ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

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2015-09-04 00:00:00 Here’s Your Guide to What the Influencers Are Saying about Commodities by Frank Holmes of U.S. Global Investors

A few legendary influencers in investing are making huge bets right now on commodities, an area that’s faced—and continues to face—some pretty strong headwinds. What are we to make of this?

2015-08-18 00:00:00 Long/Short Equity and Equity Market Neutral – Describing Liquid Alts by Michael Breitenbach of Larkin Point Investment Advisors LLC

Equity long/short strategies construct portfolios consisting of both long and short positions in equity securities and equity-linked derivatives but maintain an overall long bias with significant positive correlation to the overall equity market.

2015-08-13 00:00:00 Putting Adaptability to Work by Roger Nusbaum of AdvisorShares

In our last post we looked at the importance of adaptability to overcome obstacles that impede retirement plans. This may also turn out to be especially important for portfolio management going forward, more so than in the past.

2015-08-04 00:00:00 The Investment Opportunity from Share Buybacks by Michael Lebowitz (Article)

Clear-headed reason shows that unless one is an executive whose compensation is tied to metrics influenced by the effects of share buybacks, there are few instances that support this use of corporate resources. Indeed, shrewd investors can profit at the expense of companies that have aggressively bought back shares.

2015-07-28 00:00:00 Are Managed-Payout Funds Better than Annuities? by Joe Tomlinson (Article)

Managed-payout funds promise to meet retirees’ need for sustainable lifetime income without relying on annuities. To see whether this promise can be fulfilled, I’ll answer three questions: What’s the best design for such funds? How do they compare to annuities? Can retirees do even better by combining managed-payout funds and annuities?

2015-07-23 00:00:00 Mid-Year Outlook: Global Economy Likely to Withstand China, Greece by John Calamos, Sr. of Calamos Investments

The global markets and economy should be able to move higher for the remainder of the year, with accommodative monetary policy and well-contained inflation providing tailwinds. The U.S. looks set to extend its not-too-hot, not-too-cold recovery, while Japan is benefiting from stimulus and pro-market reforms. Although economic conditions in Europe remain fragile and uneven, growth looks to be accelerating overall, and we believe the European Union has the tools to prevent a broader Europe contagion should the Greek bailout resolution fall apart.

2015-06-30 00:00:00 The Joy Of Portfolio Boredom by Roger Nusbaum of AdvisorShares

Last week I stumbled across an article that favorably critiqued an alternative-strategy ETF for being boring which is its objective. “Boring” is not the stated objective in the prospectus but terms like market neutral, absolute return, low correlation to equities and some others really are about boredom. You can judge for yourself whether a given fund that is supposed to be boring is indeed boring as not every fund will deliver on its stated objective.

2015-06-18 00:00:00 Concerned About Rising Interest Rates? Consider These Four Alternative Investments by Walter Davis of Invesco Blog

As I travel across the country meeting with financial advisors and their clients, a common concern I hear voiced is “how can I position my portfolio for when the inevitable happens and interest rates start to rise?” In response, I state that certain types of alternative investments are well suited to help prepare portfolios for rising interest rates in the future, while also potentially adding value in the present.

2015-04-13 00:00:00 Liquid Alternative Strategies as Mutual Funds by Michael Winchell of Larkin Point Investment Advisors LLC

The recent growth of mutual funds offering a wide array of liquid alternative strategies has raised questions among many advisors about the possible drawbacks of attempting alternative strategies within a 1940 Act vehicle.

2015-03-06 00:00:00 China’s Reforms: Will They Work? by Hayden Briscoe of AllianceBernstein

The internationalization of China’s currency is proceeding hand in hand with the liberalization of the country’s capital markets. If China can surmount its short-term challenges, the impact of these reforms on global economies and markets should be profound.

