CHICAGO. This is the second day of luminous white air. It has a sea air scent. I make the short walk from the Chicago Sheraton to the Gleacher Center at the University of Chicago, thinking about how odd it is. Soon I'll be listening to Janet Briaud, a financial planner from entirely land-locked College Station Texas. She will introduce a Canadian oil and gas trust analyst and talk about her experience with oil and gas investments for her clients.

The Wealth Management Symposium I am attending, which I regard as a delicious little secret, is the brainchild of Mark Hurley, prime mover at Undiscovered Managers.   His boutique mutual fund firm is headquartered in Dallas but convenes a group of about 75 advisers here in Chicago once a year. The advisors listen to some of the best and brightest of asset managers and researchers.

For me, the advisors themselves are worth the trip. Many--- like Ms. Briaud--- appear on one or another list of the top financial planners in the country. They are smart, careful, thoughtful, and rigorous. They carry an unusual balance of intellect, personal sensitivity, and pragmatism.

And like the rest of us, they are perplexed.

After years--- no, decades--- of comfort with stocks, bonds, and cash, the Ibbotson-As-Usual-Future doesn't look so reliable. The 10 or 11 percent long-term average return of common stocks is under attack. The 3 percent real return of bonds is glaringly absent. Cash is paying like it lived in Japan. For the last 20 years the advisors have been able to cite the Ibbotson averages with great comfort. They knew they were conservative when measured against the greatest bull market in stocks and bonds in American history.

Now, even if the comfortable world of Ibbitsonian returns is eventually restored, the advisors are wondering how to get their clients through the current period.

The speakers provide little encouragement.

Jeremy Grantham, who Mr. Hurley refers to as a "rock star among money managers," is a well-known bear. He's also co-founder of Grantham, Mayo, Van Otterloo & Co. in Boston. He keynotes with reasons large cap domestic stocks are likely to fall by half as valuation overshoots "regression to the mean." Worse, stocks will fall without the offset of a rising bond market, since bond yields are bottoming.

John Brynjolfsson, who manages about $17 billion for PIMCO, diagrams a long and uncomfortable cycle of falling stock and bond prices. His bet is on TIPS--- Treasury Inflation Protected Securities. But his expectations for everything are modest against the Ibbotsonian ruler.

Doug Noland, the Financial Markets Strategist for David Tice and Associates in Dallas, regales the group with the disconnection between institutions and risk, the related ballooning of credit, and the inevitable crash that will follow.

Susan Wachter, a Professor of Real Estate at the Wharton School, reassures that there is no broad "bubble" in residential real estate. Home prices, when adjusted for increased home size, have simply risen with incomes except for a few major urban areas. The bubble-priced cities include Boise, Boston, Denver, Fort Lauderdale, Miami, New York, San Diego, San Francisco, Tacoma, and Washington DC. This is a bit like predicting that 10 major cities will be destroyed in terrorist attacks but the Citibank credit card processing center in North Dakota will remain untouched.

The advisors are not reassured.

Many of the advisors have already invested in inflation-protected securities. They have been well rewarded. PIMCO Real Return Fund Institutional shares, for instance, have provided an annualized return of 13.95 percent in the three years ending in mid-June, scoring in the top 1 percent of intermediate term bond funds. The advisors will probably invest more. Unhedged foreign bond funds will receive attention. So will foreign equity funds.

But it's not enough.

The search goes on. Ms. Briaud tells the group that her clients like the oil and gas investments she has made. They like the monthly cash returns, they like the removal from daily price changes, they like the idea that the returns come from real stuff.

The only problem, she says, is that it's very difficult to make private oil and gas investments. The search for alternative investments, for a broader mix, is just starting.

Is there a simple answer to all this discomfort?


Related Websites:

To read Jeremy Grantham's investment comments

To read Bill Gross's observations at PIMCO

To read Doug Noland's "Credit Bubble Bulletin"

To read research by Undiscovered Managers