Foresight saves clients from collapse of auction rate securities market

Before 2008’s auction rate market failures, LLBH d/b/a Coastal Bridge Advisors guided clients to safety and helped them avoid the market’s implosion.

In the months and years leading up to February 2008, many wealthy investors and institutions were heavily invested in auction rate securities, which at the time were deemed to be a cash equivalent but with a better yield than money markets.

Despite the fact that a large hedge fund with significant exposure to the auction rate markets failed in July 2007, Wall Street banks continued to market these securities as cash equivalents.

LLBH d/b/a Coastal Bridge Advisors liquidated auction rate securities positions one year prior to market failure

We became extremely skeptical about the viability of these securities and directed all our clients to liquidate their auction rate positions by August 2007.

A year later, when the auction rate securities market imploded, investors were unable to access what they previously thought were cash equivalents.

Fortunately for clients of LLBH d/b/a Coastal Bridge Advisors, our foresight and vigilance proved invaluable and they were unaffected by by the Auction Rate Securities Markets’ collapse.1

1. Past performance is no guarantee of future results. Please note this happened while the partners were still at Merrill Lynch.

 

IMPORTANT DISCLAIMER:
THESE CASE STUDIES ARE PROVIDED FOR ILLUSTRATIVE PURPOSES ONLY TO PROVIDE AN EXAMPLE OF THE FIRM’S PROCESS AND METHODOLOGY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE RESULTS PORTRAYED IN THESE CASE STUDIES ARE NOT REPRESENTATIVE OF ALL OF THE FIRM’S CLIENTS OR THE CLIENTS’ EXPERIENCES. DIFFERENT TYPES OF INVESTMENTS INVOLVE VARYING DEGREES OF RISK, AND ACTUAL RESULTS MAY VARY MATERIALLY THAN THOSE PORTRAYED HEREIN. THEREFORE, IT SHOULD NOT BE ASSUMED THAT THE FUTURE RESULTS OF ANY SPECIFIC INVESTMENT OR INVESTMENT STRATEGY (INCLUDING THE INVESTMENTS AND/OR INVESTMENT STRATEGIES RECOMMENDED OR UNDERTAKEN BY THE FIRM) WILL BE PROFITABLE OR EQUAL THE RESULTS PORTRAYED HEREIN. AN INDIVIDUAL’S EXPERIENCE MAY VARY BASED ON HIS OR HER INDIVIDUAL CIRCUMSTANCES AND THERE CAN BE NO ASSURANCE THAT THE FIRM WILL BE ABLE TO ACHIEVE SIMILAR RESULTS IN COMPARABLE SITUATIONS. NO PORTION OF THESE CASE STUDIES IS TO BE INTERPRETED AS A TESTIMONIAL OR ENDORSEMENT OF THE FIRM’S INVESTMENT ADVISORY SERVICES AND IT IS NOT KNOWN WHETHER THE CLIENTS REFERENCED APPROVE OF THE FIRM OR ITS SERVICES. THE INFORMATION CONTAINED HEREIN SHOULD NOT BE CONSTRUED AS PERSONALIZED INVESTMENT ADVICE. PLEASE CONTACT US FOR ADDITIONAL INFORMATION WITH RESPECT TO THE STRATEGIES AND/OR INVESTMENTS DESCRIBED HEREIN.