2015-02-03 00:00:00 PIMCO Introduces the PIMCO Multi-Strategy Alternative Strategy by of PIMCO

In a New Neutral environment that anticipates muted returns and heightened volatility, many investors have looked to liquid alternatives in an effort to boost returns and lower overall portfolio risks. Our approach seeks to efficiently combine a range of complementary liquid alternative strategies, offering the potential for diversification and higher return per unit of risk than a single strategy could achieve on its own. This strategy can play a central role in liquid alternatives allocations or be used as a stand-alone complement to traditional stock and bond allocations.

2014-12-22 00:00:00 Completing the Alternative Investments Puzzle: Putting the Pieces Together by Walter Davis of Invesco Blog

In my previous blog, I discussed why I believe advisors and investors should approach alternative investments much like a jigsaw puzzle and offered an organizing framework that can help. When putting together a puzzle, the first step is to sort and organize all the pieces. For alternatives, the first step is to organize and align the various alternative strategies with specific investment objectives. This step is critical because it helps investors decide whether alternatives can help them meet their needs, and, therefore, whether they should invest in them.

2014-12-16 00:00:00 Strategy Spotlight: An Update on PIMCO'S Fundamental Index-Based Product Suite by Sabrina Callin, Robert Arnott of PIMCO

The Fundamental IndexPLUS AR strategies combine the best of what passive indexing and active management aim to deliver: broadly representative, transparent equity exposure plus the potential for meaningful equity market outperformance.

2014-12-15 00:00:00 How to Approach the Alternative Investments Puzzle: Putting the Pieces Together by Walter Davis of Invesco Blog

Every summer my family and I go on a vacation to the beach. While there, my wife buys a big jigsaw puzzle for us to work on. Every year, we feel overwhelmed immediately after she dumps out all 1,000 pieces.

2014-11-11 00:00:00 Factors: An Essential Part of Any Nutritious Portfolio by Adam Butler, Mike Philbrick, Rodrigo Gordillo of Dundee Goodman Private Wealth

We recently posted a piece on factor investing so we were thrilled to have an opportunity to see Dr. Andrew Ang and Don Raymond discuss factor investing at a seminar in Toronto last week.

2014-10-23 00:00:00 Is This the Beginning of a New Bear Market? Important Signs to Watch by Chris Puplava of PFS Group

How the markets behave in the coming weeks will go a long way to help determine if the September-October correction was the start of a new bear market or just a normal correction in a bull market. Chris Puplava provides a detailed outlook

2014-08-25 00:00:00 Correcting a Common Misconception about Alternative Investments by Walter Davis of Invesco Blog

A common misconception about alternative investments is that these investments have failed anytime they underperform the stock market. Investors need to know that alternative investments are designed to achieve returns that are more consistent and less volatile than those of the stock market on a long-term basis across multiple market cycles.

2014-08-12 00:00:00 Long/Short Funds Go 'Unhedged' in Energy by Brian Payne of Fortigent

Over the course of 2014 investors have come to notice the increase in net exposures amongst long/short equity managers. Many investors have grown somewhat wary of this development. Given the markets relatively uninterrupted run-up since late 2012, it is rational to think that these types of strategies might naturally lower their overall net exposure.

2014-07-22 00:00:00 2014 Another Ho Hum Year from Hedge Funds by Ryan Davis, Brian Payne of Fortigent

Through the first six months of the year, hedge funds have generated a positive, albeit somewhat modest return. According to data compiled by Hedge Fund Research, the Fund Weighted Composite of hedge funds in their universe had generated a 3.2% return, compared to the S&P 500s 7.1% gain. While not terrible on a standalone basis, many investors had greater hopes for the asset class following five straight calendar years of underperformance versus the broad equity markets.

2014-06-18 00:00:00 Outlook on the US Dollar, Currencies & Markets: Look Out Below! by Axel Merk of Merk Investments

The FIFA World Cup and market predictions have in common that we are tempted to create a world of make-believe when it comes to predicting outcomes. While others ponder about the meaning of a round ball, well focus on the implications of a make-believe world comprised of ever-higher asset prices. Our caution: look out below!

