarely with more than 20 percent of their assets — and many of them define risky as being in blue-chip stocks.”

“In a perfect world you should be selling some bonds and buying some high-quality stocks,” Mr. Morgan said. “But the stock market is the only place in the world where if there’s a big sale no one comes out and buys.”

“European leaders finally appear to recognize the risks of inaction,” said Timothy McCandless, senior equity analyst at Bel Air Investment Advisors. “I do worry about for when the market shifts from wanting improved rhetoric out of Europe, toward wanting to see specific action.”

“At the end of the day we don’t have a resolution in Europe and we’re no closer to one than we were two months ago,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “We’re in the middle of the trading rage. Investors are just waiting for the green light or the red light.”

“Existing earnings estimates may not provide much use to investors,” said Gary Flam, who helps manage $6.5 billion for Bel Air Investment Advisors LLC in Los Angeles. “Expectations for S&P 500 profit growth had been ratcheted down from 16 percent at the end of July, making it easier for companies to meet or beat estimates even as demand cools,” Flam said.

“More than looking at this past quarters’ earnings, investors want companies to give them a peek into the future,” Flam said.

“In a time of heightened uncertainty, people are trying to get some clarity and conviction and that’s going to come from what management is saying about the outlook,” Flam said. “It’s not necessarily what you did in the third quarter. It’s what does the future hold.”

“We’re used to evaluating companies, economies, industries. Now we’re being forced to evaluate politics,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “That’s a very uneasy proposition for most investors because it’s not what our background is.

“It makes it very difficult if you want to try to trade this market,” Flam says. “But investing is difficult also just because of the range of outcomes. The tail risk seems to grow, making you have to constantly re-evaluate your potential outcomes.”

Todd Morgan discusses his favorite value plays in the market.

“Europe is a scary place right now, and until we see a solid plan that will change investor perception, we have to get used to the 10-year yield hanging below 2%,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

But the trend of falling Treasury yields won’t last forever, despite the moves over the last three decades, said Bel Air Investment Advisors’ Naehu.

“Eventually, the government and Fed will set out on a quest to increase inflation, and once they’re successful, we’ll see rates move substantially higher,” he said.

That’s been Pimco (PTTRX) CEO Bill Gross’ argument since the start of the year, and Naehu said that eventually, his bet will be right. Knowing when to make it, however, is the hard part.

“The biggest impact on the market is politicians and what they’re going to do to help, and that makes me very uncomfortable,” said Darell Krasnoff, managing director at Los Angeles-based Bel Air Investment Advisors, which manages about $6 billion in assets. Mr. Krasnoff said the Fed still has power to boost asset prices by juicing the economy with more liquidity. But he worries options such as buying longer-dated securities would have only a limited impact on the economy.

“If what he outlines is underwhelming, you could get a selloff,” Gary Flam, portfolio manager at Los Angeles-based Bel Air Investment Advisors. “The risk is to the downside. There’s more of a chance that he disappoints than provides a coherent strategy for how the Fed can manage the weak economy.”

Todd Morgan, senior managing partner of Bel Air Investment Advisors in Los Angeles, says many of his clients had moved assets to cash and bonds ahead of the recent downturn. That allowed them to redeployed into high-dividend stocks at discounted prices last week.

Investors could do well, he said, with blue chips like Procter & Gamble (PG.N) and Johnson & Johnson (JNJ.N) shares, each of which yields more than Treasury bonds.

“What would you rather own for the next 10 years?,” asks Morgan, whose firm oversees $6.5 billion.

If the state sold the notes today, the yield would probably be in the 0.5 percent range, says Ken Naehu, a managing director with Bel Air Investment Advisors. As an investor, he hopes they will be higher and would be an eager buyer if they were closer to 1 percent.

“The metrics are very attractive now for the state to issue bonds. There is a lot of demand and very little supply,” Naehu says. Given the unsettled nature of the markets, that could change at any time.

“I don’t know if a municipal (debt issuer) is going to get a much more attractive entry point than they have right here,” Naehu says.

Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles, said the current environment reminds him of the late 1970s and early ’80s when investors were being chased from the market.

“In every selloff investors are selling equities, then they buy into rallies but not as much as they sold,” he said. “You’re getting a period where you’re gradually whittling away at equity exposure and it’s all setting up for the next secular bull market.”

Flam said he thinks unexpected good news out of the US or European economies will help turn sentiment and get investors back into the market once the current correction runs its course.

