More on Related Themes
2016-05-03 00:00:00 Active Managers Can’t Jump by Brian Massey of Mar Vista Investment Partners
In streetball parlance, active managers have thrown up enough bricks to host a masons’ convention. Marking the worst relative quarter since 1998, less than one-in-five large cap managers, and only 6% of large cap growth managers, outperformed the S&P 500® Index in the first quarter of 2016. We don’t put much weight on just three months of performance data but, despite what Mark Twain writes, statistics don’t lie: fewer than one-quarter of managers outperform their benchmarks over the long-term. With such disappointing outcomes, the economic value of our profession will remain in question and cheap beta will look relatively attractive.
2016-04-07 00:00:00 Harnessing Value in Dislocated Credit by Sai Devabhaktuni of PIMCO
Market volatility, diminishing liquidity and credit imbalances combine to create mispricings and attractive opportunities in leveraged finance.
2016-03-27 00:00:00 25 Years of Investing in Asia by Robert Horrocks, Sharat Shroff of Matthews Asia
Matthews Asia has reached a milestone in its history—25 years of investing in Asia. What have been the biggest challenges? What lessons have been learned? This month’s Asia Insight features Robert Horrocks, PhD, and Sharat Shroff, CFA, who share their thoughts on the investing disciplines they have formed in the two decades since Asia has evolved from “interesting but obscure” to a frontline asset class.
2016-03-21 00:00:00 Ian McAvity by Jeffrey Saut of Raymond James
“When times get tough, economic nationalism and protectionism tends to rise because it is always easier to blame someone else for self-inflicted problems.”. . . Ian McAvity
2016-03-01 00:00:00 Does GMO Add Value for Investors? by Larry Swedroe (Article)
GMO is one of the most highly regarded fund families in the world, and investors have entrusted them with over $100 billion in assets. But is there any statistical evidence that the firm has been able to add significant value versus a passive index fund?
2016-02-01 00:00:00 What Would Minsky Do Now? by Laurence B. Siegel (Article)
In the two decades since his death, Hyman Minsky’s stature has grown enormously. He foresaw the great financial crisis of 2007-2009, and economists routinely refer to “Minsky moments” as the tipping point when seemingly stable financial markets collapse with catastrophic consequences. It’s instructive to speculate on how Minsky would view our post-crisis economic recovery, and a new book allows us to do just that.
2016-01-22 00:00:00 Market Macro Myths: Debts, Deficits, and Delusions by James Montier of GMO
In the context of the role that debts and deficits play in overall economic policy, in this paper I focus on the philosophy known as “sound finance,” which includes adherents who believe that governments should seek to balance their budgets. I, however, take a different view, and believe that the role of government when dealing with budget deficits should be one of “functional finance,” which ensures that the policies implemented help to reach the overarching goals of macroeconomic policy (generally held to be full employment and price stability).
2016-01-21 00:00:00 Colombia Shifts to Keep Its Balance Amid Slide in Oil Prices by Pablo Echavarria of Thornburg Investment Management
Accepting short-term fiscal and foreign exchange pain for long-term macroeconomic gains, which may compound with infrastructure investment and possibly peace dividends.
2016-01-19 00:00:00 Newsletter - Volume 9, No. 1 - January 2016 by Harold Evensky of Evensky & Katz / Foldes Financial Wealth Management
A belated Happy and Healthy New Year! Now for this NewsLetter’s musings…
2016-01-16 00:00:00 On the Couch by Howard Marks of Oaktree Capital Management
I woke up early on Saturday, December 12 – the morning after a day of significant declines in stocks, credit and crude oil – with enough thoughts going through my mind to keep me from going back to sleep. Thus I moved to my desk to start a memo that would pull them together. I knew it might be a long time between inception and eventual issuance, since every time I dealt with one thought, two more popped into my head. In the end, it took a month to get it done.
2016-01-08 00:00:00 Forecasting Returns: Simple Is Not Simplistic by Jim Masturzo of Research Affiliates
The value of a forecasting model is that it improves on the alternative models available and classifies the forecaster’s knowledge of asset classes into an economically intuitive framework for building portfolios. A yield-based model is simple, but it checks both boxes.
2015-12-30 00:00:00 The Next Generation in Philanthropy: The Rockefeller Foundation to the Zuckerberg Chan Initiative by Robert J. Holton of Cleary Gull
This recent announcement, from a modern technological billionaire using the latest technology to shake up the philanthropic world, echoes the thoughts and actions of another notable American, John D. Rockefeller. Adjusting for inflation, John D. Rockefeller may have been the wealthiest American to have ever lived, holding assets estimated at $253 billion in today’s dollars[i]. The Rockefeller Foundation today is worth a far more modest $4 billion, but has been setting a standard for philanthropy for the past 100 years.
2015-12-24 00:00:00 From Congress: An Early Christmas Present for the Charitably Inclined by Tara Thompson Popernik of AllianceBernstein
Christmas came early for US taxpayers when Congress passed the Protecting Americans from Tax Hikes (PATH) Act of 2015 on December 18. The Act extended several expired tax provisions, some permanently, including qualified charitable IRA distributions. But other giving strategies may make some philanthropic taxpayers even merrier come tax time.
2015-12-11 00:00:00 George Friedman’s World of Geopolitics by John Mauldin of Mauldin Economics
In today’s letter, I have transcribed a conversation George Friedman and I had a few days ago. In it, we talk about how our new joint effort came about and why George has left Stratfor to create his new firm, Geopolitical Futures.
2015-12-10 00:00:00 GMO Quarterly Letter by Ben Inker, Jeremy Grantham of GMO
In a new quarterly letter to GMO's institutional clients, co-head of asset allocation Ben Inker examines whether emerging-market equities might be a "value trap," and if U.S. equities are "deserving of trading at a premium P/E to the rest of the world" ("Just How Bad Is Emerging, and How Good Is the U.S.?"). In part two of the letter, chief investment strategist Jeremy Grantham provides "a list of propositions that are widely accepted by an educated business audience ... but totally wrong. ...
2015-11-25 00:00:00 To Be Continued … the Fed Drama and Its Implications by David Robertson of Arete Asset Management
The Fed has strung investors along for quite a while in anticipation of the first rate increase in nearly a decade. What would happen if low rates were to become a permanent fixture of the investment landscape?