2014-05-19 00:00:00 Three Questions Investors Need to Ask About Alternatives by Donna Chapman Wilson of Invesco Blog

The world of alternative investments includes a range of hedge fund-like strategies that typically consist of publicly traded equity and fixed income investments, but are unconventionally managed using a variety of exposures (long, short, market neutral) and financial instruments. These strategies have gained acceptance in recent years, and have become more widely available to individual investors through vehicles such as mutual funds. However, questions still remain about the best ways to incorporate them into an asset allocation strategy.

2014-04-23 00:00:00 Positioning Your Portfolio for Rising Rates. by Team of Forward Management

Accelerating outflows from bond funds in 2013 highlight investor nervousness over the prospect of rising interest rates. Investors may want to carefully assess the role of fixed-income investments in their portfolios, particularly in light of other types of income-producing vehicles. Upon careful evaluation of their options, investors can make adjustments suitable to their objectives.

2014-02-20 00:00:00 Peer Group Analytics and Valuation, an Abstraction by David Kleinberg of Universal Orbit

Peer group analytics and valuation are essential components when assessing the optimal risk-return equation. As opposed to an efficient frontier populated with the regressed correlated expected future returns of conventional securities or asset classes perhaps one determined by business segment operations is more advantageous.

2014-01-31 00:00:00 Do Portfolio Diversifiers Belong in Client Portfolios? by Roger Nusbaum of AdvisorShares

The big idea is that the stock market goes up more often than not but when it does go down it scares the hell out of clients. During these large declines some advisors will use tools like gold, hedge fund replicators, absolute return, market neutral, funds that sell short or any other products that tend to not look like the stock market to try to spare clients from the full effect of the decline.

2014-01-23 00:00:00 EPV: Establishing Predictive Value (i.e., Demand Characteristics) by David Kleinberg of Universal Orbit

EPV: Establishing Predictive Value (i.e., Demand Characteristics) is designed as a complement to quantitative portfolio strategies and fundamental research. Continuing the thread from EPV:RO, tested is the premise of structural bias in performance benchmarks as determined by third party data vendors with implied effects on peer group analytics and valuation.

2013-08-07 00:00:00 Thoughts on the Long/Short Space by Kurt Voldeng of AdvisorShares

This insight from Kurt Voldeng highlights performance in the long/short fund universe.

2013-07-02 00:00:00 Finding Value In The Materials Sector Is A Material Thing by Chuck Carnevale of F.A.S.T. Graphs

This is the third in a series of articles designed to find value in todays stock market environment. However, it is the second of 10 articles covering the 10 major general sectors. In my first article, I laid the foundation that represents the two primary underlying ideas supporting the need to publish such a treatise. First and foremost, that it is not a stock market; rather it is a market of stocks. Second, that regardless of the level of the general market, there will always be overvalued, undervalued and fairly valued individual stocks to be found.

2012-12-10 00:00:00 13 for '13 by Richard Bernstein of Richard Bernstein Advisors

Each December we publish a list of investment themes that we feel are critical to the coming year. We continue to believe that US equities are in the midst of a major bull market that could ultimately rival 1982's bull market. It is hard to be bearish when one considers the following.

2012-10-12 00:00:00 Long/Short Investing: Bon Apptit by Geoffrey Johnson of PIMCO

Long/short equity is a distinct investment approach that seeks to reduce downside risk while still capturing much of the equity markets upside potential. By removing the long-only constraint, long/short managers have an expanded opportunity set with the potential to generate returns and mitigate risk from both long and short investment ideas. Long/short equity strategies have a lower long-term volatility and risk profile than the market as a whole and have captured a good percentage of price movement in up markets and a smaller percentage in down markets.

2012-06-04 00:00:00 Alternative Mutual Funds See Continued Growth by Chris Maxey and Ryan Davis of Fortigent

During an especially difficult week, global equity markets were deep in the red, as the S&P 500 Index lost 3.2% and the Dow Jones Industrial Average fell 3.3%. There was no shortage of disappointing data during the course of the past week, ranging from weakness in the ISM manufacturing survey to an underwhelming May labor market report. It was such a bad week, in fact, that Bespoke Investment Group found that 18 of the 21 economic indicators released in the U.S. fell short of expectations.