“These are two well-respected CEOs and they’re on to something,” said Todd Morgan, founder and senior managing director of Bel Air Investment Advisors in Los Angeles, whose firm manages money for families with $20 million or more.

“I think you will get other business leaders following their lead to encourage Washington to take some bold steps, which could inspire more confidence in the economy of our country,” Morgan said.

“Traders and investors are at a point of absolute exhaustion. The back and forth action is draining,” said Gary Flam, portfolio manager at Los Angeles-based Bel Air Investment Advisors. “Investors are just waiting now to see what the market has in store for next week.”

“It’s not a positive because you’re addressing the symptoms of the problem, not the underlying cause of the illness,” said Gary Flam, portfolio manager at Bel Air Investment Advisors.

“The big question is ‘Are we heading into a new recession, or is growth just slower than a lot of people thought?’ We’re of the opinion that growth is just slower. Given that we don’t see a recession, the market is providing great opportunities to buy some great franchises. If you step back, you can use other people’s fears to your advantage. Think of blue chips with good balance sheets: Disney, Microsoft, Apple, Schlumberger. I think a 15% to 20% rally in the S&P 500 before year-end is a distinct possibility.”

Todd Morgan of Bel Air Investment Advisors recommends Starbucks (SBUX), Apple (AAPL), and Proctor & Gamble (PG).

Clients have been calling and asking whether they should be selling and putting all of their money in the bond market, according to Todd Morgan, senior managing director at Los Angeles-based Bel Air Investment Advisors, which oversees about $6 billion.

“My answer to that is no,” they should be looking to add more world-class multinational equities, like Starbucks Corp. (SBUX) and Apple Inc. (AAPL), Morgan said.

If the S&P 500 reaches 1,125 or 1,150, Morgan will take cash and buy more of those stocks, as well as those that pay dividends such as Procter & Gamble Co. (PG), the world’s largest consumer-products company, he said.

“Treasuries are piercing or near piercing key resistance levels and that says interest rates are going lower. That’s dictating what’s going on in munis,” said Managing Director Kenneth Naehu of Bel Air Investment Advisors in Los Angeles.

“Clearly what’s going on in D.C. is affecting the overall economy,” said Gary Flam, portfolio manager at Los Angeles-based Bel Air Investment Advisors. “The longer [the debt debates] go on, the more headwinds we face. The bulls’ argument was [that] you’ll have an acceleration in the economy in the second half. That’s being called in to question now.”

“The reason Treasury yields have stayed so low is that you have these [eurozone] fears,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors LLC, which manages $6.5 billion for clients.

“I don’t think the rationale [for higher rates] has been wrong,” Mr. Naehu said. U.S. debt pressures eventually will force rates higher, he said.

“There still isn’t a lot of conviction among investors in the market,” said Gary Flam, portfolio manager at Los Angeles-based Bel Air Investment Advisors. “Without that conviction, the market is very susceptible to that next macro-driven headline.”

But the recent stalemate in Washington has drawn that into question. “If you’re buying bonds, you’re going to think twice about whether you’ll get your interest payment and get it on a timely basis,” said Gary Flam, a portfolio manager at Los Angeles-based Bel Air Investment Advisors.

“JPMorgan is the first of the large financials to report earnings,” said Gary Flam, who helps oversee $6.5 billion at Bel Air Investment Advisors. “That seems to be getting people in a positive mood. We’re early in earnings season, but we seem to be off to a good start.”

“The size of Italy’s economy makes sovereign credit issues there a much greater concern,” said Gary Flam, who helps oversee $6.5 billion at Bel Air Investment Advisors. “Greece, Portugal and Ireland are manageable given the small size of those economies relative to the EU. Once you cross the threshold into Spain and Italy, you’re taking a big step up. That’s a major negative.”

“The state’s economy does seem to show some signs of life and I think the deficit that was projected six months ago ended up being a little smaller than most of us anticipated,” said Kenneth Naehu, a managing director at Bel Air Investment Advisors, a California firm that oversees $6 billion in assets.

“We went through a multi-month period of disappointing data, and now it is coming in better than anticipated,
and that reset of expectations is providing a nice tailwind to markets,”said Gary Flam,
portfolio manager at Bel Air Investment Advisors in Los Angeles.

“We expect the economy to reaccelerate and therefore we want to be positively exposed,” said Gary Flam, a fund manager for Bel Air Investment Advisors LLC in Los Angeles, which oversees $6.5 billion. “Cyclicals are the way to do that. They’re bargains now.”