2015-11-17 00:00:00 Sustaining a Foundation, Stepping Up as Fiduciaries by Seth Masters of AllianceBernstein
Establishing a foundation can be a great way to pursue charitable objectives, but it often brings a host of fiduciary responsibilities that donors may feel ill-equipped to handle. In this hypothetical case study, a couple of entrepreneurs sought our advice on asset allocation.
2015-11-09 00:00:00 Psychological Whiplash by John Hussman of Hussman Funds
Investors have experienced a great deal of whiplash in recent months. After a rapid but relatively contained retreat in August and September, the stock market has rebounded to within 2% of its May record high. Only weeks ago, investors were concerned about economic deterioration. As of Friday, strength in nonfarm payrolls has suddenly convinced investors that a December rate hike by the Fed is all but certain.
2015-10-23 00:00:00 A Bond-Free Portfolio: Why Cash Should Replace Bonds to Reduce Risk and Improve Returns by Kendall Anderson of Anderson Griggs
In a recent interview, Howard Marks, the great investor and co-chairman of Oaktree Capital, quoted the original Dr. Doom, Henry Kaufman, who once said “There are two kinds of people who lose money: those who know nothing and those who know everything.” Those of us who are selling investment services, whether portfolio management or investment products, have a tremendous ability to locate or create research that rationalizes our approach to building and maintaining a portfolio.
2015-10-17 00:00:00 Weekly Economic Commentary by Carl Tannenbaum, Asha Bangalore of Northern Trust
Wealth Has Different Effects in Different Places; Our Good Fortune with Health Care Costs May Soon End; The Nobel Prize Rewards Digging into the Details
2015-10-08 00:00:00 Rainmakers by Rick Lear of Lear Investment Management
The onslaught of financial events in the past several months created massive confusion and uncertainty in the global financial markets. Much of the confusion revolves around economic factors - interest rates, currency, energy prices and growth policy. Several economic factors are influenced by policy makers and central banks. Our goal this month is to slice through the confusion and find direction for the remaining months of 2015.
2015-09-21 00:00:00 How to Generate Alpha without Selecting Superior Funds by Bob Veres (Article)
In Part I of my series on active investment management, I described two types of research that attempted to help advisors uncover above-average talent: identifying conditions where you are more likely to find outperformers, and better ways to identify above-average managers. As it turns out, there’s a third possibility. Instead of identifying superior funds, you identify superior combinations of funds – which, of course, includes a fund-selection process, but then takes it one step further.
2015-09-14 00:00:00 Investing for Income: Meeting the Challenges of a Low Yield Environment by Paul Reisz, Tina Adatia, Tanya Sanwal of PIMCO
For many investors, generating a high and sustainable income stream is challenging in the current secular landscape, which PIMCO calls The New Neutral. Over the next three to five years, we expect to see global economies converging to modest trend growth rates as central banks are constrained to set policy rates at levels well below those that prevailed before the financial crisis.
2015-09-08 00:00:00 Curb Your Mind by Rick Lear of Lear Investment Management
With the recent events in China and Greece causing volatility in the global markets, we think it is more important than ever to take a moment to reflect on how capital markets function. People trade stocks; and an understanding of the human thought processes is at the foundation of markets. The recent gyration of the world’s markets reminds us how quickly greed can turn to fear and how investors can begin to make mistakes. We find that heightened emotions often lead to mistakes that can be easily avoided.
2015-09-02 00:00:00 Is "New Normal" Enough to Grow China's Economy? by Jerry Zhang of Wells Fargo Asset Management
Jerry Zhang, Ph.D., CFA, explores the economic underpinnings that can spark growth in China—and, in turn, present investing opportunities for growth seekers.
2015-08-26 00:00:00 As Market Fears Grow, Stay Focused on the Long Term by Brad McMillan of Commonwealth Financial Network
One bad day doesn’t make a bear market. Two bad days, however, and the prospect of more to come, may well signal one.
2015-08-21 00:00:00 Was the Euro a Good Idea? by Carl Tannenbaum of Northern Trust
The creation of the euro was done for political reasons; as long as it is politically less costly for its members than the alternatives, the euro is here to stay.
2015-08-21 00:00:00 Schwab’s Perspective on Recent Market Volatility by Team of Charles Schwab
Global financial markets endured their worst week of the year this past week amid concerns over slowing economic growth and currency woes in China and other emerging markets, among other reasons. At times like these it is easy to start thinking short term, but keep in mind that the foundations of investing success are well established (have a plan, keep a close eye on expenses, stay diversified, and make sure your portfolio composition is lined up with your tolerance for risk and the timetable for when you’ll need to start drawing down the portfolio).
2015-08-14 00:00:00 Investing with the Slowskys: Appreciating the Value of Expertise, Analysis, and Judgment by David Robertson of Arete Asset Management
News bits and data items with obvious implications are ever present but get discounted by the market very quickly. Only deeper, “slow traveling ideas” provide long term investors with a chance of realizing superior results.
2015-08-13 00:00:00 Exit from Wonderland: Change Is Now on the Horizon by Ed Easterling of Crestmont Research
Many investors and advisors are unsure about the current financial market environment. They have been wrestling with how to weight equities and whether to include alternative investments. Although equities have performed well in recent years, many alternatives have lagged expectations. This should not be surprising: the financial world is operating just as the Fed has intended.
2015-08-11 00:00:00 The Hidden Cost of Ignoring Evidence by Dan Solin (Article)
An advisor recently told me that he lost a large client to another firm. This advisor said he had carefully explained the benefits of evidence-based investing to the prospect and thought he had made a convincing case. The losing advisor was distraught and confused. He wanted to know if I could help him understand how the prospect could make such an “irrational” decision.
2015-07-16 00:00:00 Market Overview Q215 by David Robertson of Arete Asset Management
Massive interventions by central banks over the last several years have created a “game of Chicken” that has fundamentally changed investing into an exercise that more closely resembles gambling. Until the game resolves investors will do well to recognize this “game” as largely unwinnable and await better opportunities later.
