Tag Archives: investments

Chacopulos, Theresa 3-12_cropped_USE THIS ONE

Chacopulos among Top 100 Women Financial Advisors

Theresa Chacopulos, Senior Financial Advisor and Senior Vice President – Investments, at Wells Fargo Advisors, LLC, in Scottsdale, Arizona, was named to the prestigious 2013 Barron’s “Top 100 Women Financial Advisors” list.  Chacopulos was number 8 on the list.  This is her 6th time making the list.

The list, published annually, provides readers with a comprehensive, objective look at the top women advisors as determined by the volume of assets overseen by the advisors and their teams, revenues generated for their firms and the quality of the advisors’ practices.  Barron’s magazine is one of the industry’s leading publications.

Chacopulos has consistently been recognized for her client service standards at Wells Fargo Advisors where she’s been named a “Premier Advisor.”  The Premier Advisor program honors those advisors who are meeting or exceeding Wells Fargo Advisors’ highest standards of excellence.  Earlier this year, she was also recognized as one of Barron’s 2013 “Top 100 Financial Advisors” in the country, where she was ranked the number one advisor in the state of Arizona.  In 2011, she was inducted into Research Magazine’s “Advisor Hall of Fame.”

Chacopulos has been with Wells Fargo Advisors for 25 years and has 29 years of experience in the industry.  She is very involved in her community, choosing to dedicate her time to the Phoenix Zoo and Autism Speaks.  Her office is located at 8601 N. Scottsdale Rd. Ste. Scottsdale, AZ  85253.

market volatility

Market Volatility For Investors

There are many perspectives to market volatility that investors can research, monitor and learn about. Some of these forms of volatility include actual historical volatility, actual future volatility, historical implied volatility, current implied volatility and future implied volatility. This can be very confusing so let’s look at the most commonly used in investing historic volatility for our discussion.

Volatility can be defined as the size and frequency of the fluctuation in the price of a particular stock, bond or commodity (source: Barron’s Business Guide, Fourth Edition, Jack Friedman). As investors, it’s important to have some understanding about volatility in the marketplace as well as how some investment classes have done in the past. Please keep in mind that past performance is no guarantee of future results. However, with research about a particular investment or asset class, it can help provide more understanding about the level of volatility within an investment.

When measuring volatility, investors may want to factor in a short-term or long-term analysis for their investment strategy. This is important and will vary per investor due to their investment time frame. For example, the Standard & Poor’s 500-stock index for the last 20 years has been able to earn just above nine percent return on average. Although, the five-year average for the S&P 500 stock-index is just below three percent. As we can see, the time frame of investing can impact one’s portfolio. So it’s important to consider the length of time for each investment — whether it’s a retirement account, a college savings plan or non-retirement money slotted for short-term use.

Another way that investors may try to reduce volatility in their portfolios is to invest in different asset classes. This way the investments are not limited to one area or sector of the markets. Also, by having a combination of different investment strategies in different classes, it may limit some potential volatility. It is important to know that using diversification as a part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in declining markets.

Investors typically have assets for different purposes, like retirement, kid’s education or personal saving. So having a strategy for each of them and factoring in the amount of volatility that is comfortable should be a consideration. In many cases, working with a financial profession can assist investors with this, and I also highly recommend reviewing the investments and strategies on a consistent basis.

For more information about market volatility, visit jacobgold.com.

Securities and investment advisory services offered through ING Financial Partners, Inc. Member SIPC. Jacob Gold & Associates, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc. This information was prepared by Michael Cochell of Jacob Gold & Associates, Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.

Are Your Investments Safe Or Risky?

Risky Investments: How Much Of Your Porfolio Is Risky?

It’s been only four years since our Great Recession, and the investment world has changed drastically. Many investors are thinking, planning and attempting to grow their wealth more cautiously. In many cases, it’s not about growth but preserving what one already has.

It wasn’t long ago when general planning of life was much simpler. We live in a constantly changing world of politics, finances, technology, healthcare and social integration. These elements will continue to change, so we must understand and take control of our decision-making.

