Edward Jones
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Edward Jones provides financial services for individual investors in the United States and, through its affiliates, in Canada and the United Kingdom. Every aspect of the firms business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firms 10,000-plus investment representatives work directly with more than 7 million clients to understand their personal goals Ð- from college savings to retirement Ð- and create long-term investment strategies which emphasize a well-balanced portfolio and a buy-and-hold strategy. Edward Jones embraces the importance of building long-term, face-to-face relationships with clients, helping them to understand and make sense of the investment.
The Environment
At Edward Jones, they refer to diversity initiatives as inclusion. This represents more than a simple wording change. “Diversity” is a way for Edward Jones to recognize and celebrate their differences. “Inclusion” provides direction on how these unique points of view can be understood and used for the good of the firm and their associates. Their inclusion initiative is instrumental in fostering an environment that encourages new and innovative thinking, and acknowledges the positive contributions individuals from diverse backgrounds can make in the success of the firm. They remain committed to attracting and developing an outstanding team of associates, and supporting each one to achieve his or her full potential.
Economy
According to Kate Warne a Market Strategist for Edward Jones stated that after experiencing volatile markets in 2007, many investors may be concerned about what lies ahead:
Will the credit crisis and mortgage problems get worse or be resolved quickly?
Will the economic growth of the UK and global economies slow?
Will any increase in inflation be short-lived or last longer?
Will oil prices go up or down?
Will the pound weaken further against the euro?
Will there be more global political instability?
In her point of view, most of these concerns will likely continue in 2008, leading to another year of market uncertainty. However, that should not deter you from investing today.
Whats Edward Jones View?
As there is great uncertainty about many key issues, they believe many investors may need to reduce the risks of their portfolios. To do this, investors may want to consider, if appropriate:
Selling speculative investments
Adding growth and income investments
Adding fixed-income investments
Partly due to housing weakness, the Bank of England (BOE) expects slower UK economic growth Outlook 2008 in 2008. As a result, it has signaled its intent to continue reducing short-term interest rates. A quick response from the BOE, as well as from other central banks, would reduce the duration and severity of a slowdown. Whilst slower growth is a concern, it should also help calm worries about higher UK inflation during 2008. Globally, economic growth is expected to remain reasonably strong, which should provide a generally supportive environment.
However, as in 2007, currencies and financial institutions appear likely to continue to be turbulent. To help prepare, you should review your investments with your financial adviser. Check that you own an appropriate proportion of international investments (E.J. recommend between 15% and 35% of your portfolio). If you own individual shares, review the financial services shares you own. Jones suggest selling those companies whose businesses are not well-diversified and reducing the proportion of financial services in your equity portfolio to no more than 17% if needed to remain properly diversified.
If you are you waiting to invest until the markets becomes calmer? That is not the best approach. Thats because you will almost certainly miss times when the shares move higher, as well as times when they drop. Historically, the gains are larger than the declines, and the stock market tends to trend higher.
Industry
Productivity is a measure of how much output a firm can get from its inputs Ð- and therefore is the measure of production efficiency. In a national economy the higher the rates of productivity of the firms within that economy, the more successful is the economic output of that economy, and the higher are the income levels of the population. The popular measure of productivity in the U.S. economy is the measure of output per hour in the non-farm business sector. The most recently reported quarterly data was for the third quarter of 2007. They see in the following chart that the rate of increase for the third quarter was up to over 6% (which is calculated as the annual rate of increase since the second quarter of 2007). That was the highest quarterly rate of increase in the last four years. Hopefully, the increase for the fourth quarter will be high enough to put the data for the year 2007 well above the 1% rate of increase in 2006.
Survival Factors
I feel the number one survival factor of Edward Jones is locations. They operate a network of about 7000 small offices, which are located conveniently to customers and are designed to encourage personal relationships with brokers. The number and location of branches within each community is determined by a variety of factors, including population, age of residents and investable assets.
Edward Jones has also utilized the internet very well, while other financial firms have not. They have tailored the internet to strategy. It strategy is to provide conservative, personalized advice to investors who value asset preservation and see trusted, individualized guidance in investing. They have embraced the internet for internal management functions, recruiting, and for providing account statements and other information to customers. However, it has no plan to offer on-line trading, as its competitors do. Self directed online trading does not fit Joness strategy or the value it aims to deliver to its customers. Jones, then, has tailored the use of the internet to its strategy rather than imitated rivals. The company is thriving, outperforming rivals whose me-too internet deployments have reduced their distinctiveness.
Customers