2015-06-29 00:00:00 Floating-Rate Loan Investors: Clairvoyant or Missing Out? by Scott Page, Craig Russ, Christopher Remington of Eaton Vance
In a rising rate environment, we put floating-rate loans high on the list of fixed-income investment classes likely to perform well in 2015.
2015-06-24 00:00:00 Handicapping Bubbles and Shocks by Kristina Hooper of Allianz Global Investors
Kristina Hooper, US Investment Strategist for Allianz Global Investors, explains the results of the 2015 Allianz Global Investors RiskMonitor Survey, a global study of prevailing views on portfolio construction, asset allocation and risk among a cross-section of institutional investors.
2015-06-16 00:00:00 How to Use Color to Make an Impact by Daniel Solin (Article)
Most firms have marketing materials available on their websites and in hard copy. And every advisor communicates with clients via email and through periodic performance reports. I have yet, however, to meet an advisor who pays the same attention to these materials as they do to their clothes or the way their office is appointed.
2015-06-11 00:00:00 The Knowledge Effect: Excess Returns of Highly Innovative Companies by Steven Vannelli, Eric Bush of GaveKal Capital
What drives stock returns? Answering this question has been a goal of investors ever since Harry Markowitz introduced his Modern Portfolio Theory in the 1950s. Later, William Sharpe’s Capital Asset Pricing Model illustrated that the market itself is the first and foremost element in explaining a stock’s performance. However, empirical research over the past several decades has identified many other effects beyond simply the market that exhibit a strong explanatory power of stock returns.
2015-05-20 00:00:00 The Idolatry of Interest Rates Part I: Chasing Will-o’-the-Wisp by James Montier of GMO
First is the idolatry of the “equilibrium/natural/neutral” rate of interest displayed by central bankers around the world. The second idolatry is the modern-day belief in the world’s greatest con: that monetary policy matters.
2015-05-19 00:00:00 Do Goldman Sachs' Funds Add Value for Investors? by Larry Swedroe (Article)
Over the last few years, an expanding line of mutual funds created by commercial banks such as Goldman Sachs and JPMorgan Chase have been drawing billions of dollars from investors looking to earn a good return. While the fees these funds have generated are among the few consistent bright spots of growth on Wall Street, the question for investors is whether or not the active mutual funds managed by these banks actually have been good investment choices.
2015-05-12 00:00:00 The Future of Investing ESG Portfolios: Changing Beliefs, Perceptions and Goals by Sponsored Content by ClearBridge Investments (Article)
Investing consistent with environmental, social and governance (ESG) principles can no longer be dismissed as a short-term fad. Assets under management are growing steadily, accompanied by a rise in the number and type of investment options across asset classes. Clearbridge's research explores how institutions are investing with impact today.
2015-04-30 00:00:00 The Ideology of IS by Bill O’Grady of Confluence Investment Management
Atlantic Magazine recently published an article about Islamic State (IS) that examined its theology and ideology. This article along with a paper from the Brookings Institute form the basis of our report. In our report this week, we examine the intellectual foundations of IS, showing how it evolved from two different sources of thought. We follow with an analysis of the concept of the Caliphate and the critical importance it has in Islamic theology, along with an examination of the eschatology of IS. We discuss the consequences of IS’s ideology and conclude with potential market ramification
2015-03-28 00:00:00 Living in a Free-Lunch World by John Mauldin of Mauldin Economics
I believe the fundamental imbalances we are seeing in the world (highlighted in the two papers mentioned above) are the result of the massive increases in global debt and misunderstandings about the use and consequences of debt. Too much of the wrong kind of debt is going to be the central cause of the next investment crisis.
2015-01-30 00:00:00 Finding Tax-Free Transfer Opportunities in Undervalued Energy Stocks by Carin Pai, Elisa Shevlin Rizzo of Fiduciary Trust Company International
In the past few weeks, crude oil has extended its biggest price slump since the 2007-2009 global financial crisis, dropping to the lowest levels since 2009 amid signs of softer demand growth from major economies, strong output from the US and steady output from the rest of the world.
2014-12-22 00:00:00 This Deal Wont Last: Give to Charity Now! by Tara Thompson Popernik of AllianceBernstein
Philanthropic US taxpayers should greet the Tax Increase Prevention Act of 2014 with holiday cheer. The law extends several expired tax provisions for 2014 onlyincluding qualified charitable IRA distributions. But other giving strategies may make some taxpayers merrier come tax time.
2014-12-17 00:00:00 Where Did The New Middle Class Citizens Go? by William Smead of Smead Capital Management
The "well known fact" with regards to oil over the last decade read like this: because of huge GDP growth in emerging markets like China, there were going to be 400 million new middle class citizens born of uninterrupted prosperity; they were going to want all the autos, consumer goods, $10,000 watches and food that Americans have.
2014-11-18 00:00:00 Is This Purgatory, Or Is It Hell? by Ben Inker of GMO
GMO is often accused of being a glass half empty investor, and I admit that in a year that has seen the S&P 500 rise 8.3%, MSCI All-Country World rise 3.7%, and the Barclays U.S. Aggregate rise 4.1% through the third quarter, the words Purgatory and Hell are unlikely to come to mind to most investors when opening their brokerage statements. It has been a dull year, perhaps, but certainly not a hellish one. So what is bringing Danteesque visions of damnation into our slightly warped minds?
2014-10-30 00:00:00 Got Loans? by Mark R. Kiesel, Elizabeth (Beth) MacLean, Rudy Pimentel of PIMCO
?We believe select investors looking to reposition portfolios may benefit from a move to senior secured floating rate loans. CLOs have been an important source of demand in the market, and even with more strict risk retention rules just announced under Dodd Frank, we think demand will remain strong. While the Fed has criticized some banks for not following their leveraged lending guidelines, Fed members themselves, in our view, do not appear concerned about loans having a major impact on financial stability.
2014-10-28 00:00:00 The Individual Investor's Edge by Patrick O'Shaughnessy (Article)
Even if the sophistication of professional managers makes it seem as though individual investors do not have an edge, they do. Without a job to worry about, individual investors can tolerate short-term underperformance on the path to long-term outperformance.