When making financial decisions it is important to know how much of a portfolio is considered risky and how much of it may be considered less risky.

There is no investment that is 100 percent safe, but there are some that can be less risky than others.

Most investments can be analyzed by considering three different factors: an investor’s potential loss of principal, loss of purchasing power, and illiquidity.

An investor’s risk tolerance will vary from person to person. When factoring the amount of risks within investments, it is critical to understand the investment and the risk for potential loss. We also need to be aware that our dollars today will most likely be worth less in the future; therefore, our purchasing power is at risk. Some investments that have surrender costs or are tied to investment strategies, such as real estate, can restrict the liquidity needs of investors. This is another form of risk that investors must be aware of, specifically when considering long-term investments. Generally, the greater an investment’s possible reward over time, the greater its level of price, volatility or risk.

Remember, the important factor is to have clear goals so that investment strategies will fit within the risk you’re willing to take. These goals should involve not only the growth potential, but also the amount of safety within the investment. Investing a portion in more risky investments allows for growth, and having a portion in less risky type of investments helps reduce risk within a portfolio. Using diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss in a declining market.

Another way to consider investments in a portfolio is to identify the investments that clearly do not fit within the guidelines of your safety level. These should be excluded right away. Avoiding big mistakes is a form of safe decision-making. Some examples are: avoiding long-term surrender investments, avoiding investments you don’t understand, and lumping all of your investments in one type of strategy or institution.

We consider risk in our lives in many ways and it is important to consider risk in our financial decision-making. We must look at the big picture and refrain from only considering the potential return because those results can quickly change. Identifying specific goals can make it much easier for investors to choose appropriate investments for their needs. Goals help us keep investments on target, avoid making big investment mistakes, and refrain from investments that are not appropriate for our needs.

For more information about risky investments, visit jacobgold.com.

Securities and investment advisory services offered through ING Financial Partners, Inc. Member SIPC. Jacob Gold & Associates, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc. This information was prepared by Michael Cochell of Jacob Gold & Associates, Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.
Real Estate Investments

Including Real Estate Investments in Your Retirement Portfolio

Are you aware that you can use your retirement account to purchase real estate?

Many financial advisors, accountants, attorneys, and real estate professionals are unaware of this option, as are individual investors.

IRA’s and Qualified Plans can provide funds for a variety of real estate transactions, including raising capital, bridge financing, raw land, purchasing and developing commercial property, buying leases, and many more.

After determining which type of plan best suits your needs and requirements, you may decide to control your own investment decisions and opt for the self-directed form of any of the available retirement plans. The majority of financial service companies (banks, insurance companies, brokerage firms) limit the kinds of investments that can be made to stock market based assets, or make investment recommendations part of their service. Instead, you can choose an independent administration firm that encourages and supports your desire to control your own investment decisions in what you know best — real estate.

At Vantage Self-Directed Retirement Plans we neither limit your investment choices nor give you investment advice. You are encouraged to maximize the potential of your retirement assets as you see fit. We offer free weekly educational workshops which are designed to help investors gain knowledge of self-directed investment transactions. We request all documents necessary to process transactions, receive investment income and pay investment expenses, and provide the required reporting to the IRS.

The bottom line is that you can control your retirement plan and self-direct it into investments other than, or in addition to stocks, bonds, and mutual funds.

We invite you to visit our website, VantageIRAs.com, where you will find time-saving video tutorials, visual flowcharts, and user-friendly investment purchase checklists to help you gain confidence about the flexibility of these powerful investment vehicles.

For more information, contact JP Dahdah, CEO, Vantage Self-Directed Retirement Plans, (480) 306-8404.

Advance And Retain Women’s Role In The Financial Field - AZ Business Magazine Nov/Dec 2010

Two Valley Groups Are Working To Advance And Retain Women’s Role In The Financial Field

It wasn’t so long ago that a typical business meeting at a banking or financial institution was dominated by the good ol’ boys network. Well, not anymore. Today, you are likely to see more women among the dark suits at the table.