Bel Air’s Flam said he anticipates economically sensitive stocks to regain leadership. He favors industrial and energy shares over companies reliant on spending by individuals.

“The auctions were miserable,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

Naehu said demand should remain weak.

“At some point in the near future, there’s going to need to be some risk built bonds,” he said. “Foreign buyers are going to realize that 3% on a 10-year and 4% to 4.5% on a 30-year bond is not attractive from a government that’s inviting inflation.”

“People are getting more confident that the economy isn’t going to slide lower, and the Greek headlines are removing some near-term concerns,” said Gary Flam, a portfolio manager at Los Angeles-based Bel Air Investment Advisors.

“The heads of Europe, the ECB [European Central Bank] understand the magnitude of what is going on, and people smarter than me are going to figure out how to work it out. We’re placing our bets on what we think will happen, a solution short of calamity,” said Gary Flam, managing director and portfolio manager at Bel Air Investment Advisors. “The heads of Europe, the ECB [European Central Bank] understand the magnitude of what is going on, and people smarter than me are going to figure out how to work it out. We’re placing our bets on what we think will happen, a solution short of calamity,” said Gary Flam, managing director and portfolio manager at Bel Air Investment Advisors.

“Companies to date really have not seen dramatic slowdowns or anything worse than their expectations for the most part,” said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “To me this is Groundhog Day. It’s very similar to what happened last summer. We’ll have the same result as last year.”

“As I look out over the horizon there are a lot of potential positive catalysts to get the economy and market going in the right direction,” Flam said.

“The market is clearly hoping that Bernanke indicates more support for the marketplace,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

While another full fledge round of quantitative easing might be a politically difficult proposition at the moment, Naehu said investors are expecting some sort of simulative move by the Fed.

Naehu said investors will be keeping a close watch on Greece, primarily due to fears the crisis will spread to more stable eurozone countries.

Ken Naehu, a portfolio manager at Bel Air Investment Advisors in Los Angeles, said he would expect the deal to get a great reception from the market. He said the Broad bonds appear similar to the highly rated J. Paul Getty Trust bonds that are backed by an endowment and at times trade like pre-refunded bonds or better.

“In this type of marketplace where a lot of investors are putting yield aside for safety or security, those are the types of bonds that are sought after,” according to Naehu.

“Investors are asking if this is just a slowdown or the start of the next recession,” said Gary Flam, a portfolio manager at Los Angeles-based Bel Air Investment Advisors.

“Investors are asking if this is just a slowdown or the start of the next recession,” said Gary Flam, a portfolio manager at Los Angeles-based Bel Air Investment Advisors.

“One of the things to be avoided is the perception that debt service is negotiable,” said Ken Naehu, head of fixed income at Bel Air Investment Advisers.

“The underlying economy is the biggest driver of the markets at this point,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “If this economic soft patch continues then you’re most likely going to see earnings estimates come down and you’re going to see the market move lower. How much depends on if it’s just a lengthy soft patch or the beginnings of the next recession.”

“Last year was uneven, this year is uneven. The mentality is, when things are good everybody feels good and wants to buy stocks, and when things are bad everybody feels bad and wants to sell stocks,” he says. “In a range-bound market that’s the worst thing you can do. You end up buying high and selling low. You have to counter your instincts.”

“There are unanswered questions out there,” said Timothy McCandless, senior stock analyst for Bel Air Investment Advisors, noting the similarities to last May’s slowdown.

“Seasonality is the big issue. Things are quiet this time of year,” especially as a long holiday weekend approaches, said Todd Morgan, senior managing director at Bel Air Investment Advisors.

“Seasonality is the big issue. Things are quiet this time of year,” especially as a long holiday weekend approaches, said Todd Morgan, senior managing director at Bel Air Investment Advisors. “There’s no urgency to own more common stocks at this juncture.”

“We’re bouncing around in a trading range as people are uncertain about what will happen when QE2 comes to an end,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “Nobody really has a lot of conviction. It’s hard to make big bets in this environment.”

“We’re bouncing around in a trading range as people are uncertain about what will happen when QE2 comes to an end,” said Gary Flam, portfolio manager at Bel Air Investment Advisors. “Nobody really has a lot of conviction. It’s hard to make big bets in this environment.”