2014-10-14 00:00:00 You Ain't Seen Nothin Yet by William Smead of Smead Capital Management
Someone recently asked a group of us which band we saw at our first rock concert. My answer was the Canadian band, The Guess Who, in 1975. With hits like No Time, Undun and These Eyes, The Guess Who hit the perfect balance between my 17-year old testosterone driven aggressiveness and my urge to romance the woman of my dreams. The key members of the band in the 1960s and 1970s were Burton Cummings and Randy Bachman.
2014-08-06 00:00:00 Global Dividend Insights by Nathan Fischer, Louie Nguyen of Soledad Investment Management
For many foundations and individual investors, the usefulness of a portfolio lies in its ability to provide cash flow to support charitable activities or to cover living expenses. Like a wise orchard farmer, investors are looking to harvest apples from the branches without damaging the orchard. This article will explore how dividend is the key to managing wealth in terms of sustainable spending and how global dividend paying stocks, in particular, are a great equity investment for a sustainable spending strategy.
2014-08-05 00:00:00 The Wealth-Builder Model by C. Thomas Howard, PhD (Article)
While the math of compounding is straightforward, building wealth is difficult. But if you use an approach based on the principles outlined in this article, the accumulation of real wealth is within reach.
2014-07-25 00:00:00 Market Valuations and the Theory of Relativity by Zachary Karabell of Envestnet
Depending on what metric you use to assess the stock market, equities could be cheap, expensive, or anywhere in between. Try not to be swayed by simplistic arguments based on selective analysis of historical valuations, patterns or averages. Advisors and investors should keep in mind that with so few opportunities today to find yield and appreciation, if long-term gains are to be had, stocks are where such gains are likely to be found.
2014-07-24 00:00:00 Mar Vista Investment Partners Second Quarter 2014 Review by Brian Massey of Mar Vista Investment Partners
Mar Vista Investment Partners second quarter commentary reviews the market and their large cap growth strategies during the most recent period and discusses the opportunities they see for their portfolios in the coming months.
2014-07-08 00:00:00 Slow but Steady Growth by Richard Michaud of New Frontier Advisors
In the second quarter of 2014 major asset class performance was positive. The Dow was up 2.4%, the S&P up 4.7%, and the NASDAQ up 5%. International equities nearly kept pace with US equities; the MSCI ACWI ex US was up 3.8%.
2014-07-05 00:00:00 Central Bank Smackdown by John Mauldin of Mauldin Economics
And so it is that on a beautiful July 4 weekend we will amuse ourselves by contemplating the serious smackdown that central bankers are visiting upon each other. If the ramifications of their antics were not so serious, they would actually be quite amusing. This weeks shorter than usual letter will explore the implications of the contretemps among the worlds central bankers and take a little dive into yesterdays generally positive employment report.
2014-05-27 00:00:00 Six Principles for Smart Tax Management by Tara Thompson Popernik of AllianceBernstein
It is well known that taxes began to take a bigger bite out of income for the well-off in 2013. Top marginal tax rates rose, and some exemptions and deductions were phased out. What is less well known is that investors spending from their portfolioseven those investors whose tax rates didnt risemay be facing higher tax bills, too.
2014-04-29 00:00:00 Putin's Ideologist by Bill O'Grady of Confluence Investment Management
For the past few months, Western leaders have been baffled by Russia?s behavior toward Ukraine and, to a lesser extent, Eastern Europe. To better understand Russia?s actions, we will examine the ideology of Aleksandr Dugin, the man who created the ideology that appears to be behind Putin?s behavior. We will offer a short biography of Dugin, focusing on his intellectual roots and the creation of the Eurasian Concept. Using Dugin?s framework, we will examine Putin?s recent behavior. As usual, we will conclude with market ramifications.
2014-04-23 00:00:00 Trading Secrets: Understanding the Boom and the Bust by Tad Rivelle of TCW Asset Management
It isn?t what you earn ? it is what you keep that matters in investing. While systematically underwriting too little risk may mean that you do not earn all that you might, underwriting too much towards the end of a business cycle can be disastrous. With this in mind, it becomes obvious that timing an investment strategy may be the most important single decision an investor needs to get right. But how is one to know where you are in the cycle?
2014-04-22 00:00:00 Hope Is Not A Strategy by Steven Rubenstein of Arrow Partners
With almost 20 years in the third party marketing (3PM) business, we thought we had seen and experienced it all.
2014-03-25 00:00:00 Why I Sold - Part 4 by Jim Whiddon (Article)
The months I spent considering whether to sell my successful independent RIA were difficult personally and professionally. But once my decision was made, it felt good to focus on the positive aspects of a merger that would benefit my staff and my clients.
2014-03-22 00:00:00 China's Minsky Moment? by John Mauldin of Millennium Wave Advisors
In speeches and presentations since the end of last year, I have been saying that I think the biggest macro problem in the world today is China. China has run up a huge debt, and the payments are coming due. They seem to be proactive, but will it be enough? How much risk do they pose for the global system?
2014-03-21 00:00:00 China's Evolving Health Care Landscape by Hayley Chan of Matthews Asia
China has begun a long-term transformation of its health care industry. Much of this industry is still fragmented and in the early stages of consolidation. China?s top 10 pharmaceutical companies, for example, account for a combined market share of approximately 20% versus more than 60% in the U.S.
2014-02-11 00:00:00 Focus on Income: The Illiquidity Premium: Opportunities for Investing in Credit Today by Jack Rivkin of Altegris
At a time when many investors are seeking income for their portfolios, traditional sources of fixed income - principally government bonds and high-grade corporate bonds - look less than compelling. Yields are low and there is an increasing risk that interest rates will rise, which would cause the value of existing bonds to fall.
2014-01-31 00:00:00 Weekly Economic Commentary by Carl Tannenbaum of Northern Trust
Chinas shadow banking products are coming under the spotlight. Emerging markets: Be sure to differentiate. The fixed income sectors surprising strength.
2013-12-31 00:00:00 The Ten Best Articles You Probably Missed by Robert Huebscher (Article)
Great articles don’t always get the readership they deserve. We’ve posted the 10 most-widely read articles for the past year. Below are another 10 that you might have missed, but I believe merit reading.
