FA Independence Day Commemoration

This Blessed Land

After growing up in Communist Romania and emigrating to Israel where he served in the military during the historic 1967 war, Alex Solomon arrived at the Port of New York 41 years ago, capping a grueling eight-day sea voyage from Genoa, Italy. His sole possessions: a leather jacket, two shirts, a pair of pants and $11 in cash.

Today, this Long Island financial advisor has more than $10 million of assets under management, lives in a “beautiful suburb” (Port Washington) with his wife (herself a successful hospital executive) and enjoys a family income that’s in the top 1% of the population. He and Vera, his wife of 40 years, put their two children through Ivy League colleges (Columbia and Cornell). One is now a successful attorney and the other a musician-composer-performer who is “making a good living” in a highly-competitive profession.

“Where else but the United States could all this happen? Alex Solomon asked his interviewer. “This is truly a blessed land.”

Solomon, a representative of Vanderbilt Securities, Melville, pretty much lives by the same basic principles of sound investing as most advisors. Nevertheless, his love for his adopted country is evident in his recommendations to clients.

“Why invest overseas when there are so many good opportunities here? he asks.

“The U.S. is still the lightning rod of the markets,” Solomon contends. “When the U.S. does well, 60-80% of the rest of the globe does very well. When we go into a recession, they go into a recession; when we recover, they recover very well.”

Solomon was reminded of all the negatives now characterizing the U.S. economy that could adversely affect U.S. equities:

A tepid economic recovery, a weak housing sector, rising debt and deficits, trade complications, escalating credit contagion, overly aggressive financial regulation and tax increases. Surely all this weakens U.S. equities relative to foreign opportunities.

“Our economic fundamentals are sound,” Solomon replied. “Manufacturing is up while interest rates and inflation are low. Following the Great Depression, it took this country 15 years to get the GDP back to where it was. This time, we’ve made significant strides in just a few quarters.

“Now look at Europe,” he continued. “It has high sovereign debt, deflation and an inflexible currency system that’s causing problems. And Japan: It’s economic recovery is slow and there’s deflation, a declining population and a banking system under siege.”

He was asked about the so-called emerging markets, particularly Brazil, Russia, India and China – those with the largest economies.

Then Solomon paused – as if to make a point of clarification.

“Look, I don’t scorn overseas investments,” he said. “We have about 5% of our clients’ assets invested overseas a decent view of what’s going on. I see the possibilities and in China and other emerging markets, but even the best money managers have difficulty getting accurate and documented information from them. You can’t be sure their information is dependable. That’s really my issue with investing overseas. Here in the U.S., there’s more transparency.”

As further evidence of American superiority, Solomon pointed to the $1.9 trillion in U.S. debt held by the Chinese.

“The Chinese are incredibly shrewd,” he said “They’re getting a lot of advice from consultants from all over the world. Yet they don’t diversify, diversity, diversify. Most of their holdings are in U.S. government paper – even though they make next to nothing on the notes. They know it’s the safest paper on earth.”

Solomon’s penchant for safety – and value – is reflected in his high rate of client retention. Virtually all of his clients have been with him a long time – through many market ups and downs. He serves mostly individual clients, plus a few pension and profit-sharing plans.

He began his financial services career with Bank of New York after holding a variety of jobs to work his way through Baruch College. After a brief stint in the real estate business, he became a Merrill Lynch trainee and later moved on to Prudential Securities. In 1990, he joined Goldis Financial Services, a Garden City (LI) broker/dealer which also did insurance and accounting. When Goldis closed its brokerage operation in 2003, Solomon moved on to Vanderbilt Securities where he’s been ever since.

He credits the steady advancement of his wife Vera -- from lab technician to senior executive at Montefiore Hospital – with allowing him to remain an investment advisor through the tough years.

“Where else but in America? Alex Solomon asked yet again.

FA