Uncle Sam, the money man…

The windows outside the Lauttasaari flat were black and it was a too wet to go for a walk. Pekka felt that it was time to make a decision about the money on their account. It was now 6 months after the car accident that had killed Pekka’s parents. They had sold the house and received the insurance payments. Two million was waiting to be put to use.

“Laura, we have to discuss what we have to do with the money. We just can’t leave it in the bank. They are only paying next to nothing while it is on deposit.”

She looked up from the paper. She hated having this discussion because she knew that Pekka was too eager to play the markets. He had been at Kone as a programming engineer for 15 years and together they had a good life with both of their salaries. As a lawyer she earned enough as a partner to keep both of them comfortable.

“I spoke to the guys today and they all say that we should go for the Russian funds. They all see so many opportunities, even with sanctions!”

Laura smiled weakly. It was no use talking him out of it. She had seen her father do the same 10 years ago when he had lost over half of his savings by investing in Nokia shares. He had taken it hard and never forgave himself.

“If you like, let’s go and see Veronica Olsson at Lundgren & Co. tomorrow. I’ll take an hour off from the office at lunch-time. They had that advertisement in the newspaper last Sunday. I read that they have over a hundred funds. You were at Otaniemi with her – and you always said that she was OK.”

Pekka looked hard at Laura. He did not want to appear rude. He could wait a couple of days before putting the money in those Eastern European funds. And it would be fun to see Veronica again…

“Veronica – I have been looking at your sales report. You have not achieved your monthly targets for two months now and this month is far from rosy.”

Matts was always pushing for volume. The bastard never made any effort to help out or come up with ideas. She was the only one with Tom that ever crunched the numbers and came up with sound recommendations. She hated the “car salesmen” in the office but she loved meeting customers and working on their portfolios. She was not the best earner but she knew that her clients got the best deals. Matts just wanted more volume no matter how hard you tried. She did not think that a €10,000 was a bad salary but it was only a third of the two best salesmen.

Matts had told them to push the Eastern European stuff the next four weeks. The technology shares were far too hot and it was time to change the sales pitch. That was the only comment that he had made at their weekly strategy meeting. She had warned them to be wary of having too much in the client portfolios. The correlation between oil prices and Putin’s popularity made it a risky holding. She preferred real diversification with low correlation values between the holdings. She had recently spent some time on the Bloomberg database going over the latest figures. You had to have more companies and more sector diversification than before. Country diversification was not working so well because markets got infected together at the same time. Times were changing.

She went outside to talk to the receptionist. Her old boy-friend was coming in with his wife to talk about their portfolio. She wanted the room to be tidy and the coffee fresh. Julia, their blond twenty year old had bought three pink and green Danish sandwiches – crisp dried onions were sprinkled on top of freshly cut cold beef and lettuce.

“Pekka so nice to see you and you must be Laura. Welcome to Lundgren’s – I hope you have time for a sandwich. We can go over your portfolio while we eat.”

Pekka had not expected sandwiches. He felt a rush of salvia in his mouth as he entered the meeting room. He had to skip lunch because Laura was dieting and he was in a hurry to get back to the office.”

Veronica made notes of their salaries, their bank account and other holdings. Both were earning over €8,000 each month. There was no debt and a big flat in Lauttasaari.

She held her breath. This would earn her €30,000 in a flat commission if she sold them the Russia fund, but a lot less if they opted for the index funds.

“Have you got any preferences about equity funds? I don’t see any reason for holding a bond fund now. I am convinced that interest rates will go up. You have large cash reserves and a steady cash flow from your jobs. No children to worry about and…”

Pekka could not hold still, he wanted to impress her. “Well, we thought that a diversified holding of Russia and Eastern European funds would do the trick. We want to be fully invested right away.”

He smiled at her and she froze. This could be the best catch for the next six months. She turned to Laura who was looking very up tight. Laura the lawyer was obviously not in full agreement.

“A wise choice, Pekka, and I can well understand your approach. I expect that you know that it is a very risky area. When markets move like this there is always a big risk that the next big move will be down. And when they go down the buyers disappear and prices will sink lower than they should. They are not very liquid markets.”

“Why don’t you put a part in the Eastern European market now and the rest in a diversified global index fund? Come back in a few months’ time and see what the markets are doing. There is no need to rush things.”

“That’s a good idea Veronica – let’s do that Pekka. We have twenty five years before we retire and Putin and the rest of the world can still manage a fight or two before then.”

Veronica smiled at Pekka and he blushed. She had a very nice figure and very blue eyes. He was trapped.

“Give us the papers and I’ll make the payments today.”

Veronica had the papers ready and passed them to Pekka. Laura reached over and read them through.

“I’ll handle the payments Pekka – you are in a hurry to get back to the office. Thank you Veronica.”

The two women shook hands. Both had secured a victory.