THERE MUST BE
50 WAYS TO INVEST
YOUR ASSETS
She said it grieves me so
To see you in such pain
I wish there was something I could do
To make you smile again
I said I appreciate that
And would you please explain
About the fifty ways
- Paul Simon, "50 Ways to Leave Your
Lover "-1975
When Paul Simon composed this song, he was writing about his ex-wife, not his investment portfolio. Given the cross-currents in the world financial markets, however, we thought it was a good time to remind you of just how much investment flexibility exists for investors and their advisors today.
As a money manager, Emerald lives by two key themes:
BE FLEXIBLE : when making money is easy for the pro or amateur investor, you don't need much flexibility, just a set of darts and today's newspaper, opened to the mutual fund or stock section (if your local paper still carries this). Flexibility to invest in a wide variety of market segments and themes, and having the ability to make the right long-term choices amongst those themes, is the key to the work of any asset allocator. We have found it is not only the skill of the manager that gives you potential for success, but the size of the toolbox at their disposal. More tools allow you to create more scenarios to profit from, whether your time horizon is a few years or a generation.
BE ADAPTIVE: market environments change, and sometimes this occurs suddenly. In secular bear markets such as we are experiencing now in global equities, these changes can be rapid. That in itself does not necessarily signal you to adapt to each change. However, if market cycles in a particular area now complete themselves in a fraction of the time they did during the bull markets of the 1980s and 1990s, it calls for an adjustment in the approach you take to your own buy-sell behavior. "Buy and hold" can become "buy and hope" if this is not recognized. That does not mean you go from being a long-term investor to trading your portfolio; it simply means that subtle adjustments in your expectations for an investment, are a necessary part of long-term success.
So, with a nod to Paul Simon, we present a list we compiled of "50 Ways to Invest Your Assets." They are in no particular order, and by no means is this an exhaustive list. We have focused on what is available in daily-liquid public securities markets (stocks, mutual funds, ETFs). Some of the members of the list may surprise you - the world is gradually recognizing that there is more to portfolio management than traditional stock-bond approaches, and you don't need to be a hedge fund manager to access them. See how many you have invested in, and what you may be missing out on as time goes on. If you need an explanation of any of them, just email us and we'll fill you in.
Be flexible, be adaptive. There must be 50 ways (at least!) to do it.
50 WAYS TO INVEST YOUR ASSETS
1. Agriculture
2. Bank Loans
3. Bear (Inverse) Equity
4. China Equity
5. Convertibles
6. Currency
7. Emerging Market Equity
8. Emerging Market Bonds
9. Europe Equity
10. Non-US Large Cap
11. Non-US Small Cap
12. US Real Estate
13. Non-US Real Estate
14. High Yield Taxable Bonds
15. High Yield Muni Bonds
16. Inflation-Protected Bonds
17. US Government Bonds
18. US Corporate Bonds
19. US Agency Bonds
20. US Mortgage Bonds (yikes!)
21. Infrastructure
22. Japan Equity
23. Non-Japan Asia Equity
24. Latin America Equity
25. US Large Cap Equity
26. US Small Cap Equity
27. US All-Cap Equity
28. Non-US All-Cap Equity
29. Taxable Money Market
30. Tax-Free Money Market
31. Investment-Grade Municipal Bonds
32. US Treasury Bills
33. Telecom Stocks
34. Financial Stocks
35. Healthcare Stocks
36. Natural Resource Stocks
37. Precious Metals Stocks
38. Technology Stocks (its so 1999!)
39. Utility Stocks
40. Concentrated Equity
41. Long-Short Equity
42. Market Neutral Equity
42. Hedged Equity
43. Commodities
44. Convertible Arbitrage
45. Merger Arbitrage
46. Bear (Inverse)-Fixed Income
47. Distressed Debt
48. Covered-Call Writing
49. Eastern Europe Equity
50. Timber
(c) Emerald Asset Advisors
www.emerald-eas.com
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