Recipient of the Jewish Family Service of Los Angeles’ Spirit Of Humanity Award Is Recognized by the Leading Wealth Management Firm Honored For His Ongoing Dedication To The Community

LOS ANGELES – May 19, 2011 – Bel Air Investment Advisors, LLC (Bel Air) (http://www.belair-llc.com), a leading independent wealth management advisory firm to high net worth individuals, families, trusts and foundations, is proud to acknowledge Senior Managing Director, Todd Morgan, as the recipient of Jewish Family Service of Los Angeles’ (JFS) Spirit of Humanity Award for his continuing service and the establishment of The Morgan Aging with Dignity Fund.

“Bernanke has said time and time again the Fed will be there to support the economy,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “They might not call it QE3. It might come under a different form or different disguise. But the government will continue to [...]

Darell Krasnoff featured in the Wall Street Journal’s Video, “Wealth: Before You Buy Gold, Watch This.”

Todd Morgan isn’t a family therapist, but he’s seen his share of feuds. Not surprising when there’s billions of dollars at stake. A longtime Goldman Sachs investment counselor, Morgan now caters to L.A.’s wealthiest individuals as senior managing director and co-founder of Bel Air Investment Advisors. Besides giving investment advice, the Century City firm specializes in helping families navigate the complex issues of wealth transfer and business succession. The 63-year-old said there’s a fine line to be walked when advising wealthy parents, who need to know how to pass along the family fortune without either causing resentment among their children or sapping their will to succeed.

Tim McCandless discusses Disney Q2 Earnings Reaction on CNBC’s Closing Bell.

Todd Morgan featured in the Jewish Journal of Greater Los Angeles for receiving Jewish Family Service of Los Angeles’ Spirit of Humanity Award and for his contributions to the organization and community.

“They gave risk-asset investors what they wanted to hear,” said Gary Flam, a portfolio manager at Los Angeles-based Bel Air Investment Advisors, which manages $6 billion in assets.

“The fact that the Fed is not going to get in the way is what’s giving investors renewed confidence to take stocks to levels we haven’t seen in three years,” he said.

“First and foremost there are no shortage of reasons to worry. But by orders of magnitude economic growth is most important,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles and a stock bull who believes investor worry is at an unnecessary extreme.

“These headwinds take on more importance when economic growth slows,” he adds. “The rub is trying to figure out when economic growth slows. From that standpoint, it’s a difficult thing.”

“BP isn’t drilling in the deep water of the Gulf of Mexico for the intellectual challenge,” says Gary Flam, a portfolio manager at Bel Air Investment Advisors LLC in Los Angeles, which oversees $5 billion. “It’s because that’s where the oil is.” He is overweight energy in his portfolio.

“Corporations are putting cash to work. They are not just letting it build on balance sheets,” said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “Those metrics get skewed by companies that are top-heavy and with cash trapped offshore.”

“They continue to come to the rescue and so far have done a good job,” said Todd M. Morgan, senior managing director of Bel Air Investment Advisors LLC in Los Angeles, which manages $6.5 billion. “There is an old saying ‘Don’t fight the market. Don’t fight the trend.’ It appears that the trend is stable and as earnings move higher, the stock market wants to move higher.”

“There is an old saying: ‘Don’t fight the market, don’t fight the trend,’” said Todd M. Morgan, senior managing director of Bel Air Investment Advisors LLC in Los Angeles, which manages $6.5 billion. “It appears that the trend is stable and as earnings move higher, the stock market wants to move higher.”

Todd Morgan featured in the Wall Street Journal’s Video, “Wealth: Blue Chips, Small Caps & Managed Futures.”

Bank of America’s dividend setback was hard for investors to swallow, after several months of wide anticipation of a payout. “A capital return was highly anticipated, and the market had already discounted a significant uptick,” Gary Flam, portfolio manager at Bel Air Investment Advisors said.

“The combination of the Middle East turmoil, uncertainty in Japan, and these Fed purchases has put an underlying bid in the marketplace right now,” said Kenneth Naehu, head of fixed income at Bel Air Investment Advisors.

“You have to understand that whatever you want to call it—a hundred-year flood, Black Swan, sixth standard deviation—they happen a lot more often than the probability models will tell you,” says Gary Flam, portfolio manager at Los Angeles-based Bel Air Investment Advisors, which oversees about $6 billion for high-net-worth clients.