2013-12-13 00:00:00 Saying Goodbye to a Great Peacemaker by Frank Holmes of U.S. Global Investors
Last week, the world lost a hero. There are so few people in this world who have fought for freedom in such a benevolent way as Nelson Mandela.
2013-12-06 00:00:00 Did the Government Shutdown Help the Economy? by Frank Holmes of U.S. Global Investors
Take the government shutdown in October, when the House and Senate fought over the debt ceiling. Economic data wasn?t released, services were halted, national parks were closed, and "non-essential government workers were told to stay home. As a result, GDP was expected to collapse. Yet, data released this week reveal a different, stronger image of the U.S. economy. I think Shakespeare would deem the media?s fear mongering tactics as Much Ado About Nothing.
2013-11-19 00:00:00 Levitate: Dismiss Bubble Talk for Now by Liz Ann Sonders of Charles Schwab
Its premature to be calling this market a bubble. Rolling 10 year returns havent even reached a long-term mean. Valuation still well below prior bull market peaks.
2013-11-18 00:00:00 Doing Well by Doing Good by Tara Thompson Popernik, Paul Robertson of AllianceBernstein
Charitable giving remains one of the few ways that US taxpayers can avoid taxes outright. If youre philanthropically inclined, giving can be a win-win that benefits you and society at the same time.
2013-10-24 00:00:00 Glory Days: Could They Come Back for US Equities? by Liz Ann Sonders of Charles Schwab
A "great rotation" may not be underway by individual investors; even amid record-breaking outflows from bond funds this summer. But fund flow data do show some shift in preferences and highlight the sensitivity of investors to any rise in longer-term interest rates. A more interesting place to look is at the fiduciary community; that has decidedly shifted its attention away from traditional equities (and fixed income) over the past decade.
2013-10-18 00:00:00 Weekly Economic Commentary by Christopher Molumphy of Northern Trust
Closing the books on the U.S. budget... for now; Do we need a debt ceiling?; Study of financial market function earns the Nobel Prize.
2013-10-14 00:00:00 What Uncle Sam Taketh Away, You Can Give Back (and Get a Tax Deduction) by Kathleen Fisher, Tara Thompson Popernik of AllianceBernstein
The government shutdown, now in its second week, has temporarily stopped the flow of government funding for many worthy organizations and may strain the resources of others. Federal grant administration is being delayed. For example, the grant administration staff at the National Institutes of Health has been furloughed; that may stop or slow grants for medical research.
2013-10-09 00:00:00 Getting Serious About Investing Responsibly by Luke Spajic, Josh Olazabal of PIMCO
To date, much of ESG-related investing has focused on negative screening, but we believe there is a better approach. This approach rests on three pillars: identifying and analyzing key ESG issues facing a given investment sector, engaging with the issuers of securities, and supporting the development of markets for ESG investments.
2013-10-08 00:00:00 The Futility of the Endowment Model by Robert Huebscher (Article)
In the past two decades, the so-called endowment model has been adopted by hundreds of endowments, foundations and advisors ? particularly those serving ultra-high-net-worth clients. By aggressively allocating to illiquid alternative asset classes, those investors hoped to duplicate the results of Yale and other top-tier institutions. New research exposes the futility of those efforts.
2013-09-27 00:00:00 The Weekly Speculator by Michael Shaoul, Ranita Ragunathan, Timothy Brackett, Brendan Moynihan of Marketfield Asset Management
We wrote last week on the eve of the FOMC meeting which resulted in the surprising decision not to reduce the current program of treasury and mortgage security purchases. What was to our eyes equally surprising was the volume and strident tone of the commentary that was issued following this release, ranging from the arrogant to the outraged as if anything really meaningful had changed.
2013-09-25 00:00:00 How To Calculate The Intrinsic Value Of Your Common Stocks: Part 1 by Chuck Carnevale of F.A.S.T. Graphs
Every investor in common stocks is faced with the challenge of knowing when to buy, sell or hold. Additionally, this challenge will be approached differently by the true investor than it would by a speculator. But since I know very little about speculation (trading or market timing), this article will be focused on assisting true investors desirous of a sound and reliable method that they can trust and implement when attempting to make these important buy, sell or hold investing decisions.
2013-09-23 00:00:00 Enhanced Dividend for Income by Jim O'Shaugnessy of O'Shaughnessy Asset Management
It is axiomatic in the financial planning canon that investors searching for a steady source of income should rely heavily on bonds. Stocks are for capital appreciation and bonds for income. The practice is so ingrained, that I have not heard of many investors who would make the case for using an equity portfolio to generate income. Bonds also appeal to advisors because of their inherent principal protection advantage. As a bond owner, you are a creditor, not an owner.
2013-09-17 00:00:00 The Debate on DFAs Research by Various (Article)
We received many responses to Michael Edesess article, Why DFAs New Research is Flawed, which appeared last week. We provide the responses from individuals who disagreed with Edesess findings, followed by Edesess response and then by responses in agreement with his findings.
2013-09-16 00:00:00 Investment Reality as Told Through the Most Interesting Man in Baseball by Rob Isbitts of Sungarden Investment Research
You probably havent heard of Greg Dobbs. If you have, you are either a big Major League baseball fan, a casual fan of the Miami Marlins baseball team, or you know Greg Dobbs personally. He is a solid Major League player, but will not be mentioned alongside Ruth, Mays and Ripken. He is a great team player, a great media interview and was briefly featured on a national TV program last year as the most interesting man in baseball, a moniker given to him by one of his teammates.
2013-07-23 00:00:00 You Thought It Was Hot Outside... by Blaine Rollins of 361 Capital
You thought it was hot outside? Wait until you see the weekly cash inflows into U.S. Equities... Funds that hold only U.S. stocks gained $15.58 billion in new cash, the most since June 2008. ETFs that hold domestic equities attracted $12.45 billion of those gains.
2013-07-23 00:00:00 Risk Communicates Signals that Something Important is at Stake by Robert Mark of Castle Investment Management
The equity markets hit new all-time highs again this past quarter. However, we believe this rally is largely due to Ben Bernanke?s policy of Quantitative Easing (QE) which presently equates to the purchase of $85 billion in U.S. government debt every month. Through the Federal Reserve?s policies our government has effectively printed trillions of dollars since the financial crisis began, arguably inflating a host of asset prices including the stock market.