“I have watched women evolve,” says Deborah Bateman, executive vice president of specialty banking and marketing at National Bank of Arizona, and a founder of the Women’s Financial Group. Bateman boasts a professional background spanning more than 40 years in the banking industry.

“Early in my career, I think we tried to mirror men,” she says. “Over time, women have recognized the skill sets they can bring to business, such as collaboration, connecting, coaching (and) creating value inside Corporate America.”

Women’s roles in the banking and finance sectors are widening, and the proof is in the numbers. In 2009, according to the U.S. Department of Labor, 54 percent of American women were employed in fields related to financial activities. This includes finance and insurance, banking and related activities, securities, commodities, funds, trusts and other financial investments. In Arizona, the percentage of women working in the finance and insurance industry also is significant. U.S. Census data shows there are actually more women than men working in these industries.

Although women have come a long way from their beginnings in these formerly male-dominated sectors, it is an ongoing struggle. According to the U.S. Census Bureau, the disparity in salaries for men and women is significant.

In the Phoenix Metro area, during the third quarter of 2009, women made up 14.4 percent of the 35-44 age work force in finance and insurance (private sector) versus 10.4 percent for men. However, women in these fields average a monthly salary of $4,350, compared to men’s $6,643. For women aged 45 to 54, the salary gap grows even wider. In this age group, men on average earn 64 percent more.

“Women need to be more assertive about asking for money and tooting their own horn,” says Donna Davis, CEO of the Arizona Small Business Association (ASBA) and a member of the Women’s Financial Group. “It’s OK to promote your organization, it’s OK to ask for money and to ask for more.”

However, Emily Amparan, vice president of development at Factors Southwest, says she thinks the numbers don’t reflect the real gains women are making.

“I always hold those figures suspect, as I rarely encounter hindrances to make money and achieve success in the financial field,” she says. “I think if you believe it to be so, it probably is … however, the most successful women in the finance industry don’t pay any mind to talk of obstacles, as they forge ahead to make their own path.”

Helping women make their own paths in the financial sector is the mission of a number of organizations emerging all over the Valley. For example, Bateman founded an internal mentorship program at National Bank of Arizona in 2009, that quickly expanded to outside industries and individuals. Later renamed the Women’s Financial Group, the organization’s focus is to bring together women of all professional backgrounds to promote financial planning, mentoring, business services and networking.

Bateman says she hopes the Women’s Financial Group can serve as a catalyst for women to succeed and attain higher positions in banking and finance without compromising their identities.

“For years and years, we would dress in tailored blue suits and wear ties,” Bateman recalls. “Women can be women in the business world. It brings enormous value to business, to their organizations and to the community.”

In addition, Davis says the group can help “women become more savvy financial business people.”

At a recent Women’s Financial Group event, women of diverse backgrounds, both personal and professional, filled the room. Some women were just beginning their careers and some were veterans with decades of experience. But all were there with a mission: to pave the way for future success in their respective financial careers.

Another group aimed at women in the financial sector is Women in Banking, the local chapter of the national Risk Management Association. Founded in 2006, its first meeting took place at a Chevy’s restaurant with 14 business women in attendance. Today, the group includes 50 to 80 bankers, consultants, marketers and business owners from around the Valley. And despite its name, the committee encourages men to join and attend its events.

“There is definitely a need for a professional organization that brings business and banking together for positive networking,” says Amparan, who is a member of the organization’s leadership team.

Along with helping women plot their careers in financing, Women in Banking is a strong supporter of Fresh Start Women’s Foundation, a nonprofit organization dedicated to helping women in areas such as career change, personal growth, family relationships and more. The group collects clothes for donation and works to raise money to sponsor Fresh Start’s annual golf tournament and fashion show.

That type of commitment to all women in the community is just one example of the impact women professionals in finance are making.

“Women in business are tremendous bridge builders and relationship makers,” Amparan says. “Banking and finance has become more of a warm, open environment to the credit of professional women across the state and country. People are starting to take notice of the successful way women are starting to do business and build relationships.”