“It comes down to two things: Monitoring your risk-reward and also understanding the behavioral aspects of investing,” Flam says. “Your own psychology is going to be your own worst enemy. You’re going to want to invest when you’re most comfortable with what’s going on around you, and then the stocks have priced that in. You’re not going to want to in invest in times of uncertainty, and that’s usually the best time to be investing.”

“You always have to be focused on not just the upside but the downside as well when investing,” Flam says. “‘Margin of safety’ is what the value investors call it.”

Todd Morgan and Darell Krasnoff chronicle their experiences with celebrity clientele.

“People are still underinvested,” said Timothy McCandless, senior equity analyst for Bel Air Investment Advisors. Despite continuing concerns about high oil costs, he believed the ongoing support of the Federal Reserve’s asset purchases means that investors will continue to push up stock prices.

“The last couple of months, the mentality in the market has become a buy-the-dip mentality as confidence in the economy has come back,” said Gary Flam, portfolio manager at Bel Air Investment Advisors.

“Going forward, the market is going to be more volatile than it’s been in a long time,” said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

“With a market that has run as far and fast as this one has, clearly negative headlines, like the ones about Israel and Iran, can have a negative impact,” said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles.

“I think everybody is wondering what spread it will take to move that kind of size with headlines the way they’ve been,” said Ken Naehu, managing director and head of fixed income at Bel Air Investment Advisors in Los Angeles. “There are still concerns out there.”

Kenneth Naehu, a managing director at Bel Air Investment Advisors, a California firm that oversees $6 billion in assets, said New Yorkers still might get hit with tax increases.

“Strong revenues are a reflection of a strong economy, and that’s good,” says Gary Flam, a portfolio manager at Los Angeles-based Bel Air Investment Advisors, which manages $6 billion in assets.

Some issuers facing substantial budget shortfalls, such as California, may be pushing back sales, according to Ken Naehu, head of fixed income at Bel Air Investment Advisors in Los Angeles.

Super-rich Americans are cautiously dipping their toes in the stock market when they really ought to be diving in, veteran investment adviser Todd Morgan told Reuters.

Kenneth Naehu, managing director at Bel Air Investment Advisors, a California firm that oversees $6 billion in assets, said the cloud of sour, frightening news and commentary overhanging munis was so thick the S&P move will have little effect on Illinois bonds.

“There was definitely some fear F5 did not beat…and that had a lot of people gut-checking on the high flyers,” said Neal Karchem, senior equity analyst at Bel Air Investment Advisors. “All the big winners from last year seemed to give some back.”

“We’re not seeing as enthusiastic of a response for illiquid investments,” said Todd M. Morgan, senior managing director at Bel Air Investment Advisors. “If they were going to put $10 million to work, maybe $250,000 or $500,000 would go into an illiquid investment, but not 20 to 25 percent.”

Mr. Morgan said some of this was because of existing, illiquid investments people made with past bonuses. But if anything, financiers are investing their long-term money with more creativity.

Wall Street Week’s Al Berkeley sat down with Margaret D. Patel, Senior Portfolio Manager, Wells Capital Management, and Darell Krasnoff, Managing Director, Bel Air Investment Advisors. Ms. Patel manages two funds, both blending equities and fixed income securities. Mr. Krasnoff’s firm manages $6.5 billion in assets for wealthy individuals, with a $20 million account minimum.

What does a healthier labor market mean for stock market, with Todd Morgan, Bel Air Investment Advisors.

Kenneth Naehu, managing director and head of fixed income with Bel Air Investment Advisors in Los Angeles, said though that the bigger concern is not that China may start selling. It’s that China’s demand for Treasuries will wane.

“At this point it’s all about a stronger economy than people had been expecting three or six months ago,” Gary Flam, portfolio manager at Los Angeles, Calif.-based Bel Air Investment Advisors said.

“It wouldn’t be a surprise to see good earnings and more muted returns, especially given the results we’ve seen” in the stock market, says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “Buy-the-dip mentality has returned to stock investors and that will continue to be the best strategy for at least the first half of 2011.”

“Liquidity is not the greatest right now on the street,” said Ken Naehu, managing director for fixed income at Bel Air Investment Advisors in Los Angeles. “If it is a name that large buyers can add, or don’t have too much of, they might have a fighting chance. But if it is not, this is going to be a tough environment unless things change dramatically in the next week or so.”

“It’s going to be difficult,” said Ken Naehu, managing director at Bel Air Investment Advisors. “But he’s been there before so he knows what to expect, and he’s got a fighting chance to be successful.”