2013-07-17 00:00:00 Men of Steel: How Retail Investors Saved the Muni Market by John Bagley of BondDesk Trading
It looked and felt to screen watchers late last month like the sequel to Man of Steel had arrived prematurely. This time, though, General Zod seemed to set his sights on the bond market, recruiting an army of bond fund managers to annihilate everything from 1-year Treasuries to 30-year corporate and municipal bonds. Over the three trading days following the June Fed meeting, yields on benchmark municipal bonds increased by 60 basis points, the largest move over a 3-day period in more than 25 years.
2013-07-16 00:00:00 Hedge Funds Can Advertise...But Should They? by Chris Maxey, Ryan Davis of Fortigent
In April 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law. The legislation eased a number of regulatory burdens on small businesses and private industry in a bid to boost job growth. The bill made additional headlines for lifting an 80-year ban on solicitation for private placements, the restriction that prevented hedge funds from advertising their wares to the general public.
2013-07-16 00:00:00 Don't Be Deceived by the Deficit Dip by Milton Ezrati of Lord Abbett
Recent budget reports have been encouraging. Revenues are rising faster than originally expected, and deficits are running lower. Some of this improvement is real, but, sadly, not all of it.
2013-07-10 00:00:00 Market Perspectives Q2 2013: Fed Fears by Richard Michaud of New Frontier Advisors
Investors have been hypersensitive to the inevitable reversal of the Federal Reserves bond purchasing economic stimulus program known as QE3. Signs of sustainable economic recovery have been closely monitored as a harbinger of a likely end of the program.
2013-07-01 00:00:00 Watching Nominal GDP by Brian Wesbury, Bob Stein of First Trust Advisors
One of the most important foundations of modern macroeconomics is something called the equation of exchange. It dates all the way back to John Stuart Mill but, in the past couple of generations, was popularized by free-market icon Milton Friedman.
2013-06-07 00:00:00 Portfolio Comfort in Stock Splits by Bill Smead of Smead Capital Management
We have noticed that there has been a dearth of stock splits among the S&P 500 index companies in the last 5 years. Our observation is that the natural habitat for stock splits is normally a multiple-year market upswing and numerous stocks trading over $60 per share. What does the history of stock splits tell us about where we are in the long-term stock market cycle for the S&P 500 index? Who will the marginal buyer of common stocks be in the near term and what do stock splits teach us about who the marginal buyer is?
2013-05-20 00:00:00 Not in Kansas Anymore by John Hussman of Hussman Funds
Knowing where you are doesnt mean that youre leaving, but you should still know where you are.
2013-04-10 00:00:00 Making It Possible for Investors to Be Secure in Their Later Years by Michael Golub of The Golub Group
Stock investing should be viewed as old-age insurance. Stocks are serious business because, for most of us, how we handle them will determine how we will be able to live in our later years. The challenge of living comfortably for the rest of our lives has become more of a challenge as the Prudential Life Insurance Company has recently pointed out that the first human to live to 150 years old is alive today. The Wall Street Journal reported in its March 19, 2013 issue, that many workers are saving too little to retire.
2013-04-02 00:00:00 Cypriots In The Streets by Peter Schiff of Euro Pacific Precious Metals
The news of the month comes from the large Mediterranean island of Cyprus, where Keynesian economic planning left the economy facing complete bankruptcy. The result was an unprecedented step forward in the financial collapse of the West: direct forfeiture of bank deposits. Despite official protestations to the contrary, this fallout will spread to a bank near you.
2013-03-26 00:00:00 Adapting the Yale Model for Clients by C. Thomas Howard, PhD and Lambert Bunker (Article)
The Yale University endowment fund is one of the most successful in the country, with a 10-year return besting the endowment universe average return by 300 basis points and the Wilshire 5000 return by 400 basis points. David Swensen is the architect of this program, and his guiding principles are widely used to manage large endowments. They are equally useful for client portfolios.
2013-03-22 00:00:00 Power of Positive Screening: Pursuing Strength of Social and Financial Returns by Chat Reynders, Patrick McVeigh of Reynders, McVeigh Capital Management
Market volatility and sweeping changes to mainstream views of investing are catalyzing acceptance of tactics that combine fundamentals with a progressive outlook on social issues. Positive screening brings balanced companies to the fore of the investment landscape: this practice isolates sound equities that demonstrate strength of balance sheet, dependability of management, and a commitment to act as part of a global community focused on positive change.
2013-03-13 00:00:00 What's Your Advantage? by Bill Smead of Smead Capital Management
In the March 9, 2013 issue of Barrons, writer Jonathon Laing wrote an excellent piece about Howard Marks. This article provides the base from which we can discuss the main components of investment portfolio composition. These components are information, analysis of information, and decisions made from information and analysis. In doing so, we will bring to light why we believe todays best opportunity is in long-duration common stock investing.
2013-02-26 00:00:00 Global Investment Review First Quarter 2013 by Team of Bedlam Asset Management
At the beginning of last year the prospects for capital markets were grim yet the results surprisingly good: positive returns and modest economic growth. The cause was central banks in developed countries acting as a backstop for sovereign and other large debts, through direct purchasing funded by accelerated money printing. This also ensured low interest rates. Subsequently, mountainous debt problems are slowly being tackled, even as they appear to increase.
2013-02-19 00:00:00 Six Recommendations for Working with Widows by Kathleen M. Rehl, Ph.D., CFP (Article)
Widows are a fast-growing segment of the U.S. population, with almost 12 million women currently widowed and another 800,000 joining their ranks each year. Working with a widow, especially in the early stages of her grief, requires a non-traditional approach to financial advising.
2013-02-15 00:00:00 In Defense of Commodity Futures by Seth Masters, Jon Ruff of AllianceBernstein
Several prominent pension funds have slashed their commodity futures investments for delivering poor returns with higher volatility than usual, while failing to diversify equity exposures as expected, The Wall Street Journal recently reported. If inflation rises, they may regret it.