2012-04-25 00:00:00 Avoiding Equity Market Exposure by Team of American Century Investments

The year 2012 finds the search still on for income and capital appreciation with acceptably low volatility. Many investors remain leery of stocks and are also interested in opportunities that possess low correlation to equity markets. In addition, the low interest rate environment presents difficulties for those trying to achieve total return goals by relying on fixed income investments. Given these issues, some may wish to learn more about the techniques utilized by many equity market-neutral (EMN) strategies.

2012-03-09 00:00:00 Long-Short Funds Lead Greenwich Indices in February by Clint Binkley of Greenwich Alternative Investments

Hedge funds turned in another month of gains across all major strategies, notes Clint Binkley, Senior Vice President. Results from Long-Short Equity funds show that managers are increasing net exposures as they become more confident about economic conditions. Although some managers continue to expect a market correction, most believe it will be mild as institutional investors are still waiting for opportunities to add to their positions.

2012-02-23 00:00:00 Muni Outlook Q&A with Portfolio Manager Alan Kruss by Team of American Century Investments

Municipal bonds (munis) are back in the bond market spotlight, but for different reasons than a year ago (when widespread defaults were projected, and muni funds experienced heavy outflows). Muni performance has rebounded strongly since then, which has triggered follow-up questions about the muni market outlook. We posed them to Alan Kruss, Vice President and Municipal Portfolio Manager at American Century Investments.

2012-02-16 00:00:00 Weekly Market Update: Introduction to Alternative Investments by Team of American Century Investments

Alternative investments (or alts as they are commonly known) have exploded in popularity in recent years. What began as specialty investment strategies utilized by only the most sophisticated institutional investorssuch as pension plans and university endowmentsare now readily available to retail investors through a number of mutual funds and exchange-traded funds. Here we try to explain alts appeal in broad terms, discussing how these strategies are used and what role alts may play in an individual investors portfolio.

2012-02-10 00:00:00 Indices Show Hedge Funds Off to Strong Start in January by Clint Binkley of Greenwich Alternative Investments

"US equities rallied significantly to begin 2012 and Long-Short managers are the best performers thus far. Hedge funds focused on Market Neutral strategies were also surprisingly strong as both Arbitrage and Event-Driven managers posted their best results in months. Despite investors being drawn into risk-on sectors of the market, most funds remain cautious with the economic situation in Europe still unresolved, notes Clint Binkley, Senior Vice President.

2012-01-11 00:00:00 Greenwich Global Hedge Fund Index Slips 15 Points in December by Clint Binkley of Greenwich Alternative Investments

US equities ended 2011 essentially unchanged but endured significant volatility throughout the year. Hedge funds focused on market neutral strategies were above average performers for the month and the year as they were able to withstand the market uncertainty. Looking forward, we expect Directional and Long-Short strategies to have better performance as the global economy continues to stabilize

2011-12-09 00:00:00 Greenwich Hedge Fund Indices Post Modest Losses in November by Clint Binkley of Greenwich Alternative Investments

Hedge funds as measured by the Greenwich Global Hedge Fund Index posted losses in November, losing ground during the latter half of the month on weak fundamentals in European markets. The GGHFI shed 1.05% compared to global equity returns in the S&P 500 Total Return (-0.22%), MSCI World Equity (-2.69%), and FTSE 100 (-0.70%) equity indices. European headlines continue to dictate the mood of global markets and cause increased volatility in equities. Hedge fund managers have decreased leverage and exposure to mitigate market risk but are still exposed to broader moves

2011-11-09 00:00:00 Greenwich Global Index Hedge Funds Bounce Back in October by Clint Binkley of Greenwich Alternative Investments

Hedge funds as measured by the GGHFI posted strong results in October, benefitting from a rebound in equity prices during the month. The GGHFI gained 2.27% compared to global equity returns in the S&P 500 Total Return +10.93%, MSCI World Equity +10.26%, and FTSE 100 +8.10% equity indices. 67% of constituent funds in the GGHFI ended the month with gains. Concerns over Europe began to lift in October and hedge funds were able to benefit from the rise in equity prices. Long-Short managers performed well given their cautious stance entering the month.