Arizona Business Magazine Nov/Dec 2010

Wall street bull

Volatility Can Be A Portfolio’s Greatest Threat

The up-and-down swings of the markets are giving everybody vertigo. Yet most people fail to understand how critical it is to minimize the volatility within their investments. Besides getting a better night’s sleep, there are sound mathematical reasons. Most people are astounded to learn that they can actually earn a lesser rate of return with a portfolio with reduced volatility, and yet end up with more money left to spend. Although some may find this counterintuitive, this is the message financial advisers should be emphasizing to their clients.

It is essential to use strategies that protect your principal, minimize losses and reduce volatility. Did you know that if your investments are down 40 percent, you will have to earn 67 percent to get back to even? Worse yet, if your investments go down 60 percent, you need a return of 150 percent just to break even.

Historically, with previous downturns it has taken years for investors to recover their losses to get back to even. For example, from the start of the downturn in 1929 (which lasted 10 years), it took the stock market 25 years to crawl back to break even. It took seven-and-a-half years from the start of the 1972 bear market, and more than five years from the March 2000 high for values to creep back to break even. The more volatile the investment, the larger the potential problem.

So how can you mitigate risk and reduce volatility in your investments?
Diversification — It’s a time-honored strategy. However, most people are shocked to discover that despite all the various investments and different mutual funds they might own, after doing an “overlap for duplication” analysis, they uncover surprisingly large amounts of investment replication.

Proper asset allocation — This involves placing investments in a mixture of different asset categories, including U.S. and international, large cap and small cap, value and growth, emerging markets, as well as various types of bonds. Typically, a portfolio having 12 to 20 asset classes is considered well positioned. However, following last year’s “perfect storm,” almost every asset class was down, including most types of bonds (typically a safe haven during turbulent times).

Investments with upside potential and principal protection — Structured notes can provide principal protection, while simultaneously providing the upside of a particular index. On a related front, there are “fixed index” annuities. Although an alternative, I generally find the insurance company’s “trust me” position difficult to accept, especially their “black box” philosophies. Although you could always move your funds elsewhere, the high and oftentimes long-term surrender charges tend to lock you in for 10 to 18 years.

Guaranteed growth and income riders — When offered on “variable” and “fixed index” annuities they can provide a safety net to override actual account losses. One needs to be sure to navigate the various rules, understand there may not be a legacy to leave behind, as well as take the oftentimes high and long-term surrender fees into consideration. However, in the right circumstances, this strategy can make sense.

Multiple strategy investments — These did the best over the last 20 months, in addition to having a respectable long-term track record. Investments of this type vary between aggressive to conservative, and include hedge funds, managed futures, commodities, PIPEs (private investment in public entities), private equity, senior debt, etc. The “buy in” on these types of investments can be a drawback, as many are not available unless your investment account is $1 million or larger, as they can require a certain investment minimum or certain investor qualification.

Overlaying an “advance and protect” strategy — This is essential to help preserve principal, as well as help lock in gains. Although there are no perfect systems or guarantees, for most advisers utilizing this type of approach, it has delivered meaningful results and peace of mind for their clients.

We are experiencing what is being described as “a deer-in-the-headlights” market. The questions on many people’s minds today are “What should I do now? Should I stay the course and wait for things to come back? Or should I change strategies or possibly even my adviser?”

One should consider that not all investments come roaring back. Although the S&P 500 got back to even in May 2005, other investments performed less well. For example, the Nasdaq is still 63 percent underwater — more than nine years after reaching its high in March 2000.

A recent article in the Wall Street Journal commented on the results of an investor survey:
81 percent of the investors stated they were contemplating or in the process of changing their financial advisers.

90 percent of the investors with “brand named” firms planned to move some of their money; 70 percent planned to move it all.

86 percent of those planning to change were so upset, they recommended others avoid their current adviser.

No one can control the risk and volatility of the markets, so unless one thinks they can do it themselves, it is crucial to work with an adviser who understands how critical it is to reduce investment volatility in order to lessen a portfolio’s exposure to risk. Done correctly, reducing volatility should provide more consistent returns and dependable growth, and ultimately provide more income and a greater end value in your retirement years.