2013-02-13 00:00:00 Trading Secrets: And All Our Yesterdays by Tad Rivelle of TCW Asset Management
Markets work. Not because they are perfect, but because they self-correct. Inherent to their functioning is the ability for buyers and sellers, borrowers and lenders, to freely express their predilection to engage in commercial transactions as proxied by the price mechanism. This is all utterly basic. So, why are the capital markets in general, and the credit markets in particular, not to be trusted to operate without the price and quantity guidance of the Federal Reserve? I
2013-02-07 00:00:00 Investing in a Low-Growth World by Jeremy Grantham of GMO
This quarter I will review any new data that has come out on the topic of likely lower GDP growth. Then I will consider any investment implications that might come with lower GDP growth: counter intuitively, we find that investment returns are likely to be more or less unchanged a little lower only if lower growth brings with it less instability, hence less risk. Finally I will take a look at the reaction to last quarter's letter, specifically about my outlook for lower GDP growth.
2013-02-07 00:00:00 We Have Met the Enemy, and He Is Us by Ben Inker of GMO
If modern portfolio management has a single defining urge, it is almost certainly diversification. We look for diversifying assets, strategies, and managers. A thoughtful investor can argue against almost any asset class stocks, bonds, hedge funds, private equity, commodities, you name it but arguing against diversification is like arguing against indoor plumbing. I dont want to sound like I'm calling for a return to chamber pots and outhouses, so I'm not actually going to argue against diversification.
2013-02-01 00:00:00 Weekly Economic Commentary by Team of Northern Trust
Is the world engaged in a currency war? Januarys job report had some pleasant surprises, but more progress is needed. Purchasing managers surveys suggest growth in the US, retreat for Europe
2012-12-26 00:00:00 The Ten Key Benefits of Investment Committees by Bob Veres (Article)
In this first part of a two-part report, I'll identify ten core purposes that investment committees serve in different types of firms, ranking them in order of the number of responses I received. If your investment committee is serving all ten purposes, based on the survey, you're among a select minority - which means that many advisors may find new ways to use this versatile new tool in their RIA practices.
2012-11-29 00:00:00 Are E&Fs Jeopardizing Their Missions? by Seth Masters of AllianceBernstein
Many US endowments and foundations (E&Fs) still plan to spend 5% of their assets each year, despite unusually low expected returns. We think few understand how likely it is that this will limit their ability to fulfill their missions in perpetuity.
2012-09-11 00:00:00 Ponzi Games by Michael Lewitt (Article)
Whatever schemes the European Central Bank may cook up over the next few months will only prove short-term liquidity relief to what are long-term insolvency problems. Like any Ponzi scheme, the last money in is going to be hurt the worst when the charade comes to an end. In the meantime, investors proceed at their own risk.
2012-09-04 00:00:00 The Ultimate Income Strategy - Higher Yield and Lower Volatility by Geoff Considine (Article)
Investors, especially those in the de-accumulation phase of their retirement, count on high income and low volatility. Achieving the best possible tradeoff between yield and risk is a major challenge for advisors. Over the last two years, I've shown how to construct a low-risk portfolio - the ultimate income portfolio (UIP) - that yields over 9.0%. Let's look back at how those portfolios performed and the components of this year's UIP.
2012-08-07 00:00:00 Robert Shiller on the Social Benefits of Finance by Laurence B. Siegel (Article)
It's a bad sign for the finance industry that one of its leading minds - the distinguished Yale economist Robert Shiller - has felt compelled to write a book in order to defend the idea that finance itself is a constructive pursuit, worthwhile to modern society. Have things really gotten that bad?
2012-06-12 00:00:00 The End of Economics by Michael Edesess (Article)
If Australian economist Steve Keen's book, Debunking Economics, doesn't end, once and for all, the terminally convoluted discourse that afflicts mainstream economics, nothing will. Although the book's purpose is to show that neoclassical economics is all bunk, however, it is also, remarkably, as good an introduction to neoclassical economics as any you're likely to find.
2012-02-14 00:00:00 The Safety-first, Goals-based Approach to Financial Planning by Wade Pfau (Article)
Little of what is taught in traditional investment textbooks is of value in personal financial planning. Risk is not standard deviation; it is the probability and consequences of not meeting one's goals. That real-world perspective animates a new book by Zvi Bodie and Rachelle Taqqu that implores advisors and their clients to lock in the funding of their essential expenses before worrying about their discretionary goals.
2012-02-06 00:00:00 Wary Investors Give US Stocks Another Go by John Browne of Euro Pacific Capital
Recently, the stock market has been roaring, with the S&P500 up a stunning 22% from October 3, 2011, which was the low of last year. In fact, the first month of 2012 has been one of the best Januaries on record for US stocks. On top of that, last Fridays jobs report seems to provide further evidence that we're turning a corner. However, there are many reasons to question the bestowal of bona-fide bull status on this market. It's hard to miss the artificial props in place to push up prices. Both the supply and demand sides of the equation are standing on shaky foundations.
2011-12-06 00:00:00 Small-Cap ETFs: Tail or Dog? by Mariko Gordon (Article)
Now that ETFs represent anywhere from 30% to 40% of small-cap trading volume, the creature that was created to shadow its master has become bigger than the index itself. Let's look at the impact of this rapid growth and the three important questions it raises.
2011-09-20 00:00:00 The Irrational Optimist by Michael Lewitt (Article)
'Most past bursts of human prosperity have come to naught because they allocated too little money to innovation and too much to asset price inflation or to war, corruption, luxury and theft,' writes Matt Ridley. These words hit the proverbial nail on the head. The misallocation of capital in today's economy is a severe threat to future prosperity and perhaps survival itself.
2011-08-23 00:00:00 Letters to the Editor by Various (Article)
A reader responds to our article, Jeremy Grantham Guarantees Gold will Crash, which appeared on May 18, 2010. Another reader responds to Michael O. Kokesh's Letter to the Editor, published last week, which was in response to Paul Kasriel's July 26 commentary, Washington Had a Spending Problem.
2011-08-09 00:00:00 Does Government Intervention in Financial Markets Slow Economic Growth? by Michael Edesess (Article)
As we saw with the Dodd-Frank legislation and the Consumer Financial Protection Bureau, the question underlying the debate over financial regulation is whether it stifles economic growth. Leo F. Goodstadt's book, Reluctant Regulators, provides useful insights from the experiences of Hong Kong and China. It also causes us to ponder whether our measurement of economic growth is fundamentally flawed.