2011-09-30 00:00:00 Is a More Integrated Europe the Answer? by Andrew Goldberg and David M. Lebovitz of J.P. Morgan Funds

Germany has voted for an expanded EFSF to stabilize the European Sovereign debt crisis, an important step towards reducing near-term concerns. However, broader problems still loom. In recent weeks, mounting skepticism has exacerbated fears of recession in developed economies, sending risk assets plunging and volatility soaring. In the following update on the situation in Europe, well consider: The underlying issues plaguing Europe, A summary of steps taken to address them thus far, A look at possible next steps and solutions and a few thoughts on investing in such difficult times.

2011-09-09 00:00:00 Hedge Funds Minimize Losses in August by Team of Greenwich Alternative Investments

Hedge funds turned in an excellent month of relative performance when compared to equity market benchmarks, notes Clint Binkley, Senior Vice President. Macro, Futures and Short Biased managers produced positive returns in spite of severe market declines. We continue to expect hedge funds to outperform long only strategies in this volatile market environment. Hedge Fund Strategy Highlights: Directional Trading funds are the best performing group of funds in August, gaining 0.3%. Market Neutral funds provide protection from market swings, declining only 2.9% on average for the month.

2011-09-06 00:00:00 Five Strategies for a Sideways Market by Kane Cotton, CFA and Jonathan Scheid, CFA (Article)

If this slow growth environment coupled with asset price volatility continues for (to steal a quote from Fed Chairman Bernanke) 'an extended period,' what additional portfolio strategies might aid the overall risk/return profile of investor portfolios? More specifically, how do you manage investments in a sideways market?

2011-05-31 00:00:00 Letter to the Editor On Absolute Return, Market Neutral and Long-Short Funds by Todd Huster (Article)

A reader responds to a market commentary, What is conservative about Absolute Return, Market Neutral, or Long/Short Mutual Funds?, by Kendall Anderson of Anderson Griggs, which appeared on May 23, 2011.

2011-05-24 00:00:00 What is conservative about Absolute Return, Market Neutral or Long/Short Mutual Funds? by Kendall J. Anderson of Anderson Griggs

The machine of Wall Street has convinced many individuals who believe they are prudent, conservative, investors that a mutual fund whose name or objective includes the terms Absolute Return, Market Neutral, Long/Short or hedged, will never lose your money. An individual whose fear of losing again from common stocks just can?t bear sitting on cash and earning a nickel of interest every three months 1k. The desire to increase returns is just too great. Before you fall for the hype there are a few things you should know. The most important item you should remember is that there is no guarantee.

2011-05-16 00:00:00 Public Policy Looking Better by Brian S. Wesbury and Robert Stein of First Trust Advisors

We think there are five (5) reasons to be bullish about the US economy. First, monetary policy is loose and likely to remain so. Second, the financial panic is over, thanks to the end of mark-to-market accounting rules. Third, technological advances continue to boost productivity growth. Fourth, our free market economy is incredibly resilient, more so than the pessimists believe. And fifth, the policy environment is improving. Despite what Bernanke might say (that quantitative easing lifted stock prices), we think the return in the S&P 500 has to do with a positive shift in government policy.

2011-05-03 00:00:00 Q1 2011 Portfolio Commentary by Jay Compson of Absolute Investment Advisors

In a nutshell, the Fed-induced "risk trade" is once again at a crossroads with commodity/oil prices and the real economy. You know the endgame is near when the Bernanke/Yellen team dismiss the "bad stuff," much like they did with sub-prime. Investors should be prepared for a possible reversal of some of the above trends as they relate to the US dollar, European Union difficulties, and the potential ending of the credit boom across Asia. Given the high sensitivities and correlations across most global asset classes, diversification can be incredibly difficult.