We are in very interesting times, and many people are now realizing they are in trouble. One does not need just any financial planner, but rather a true, unbiased professional adviser who can help guide them through the treacherous waters investors will undoubtedly have to continue to navigate. The decisions being made today could very well have a lasting impact on the rest of your financial life — so make them wisely.

Investing man

Changing Investment Management Firms Can Be Costly

Patience, it turns out, can be indeed a virtue — especially for retirement plan sponsors. Sunil Wahal, professor of finance at the W. P. Carey School of Business at Arizona State University, and his co-authors compiled a database of hiring and firing decisions made by more than 3,700 plan sponsors between 1994 and 2003. The reasons plan sponsors change investment management firms vary, but often the sponsors hire firms that have recently earned significant excess returns.

However, Wahal and his team found that those high fliers do not perform as well after they are hired, and the fired firms sometimes go on to turn in impressive numbers. If plan managers had stayed with their original managers, Wahal says, their excess returns would have been larger than those delivered by the newly hired managers.

“When firing decisions are made, one needs to be very careful and cognizant of the costs involved,” Wahal says.

Factor costs into decisions
Wahal’s study of the selection and termination of investment management firms by plan sponsors looked at 9,684 hiring decisions by 3,737 plan sponsors between 1994 and 2003. The plan managers hired by the sponsors were responsible for delegating $737 billion in investments. The study also examined 933 firing decisions by 515 plan sponsors between 1996 and 2003. Nearly $117 billion of investments were impacted by those decisions.

“There is an enormous amount of money that is invested in the market by plan sponsors. These organizations make a lot of decisions about who gets to manage the assets for the beneficiaries,” Wahal observes. “Sometimes the hiring and firing decisions they make work well. Sometimes they don’t. The frictions involved in these decisions are costly to beneficiaries.”

The rationale for a change varies. Plan sponsors usually fire investment management firms for poor performance, but sometimes they act because of an organizational change. For example, the investment management firm may have gone through a merger, or a star stock picker or portfolio manager may have left. The plan sponsor also may decide to change direction with its investments, such as switching from running a large-cap stock portfolio to a bond portfolio.

Factors that point to success
Wahal found that consultants are hired to assist plan sponsors in nearly two-thirds of all hiring decisions. Excess returns from consultant-supported decisions are higher, consistent with the notion that a consultant’s expertise adds value when selecting managers. But there’s a downside to consultants. They often take the blame, in place of the firm’s treasurer, when a company with a defined benefits plan selects a plan manager that performs poorly. Even so, using a consultant led to a 3.7 percent increase in three-year, post-hiring returns.

The researchers also found that returns were higher as the size of the plan increased, presumably because the sponsors of bigger plans have more experience selecting investment managers. In addition, they discovered that plan sponsors like to hire investment management firms within their own states. The study found that those in-state, post-hiring returns were positive.

Despite evidence that a number of factors can predict success, plan sponsors typically selected investment management firms by screening their performance based on excess returns. Firms are usually hired after investment managers have done very well, with an average excess return of 13.8 percent three years before the hiring decision.
Yet, after an investment management firm was hired, the study found the excess returns were close to — or below — zero.

“It’s not that they do poorly,” Wahal explains, “they don’t do as well as they had been doing prior to being hired. In other words, when you chase returns, you chase hot hands. But those hot hands don’t seem to persist.”
Wahal also learned that three years after the firing decisions, excess returns were sometimes up, with performance-based firings resulting in bigger return reversals. In fact, it was discovered that had plan sponsors stayed with the fired investment managers, excess returns would be more than what the newly hired managers delivered at some horizons.

Transition costs can add up
When a plan sponsor decides to fire an investment manager, the sponsor then has to take those funds and provide them to the newly hired investment management firm. This process entails what are commonly referred to as transition costs, that is, the cost of selling the old portfolio and creating a new one. Wahal says that “such costs can frequently be as much as 2 percent, and add to any other losses that the plan sponsor might suffer.” So, the newly hired manager is expected not only to deliver superior returns, but also perhaps to recover the 2 percent transition costs. Wahal argues that “to the extent that we do not live in Lake Wobegon, this is quite a challenge.”