2011-04-27 00:00:00 Turkey?s Shaky Foundations: Structural Deficit Underpinned by Volatile Capital Inflows by David Rogovic of Roubini Global Economics
In 2009, at the height of the global financial crisis, a reduction in capital inflows and domestic demand caused a narrowing of external imbalances across Europe. Now, as the region returns to growth and recovers from the crisis, Turkey stands out in terms of the size and speed at which its current account deficit is expected to grow. This is due in part to a more rapid recovery, but also to a shortfall of domestic savings relative to investment. The country is more reliant now than in previous episodes on short-term and historically more volatile foreign capital to finance the deficit.
2011-04-26 00:00:00 Ethics Among Thieves by Michael Edesess (Article)
'Inside Job' is a thoroughgoing indictment of the financial industry that has its virtues but relies on some unsavory vices. On the one hand, through interviews, congressional testimony, and other video, the film exposes cronyism, corrupt ethics, and excessive power at the core of the financial industry. On the other, the movie at times unfortunately feels more like a polemic than a hard-hitting, fact-finding investigative reporting piece.
2011-02-08 00:00:00 The Downside to Venture Investing (like Facebook?) by Dan Richards (Article)
In this interview, Harvard Business School professor Josh Lerner discusses the dangers of venture capital investing and the basis behind Facebook's valuation. This is a transcript of the interview.
2010-11-09 00:00:00 A Reading List for 2010 by Vitaliy Katsenelson (Article)
Updated for 2010 and in time for the holidays, here is the latest installment of my recommended books. I originally wrote this list in 2008 and again last year. I intend to keep adding to and revising it every year. It contains seven sections: Selling, Think Like an Investor, Behavioral Investing, Economics, Stock Market History, Risk and Books for the Soul. The first three sections are presented below and the remaining four will be presented next week.
2010-08-17 00:00:00 Cerulli Survey Results: New Themes in Advisors? Portfolio Strategies by Bing Waldert (Article)
New ideas, such as tactical asset allocation and the use of alternatives, have seen some uptake even before the market crisis, particularly within large institutions, but they are receiving increased attention as solutions for risk-averse clients. This article examines some of the evolutions, using data from a Cerulli Associates survey of Advisor Perspectives readers conducted in June and July of 2010.
2010-05-11 00:00:00 Why Some Hedge Funds Made Money in 2008 by Robert Huebscher (Article)
Steven Drobny is the co-founder of Drobny Global, an international macroeconomic research and advisory firm that counts many of the leading global hedge funds and money managers as clients. He is also author of a recently released book that identifies why some hedge funds made money in the 2008 crisis, while the majority did not. In this interview, he discusses the common themes among successful strategies.
2010-03-30 00:00:00 Seven Tips for a Successful Family Foundation by Nancy Opiela (Article)
Managing a foundation's assetswins you the cachet of being seen as helping your clients fulfill their philanthropic goals, and it is extremely lucrative work that can create a practice-building bridge to the next generation.The administrative aspects, as Nancy Opiela writes, can be daunting and she offers seven tips for a successful family foundation.
2010-03-30 00:00:00 Not a Lost Decade for Diversified, Balanced Portfolios by Joni L. Clark, CFA, CFP (Article)
Did the last ten years really demolish the foundations of Modern Portfolio Theory and classic investing principles? How did portfolios that stuck to the principles of effective diversification and buy-and-hold investing actually perform during the so-called "Lost Decade?" The answers to both questions is an unqualified "no," writes Joni Clark of Loring Ward in this guest contribution, based on her analysis of a DFA-based strategy.
2010-02-16 00:00:00 How to Squander $170 Billion by Robert Huebscher (Article)
Some of the managers supposed to be among the sharpest have cost their clients $170 billion dollars over the last two decades. These are "plan sponsors" who handle pension funds, endowments, and foundations, and Scott Stewart, a former money manager who now teaches finance at Boston University, has documented their value destruction in a recently published study.
2009-11-17 00:00:00 Ned Davis: The Cyclical Bull Rally is Not Over by Robert Huebscher (Article)
In February of last year, Ned Davis, president and senior investment strategist of an eponymous Florida-based institutional research firm, correctly forecast last year's market decline. In February of this year, he called the market rally that began in March. Now, he says, that cyclical bull rally is not over.
2009-11-03 00:00:00 The Best Books on Investing by Vitaliy Katsenelson (Article)
Author and fund manager Vitaliy Katsenelson provides us with his list of the best books on investing. It contains six sections: Selling, Think Like an Investor, Behavioral Investing, Economics, Stock Market History, and Books for the Soul.
2009-10-06 00:00:00 A Quarter-End Letter to Send Clients by Dan Richards (Article)
Last fall, Dan Richards began posting quarter-end letters that advisors could adapt for their own use. Many advisors have told him that they have received an outstanding response to the letters they sent as a result, and Dan provides a template for a third-quarter letter.
2009-08-18 00:00:00 A Crash Course in Investing Six Lessons from the Market Meltdown by Dougal Williams, CFA (Article)
The market decline from October 2007 to early March 2009 was the worst since the late 1930's. Stocks dropped 60%, investor uncertainty skyrocketed, and trust and confidence were shattered. The age-old rules for personal investing are now being questioned: Is Buy-and-Hold dead? Has Asset Allocation outlived its usefulness? Does Diversification still work? In this guest contribution, Dougal Williams provides answers to these questions that can serve as a guide for long-term investment success.
2009-06-02 00:00:00 Jeremy Grantham's Warnings to Investors by Robert Huebscher (Article)
Of the thousands of investment letters penned in the industry, only one draws as much readership as Warren Buffet's annual letter to his shareholders: The quarterly commentary written by Jeremy Grantham. Grantham, the Chairman of the Boston-based investment firm Grantham Mayo Van Otterloo, was a featured speaker at Morningstar's Investor Conference last week, and he spoke at two breakout sessions. Those who, like me, attended both were richly rewarded, as he gave two distinctly different talks, addressing many subjects not covered in his commentaries.