2011-04-08 00:00:00 Hedge Funds Show Mixed Results Among Strategies in March by Clint Binkley of Greenwich Alternative Investments

Most hedge funds advanced in March, but losses in Directional funds dragged down the group. The Greenwich Global Hedge Fund Index shed 10 basis points compared to global returns in the S&P 500 Total Return +0.04%, MSCI World Equity -1.24%, and Barclays Aggregate Bond +0.06% indices. 58% of constituent funds in the GGHFI ended the month with gains. ?The whipsaw action in the market during March led many trend following funds to suffer losses latter in the month,? notes the Sr VP ?The outlook for managers is positive as increased volatility tends to work in favor of most hedge fund strategies.?

2010-09-13 00:00:00 And a Partridge in a 'Pair' Tree by Jeffrey Saut of Raymond James Equity Research

We've gone from double-dip to double-drip. While the economy is slowing, a slide back into recession is unlikely. Chances of deflation have also deflated. Meanwhile, last week the Labor Day Indicator sounded the 'all clear' signal when the S&P 500 closed higher over the four days following the holiday. Unless the S&P violates its 50-day moving average of 1085, followed by a break of 1060, the path of least resistance for stocks remains up. Still, investors continue to shun stocks, leaving the equity risk premium exceptionally large.

2010-08-17 00:00:00 Letters to the Editor: Harold Evensky, et. al. by Various (Article)

Our letters to the Editor include three responses to articles in last week's issue from Harold Evensky of Florida-based Evensky & Katz.

2010-08-10 00:00:00 When Active Management Matters by Kenneth R. Solow, CFP and Michael E. Kitces, MSFS, MTAX, CFP (Article)

Financial planners have eagerly awaited any research that could finally, definitively prove - or disprove - the pesky notion that active management is effective. Though no one has yet risen to that challenge, past academic studies have been improperly interpreted to show that portfolio policy, or asset allocation affects portfolio returns far more than active management. As Ken Solow and Michael Kitces write in this guest contribution, the most recent study to tackle the active management debate, by Yale professor Roger Ibbotson, shares two weaknesses with previous research.

2010-07-24 00:00:00 The Artificial Economic Recovery by Tony and Rob Boeckh of Boeckh Investment Letter

Economic recovery in the U.S. and elsewhere has slowed rapidly and forecasts are being downgraded accordingly. The massive stimulus packages stopped a self-feeding downward spiral, but they have given us only an artificial recovery. Government tax revenues will be disappointing and expenditures will remain elevated. A fragile economy, however, should not push investors away entirely from risk assets. High levels of risk and uncertainty argue for continued focus on wealth preservation and sound diversification.

2010-04-29 00:00:00 Q110 Portfolio Commentary by Jay Compson of Absolute Investment Advisors

The potential for systemic risk continues to be very high, and Absolute Investment Advisors believes markets are only pricing in the optimistic outcomes and not the bad ones. This is the opposite of a year ago. The past few market cycles have been highly compressed as investors have appeared to recognize risks only after they occur. As such, the discounting mechanism of the markets has also become compressed as all assets have gone through stages of an escalator up and then an elevator back down (with very few floors to get off).

2010-04-07 00:00:00 When the Facts Change by Niels C. Jensen of Absolute Return Partners

An echo bubble is upon us. Echo bubbles are the children of primary asset bubbles, and emerge when monetary authorities respond to the bursting of a primary asset bubble by slashing policy rates. Extraordinarily low interest rates are currently encouraging another bout of excessive risk taking. If policymakers raised rates now, however, they would almost certainly kill the fledgling recovery. The pressure is therefore on monetary authorities to keep rates low and feed the new bubble. Investors should steer toward assets that benefit from high volatility.

2010-01-29 00:00:00 Q409 Portfolio Commentary & Updated Fact Sheet by Jay Compson of Absolute Investment Advisors

?Beyond just our economic, fiscal, and underemployment problems, we are likely to see a reversal of three decades of tailwinds that will turn into large headwinds: deleveraging, higher taxes, re-regu


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