“What’s really important is that the firing and hiring process be set up very well,” he says. “You can’t be too quick to jump the gun on firing and hiring because those costs have to be factored into the decision. Someone’s going to bear that loss and typically it’s the beneficiaries of the plan sponsors.”

Keith Maio President and CEO National Bank of Arizona

CEO Series: Keith Maio President and CEO National Bank of Arizona

Keith Maio
President and CEO
National Bank of Arizona

Assess the current state of the banking industry in Arizona.
It looks pretty tough. The economic environment is difficult. What we deal with in Arizona is that we have a real estate-dominant economy, so many of the local banks are heavy in real estate lending. And — as we all know and see and live in our homes every day — assessed values and real estate valuations have declined dramatically, and that puts pressure on banks. That’s starting to trickle through to the consumer segment and small business segment. Everybody is feeling impacted. That being said, I would tell you that the banks in Arizona, the vast majority, are highly capitalized. So they’ve got the capital base to weather the storm.

In terms of the storm, are you seeing any light at the end of the tunnel?
I haven’t seen the light yet. I know it’s there, but I haven’t seen it yet.

How has the turmoil at the nation’s largest banks affected Arizona-chartered banks?
I think it’s a little bit anecdotal in nature. Some of the problems that the big banks feel are not felt directly by the more local, Arizona banks. Local banks tend to be a little higher capitalized, which is a good thing, and their exposures are more direct-lending exposures versus securities investments and off-balance sheet vehicles.

At the end of the day it’s all about credit contraction, so it impacts people different ways. But the local banks are more direct lenders, so it’s what happens directly in their market.

Do you think that’s a positive thing?
I think it’s a positive thing, other than the fact that we have been impacted so badly in Arizona relative to the rest of the country. So that makes it tougher. But at least when you have direct exposures, you are able to assess on an individual basis what that exposure is.

We are hearing more about the role off-bank balance sheet structures have had in the sharp decline in capitalization among the larger national banks. What type of exposure to such off-bank balance sheet structures do local banks have?
Local banks don’t have much exposure there, and what it allows those banks to do is to assess their risk on a transaction-by-transaction basis, rather than market valuations on pools of securities. So it’s a little easier to assess their risk. Local banks have a little bit more capital to weather the storm, but their exposures on the lending side tend to be a little bit greater than the large national banks.

What challenges and opportunities does the current financial crisis hold for local banks in general, and National Bank of Arizona in particular?
Having been through this before, I think there is an opportunity — and as a CEO you’ve got to always look at the long run, not just the short run. You need to manage what we’re all in the middle of today, but you need to keep an eye on the long run. In getting through this, these tough times actually make people and good organizations better. You’ll learn, ‘What could I have done better before,’ and people who want to improve will improve.

Organizations that can improve end up much better off in the long run. And generally, anytime you have a market disruption — which this is — there’s turmoil in the market and there’s disruption. However, over the long run it presents market-share opportunities to banks. I think that’s an opportunity a lot of us have in the long run — to resettle what the market shares look like at the end of this. For the survivors, it’s a very good thing.

At the end of the day it’s all about credit contraction, so it impacts people different ways. But the local banks are more direct lenders, so it’s what happens directly in their market.

Do you think that’s a positive thing?
I think it’s a positive thing, other than the fact that we have been impacted so badly in Arizona relative to the rest of the country. So that makes it tougher. But at least when you have direct exposures, you are able to assess on an individual basis what that exposure is.


We are hearing more about the role off-bank balance sheet structures have had in the sharp decline in capitalization among the larger national banks. What type of exposure to such off-bank balance sheet structures do local banks have?

