The Alternative Investments Channel

How do you measure an active manager’s success?

Financial research and technology can dissect individual funds to attribute the reasons behind performance.

Bonfire of the Absurdities

This week’s letter will take a look at the growing number of ridiculous, inane, and otherwise nonsensical absurdities that fill the daily economic headlines. I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week.

The Importance of Implementation Efficiency

In the second of a three-part series on principles of the low-return imperative, we zero in on the value of efficient implementation—and identify three ways it may help achieve desired outcomes.

Ted Seides: Why I Lost My Bet with Buffett

Only a highly confident investor would bet against Warren Buffett. But Ted Seides had the humility to admit that his loss of a $1 million wager is all but certain. Unlike what most believe, though, he said the high fees charged by his hedge funds were not to blame.

The Distribution of Pain

When you write about economics, you learn very quickly that the economy doesn’t care what you say about it. The forces that drive it are beyond any one person’s comprehension, much less control. But at the same time, the economy doesn’t work like a law of nature. Unlike gravity, for instance, the economy responds to human choices and preferences. We influence it, even if we don’t understand exactly how.

Oil at Two-Year Highs as Saudi Arabia Engages in Its Own “Game of Thrones”

Recently I identified five agents of change that I believe investors should know about right now. I’d like to add one more to the list: Mohammad bin Salman. The crown prince of Saudi Arabia, 32, was little known outside the region before this past weekend when he jailed members of the royal family, presumably in an attempt to consolidate power ahead of taking the throne.

Vanguard's Lesson on Great Client Communication

Advisors can learn from Vanguard, whose advice platform is adding $5 billion in assets a month, in part by making videoconferencing a core part of how it communicates with clients.

Year-End Tax and Financial Planning Ideas

After the 2016 presidential election, we knew that 2017 was going to mean a change in direction for the country. President Trump ran on a platform of tax and healthcare reform, which seemed to signal a new frontier for tax and financial-planning strategies. So a year later, where do we stand?

Alternatives

Investors looking beyond stocks and bonds may want to consider closed-end funds containing alternative investments, say CEF industry professionals.

Market Valuation, Inflation and Treasury Yields: Clues from the Past

Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns. In a "normal" market environment -- one with conventional business cycles, Federal Reserve policy, interest rates and inflation -- current valuation levels would be a serious concern.

But these are different times.

Part 3 Building Portfolios: Diversification without the Heartburn

Part 3 Building Portfolios: Diversification without the Heartburn The wisdom of diversifying investor portfolios across a wide range of asset classes is indisputable. But diversifying client portfolios beyond mainstream stocks and bonds comes with challenges, starting with clients’ unfamiliarity with diversifying asset classes and a propensity for clients to regret diversifying when results disappoint.

Trump’s Fed Choice: Continuity

Jerome Powell, President Trump’s pick to lead the Federal Reserve, is likely to continue the central bank’s gradual retreat from unconventional policy. But the test for a Powell-led Fed will come when the economic cycle turns.

Runnin’ Down a Dream

The “Goldilocks” regime we described last month remains solidly in place – global economic growth (especially in manufacturing), strong corporate earnings and revenues, raging equity markets, low interest rates, and an almost frightening level of market complacency.

FAANG SCHMAANG: Don’t Blame the Over-valuation of the S&P Solely on Information Technology

A small group of technology stocks have recently delivered stellar returns. Facebook, Apple, Amazon, Netflix, and Alphabet (Google), the so-called “FAANG” stocks, are up 36% on average year to date through September. This superlative performance, in such a narrow group of large cap names, has led many to raise questions about the current valuation of the S&P 500, its sector composition, and comparisons to other markets.

Retirement Income Planning Takes a Flexible Approach

If you are like many people, you probably have put plenty of thought into what your ideal retirement would look like. Maybe it involves exotic travel, pursuing a favorite hobby or spending more time with friends and family.