Local banks don’t have much exposure there, and what it allows those banks to do is to assess their risk on a transaction-by-transaction basis, rather than market valuations on pools of securities. So it’s a little easier to assess their risk. Local banks have a little bit more capital to weather the storm, but their exposures on the lending side tend to be a little bit greater than the large national banks.

What challenges and opportunities does the current financial crisis hold for local banks in general, andNational Bank of Arizona in particular?
Having been through this before, I think there is an opportunity — and as a CEO you’ve got to always look at the long run, not just the short run. You need to manage what we’re all in the middle of today, but you need to keep an eye on the long run. In getting through this, these tough times actually make people and good organizations better. You’ll learn, ‘What could I have done better before,’ and people who want to improve will improve.

Organizations that can improve end up much better off in the long run. And generally, anytime you have a market disruption — which this is — there’s turmoil in the market and there’s disruption. However, over the long run it presents market-share opportunities to banks. I think that’s an opportunity a lot of us have in the long run — to resettle what the market shares look like at the end of this. For the survivors, it’s a very good thing.

    Vital Stats





  • Executive vice president, Zions Bancorporation, parent company of National Bank of Arizona
  • Joined National Bank of Arizona in 1992
  • Has served as president since 2001; appointed CEO in 2005
  • Current chairman, Arizona Bankers Association board of directors
  • Bachelor of Arts, University of New Mexico; graduate, Pacific Coast School of Banking
Social media

Social Networks On Internet Pose Challenges And Opportunities For Businesses

Instinct: Nearly every decision a person makes in his or her lifetime can in some way be tied to an instinctual reaction. One of the most primal of instincts is survival and the key to our evolutionary climb has been the instinct to live in groups or the herd mentality. The instinct is simple — survival in numbers is far easier than going it alone.

The herd is now electronic and in the form of social networking on the Internet. No matter what your interests, you can find a social networking site that will allow you to communicate with like-minded individuals anywhere in the world, at any time. Technology, specifically the Internet, has removed traditional boundaries (distance, time zones, etc.) that previously limited “global gathering,” and this medium has literally exploded. Now more than any other time in our history people are gathering together. While virtual through the Internet, individuals continue to benefit from the comfort, safety and strength that are found in the herd.

Industries and businesses have increasingly been trying to figure out how to leverage the massive amount of information and consumers that are available on these social networking sites. Perhaps the two most prominent and recognizable social networking sites are Facebook and MySpace. Each has a demographic that is very appealing to businesses of all types. However, the primary obstacle to further leveraging these sites’ business appeal to date is resistance from the users to advertising or any other type of interference in their “personal space.”

For many social networking site users, the site represents a place of control and solitude from their everyday lives. Social networking site participants literally go there to get away and spend time in an environment that is entirely in their control. Now business is trying to integrate into a domain that many view as private.

While there may be a belief that these individual pages in MySpace, Facebook, Twitter, etc., are personal and private, the reality is they are not. Multibillion-dollar entities such as Microsoft and News Corp. would not have taken positions in them if they did not see the potential for a substantial return on their investments. The question is not if business is going to try to leverage these sites — the question is how. Advertising has always been the most obvious and first application of business on social networking sites, but how to advertise has been a trial-and-error process. Pushing advertising on users has proved problematic for both MySpace and Facebook.

The next avenue that business pursued was market research. In November 2007, Facebook encountered outrage from its users after it published users’ purchases for friends to see. While there was an “opt out” option, most users did not see it until after the fact. This tactic represented a huge PR issue for Facebook. However, this marketing tactic is another, and perhaps the most viable, business option for organizations to leverage through the social networking sites. The amount of data that the sites capture can be gold. But the site owners have to be extremely careful with how and what information they are sharing outside of the site. First there are privacy concerns, but second, a site that does not listen to the concerns and needs of its user base is destined for failure. With the rate at which new sites are popping up, the landscape to attract users is dramatically more competitive than it was even two years ago.

So the question still remains — will social networking sites become a tool for business to increaseproductivity, start small businesses, and develop larger organizations through market research? Maybe, but probably not.

To quote Tom Davenport, who holds the President’s Chair in Information Technology and Management at Babson College in Massachusetts, and formerly lectured at Harvard University: “I see no evidence that students andyoung adults — the audience for which these tools were originally intended — want to use the tools to do their business.”

The fact that many users go to these sites for relaxation and enjoyment leads me and others to believe that the use of social networking sites for business, other than advertising and marketing, is severely limited and not likely to take off anytime soon.

buyers market

Real Estate Companies Are Seizing Opportunities During The Bust

With dark clouds hanging over the country’s economy and property prices tumbling, many people consider the idea of buying real estate absurd. Yet Valley real estate experts contend right now is the best time to buy.

Jeff Pavone, principal of Commercial Plus in Scottsdale, says smart, experienced commercial real estate investors only buy property when the market is down and no one else is buying. Buyers today are sophisticated, have cash and are looking to pay a good price for quality, he says.

“A year ago everyone could buy real estate and get financing,” Pavone says. “But today, it’s only qualified buyers with a strong portfolio, which puts the buyer at an advantage.”

In spite of economic hurdles, Commercial Plus is still closing deals weekly and getting financing done for clients. It recently closed a deal on a property on Seventh Street and Camelback Road that sold for 20 percent less than last year. Pavone says the buyer was qualified to close, so he obtained 80 percent financing and closed right away.

UTAZ founder Craig Willett says his company stopped buying properties four years ago because prices were too high. Now they are back in the game and in negotiations to buy a number of parcels near hospitals in the Southeast and West Valley. UTAZ specializes in developing professional office villages for small businesses. Since many small business owners have a hard time getting financing, UTAZ offers a lease with option to purchase. Willett says that model used to be 15 percent of the company’s business, but is now 45 percent.

“Leasing with the option to purchase makes a lot of sense in today’s market,” Willett says.

Pollack Real Estate Investments in Mesa is also buying again after taking a three-year hiatus. Founder Michael Pollack is shopping around for multiple commercial properties from single sellers in California, Arizona and Nevada. The company’s focus is redevelopment and renovation projects. Pollack Investments currently owns, operates, manages and leases its own portfolio of more than 100 commercial and industrial properties in California and Arizona.

“Investors are getting more for their money right now than a year or two ago, so it’s a good time to buy,” Pollack says. “But it’s harder to get loans unless you have good credit and put down more money, which I support wholeheartedly.”

Pollack says great buys exist today on land in Arizona and in all sectors of real estate. However, buyers need to look hard for quality opportunities and analyze the numbers, since many sellers want the same price today that they could have gotten three years ago.

“We put a property in Mesa up for sale a couple months ago and sold it the same day,” Pollack says. “So, if a property is priced realistically and reflects the conditions of 2008, it sells.”

Local experts agree that residential property is also a good investment right now, especially homes being sold by banks and by homebuilders forced to sell standing inventory. Greg Vogel, chief executive officer of Land Advisors Organization, says many of these properties are back to pre-boom prices, so they’re a real bargain.

Phoenix-based investment firm Najafi Companies bought Trend Homes in June for $86.5 million. The deal allowed the homebuyer, which reorganized under Chapter 11 bankruptcy, to grow and expand its Valley operations. CFO Tina Rhodes says Najafi is committed to homebuilding in Arizona and looks to invest in companies with strong management teams and long-term potential.

Paradiso Development Corporation is moving forward on development plans for Paradise Reserve, a 40-acre, exclusive, luxury residential enclave bordering the Phoenix MountainPreserve on Lincoln and 40th Street in Paradise Valley. The desert retreat has 14 hillside estate lots ranging in size from one to three acres. Lot prices are $2.7 million to $5.4 million.

“The 14 lots at Paradise Reserve are the crown jewels of our project,” says Scott Schiabor, principal of Paradiso Development. “They are rare and unique, and that will help maintain their value and attract investors. A big part of our market is also immune to economic changes, so while we expect some downturn due to the economy, based on the rarity of the lots, location and our target market, we expect sales to go extremely well. For many people it is still a good time to buy real estate and make quality investments.”