The Specialty Investments Channel

Fads, Manias and Bubbles!

It is important to separate mini-manias from true bubbles. Unfortunately, the difference is mostly the amount of money chasing the folly. Millions and even billions of dollars lost (and thousands of jobs) equate to fads, while trillions of dollars lost (and rampant unemployment and recessions) are bubbles.

All Asset All Access, January 2018

In this issue, Research Affiliates provides its outlook for 2018 and discusses where it sees attractive return opportunities across the globe.

Enhanced Portfolio Diversification: The Power of "&"

Most investors, whether institutional or individual, tend to believe that stocks are a good—perhaps even the best—investment in the long run. However, the reason for expecting good performance from stocks is perhaps not always clearly articulated: Quite simply, it is because they are risky. Investors also tend to believe that investing in alternatives, such as managed futures, necessitates sacrificing some of their stock and/or bond asset allocation. This Insight explains how investors can have both the diversification benefits of managed futures, and their traditional stock/bond portfolio. Thus, the power of “&”.

Weighing the Week Ahead: Should Investors Start Worrying About Inflation?

The economic calendar is about normal, with market participants back from holiday vacations (but perhaps fighting the snow). The key reports are the PPI and CPI. Inflation is the key 2018 worry for many, so these reports will get more attention. Especially if the numbers are a little hot, I expect the punditry to be asking: How worried should we be about inflation?

The Volatility Enigma

The fourth quarter of 2017 closely resembled much of the first three quarters – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.

Equity Factor Investing: Three Key Considerations

Equity investors in search of higher returns are increasingly turning to factor investing. Driving this trend is frustration with the underperformance and higher fees of traditional active equity approaches, along with a growing realization that many stock-picking strategies owe their results largely to the manager’s factor tilts rather than stock-specific risk. 

On My Radar: Beating the S&P 500

When Mark Finn speaks, you listen. Commanding, sharp, brilliant. He’s a maverick in the investment business. He’s also a mentor, incredibly humble and frankly one of the nicest human beings you could meet. He continued, “I need your help on something. I’ve got something big and I’m not sure how it should best be packaged.

Weighing the Week Ahead: Which Stocks are the Tax Cut Winners (or Losers)?

The economic calendar is light, the week is short, and the A-Teams are taking some time off. It is the formula for punditry gone wild. But what will be the subject, especially if Bitcoin is not moving much? I suspect questions of two types. The first will focus on the tax cuts, identifying the winning and losing stocks and sectors. The second will update the list of worries for 2018.

TDFs: Reliable Outcomes Begin With Income Projections

Long viewed as a retirement savings vehicle, Target Date Funds (TDFs) are experiencing something of an identity crisis. For plan sponsors and participants alike, account balances are being eclipsed by income projections as a TDF’s key indicator of financial wellness in retirement says Glenn Dial, Head of Retirement Strategy in the US with Allianz Global Investors.

Weighing the Week Ahead: Fresh Legs for the Stock Rally in 2018?

The economic calendar is loaded, especially with reports on housing. Despite this, the calendar and recent events will stimulate pundits to get out their crystal balls. I expect many to be asking: Can the rally in stocks find fresh legs in 2018?

How North Korea Evades Sanctions

If sanctions against a target regime can be thought of as antibiotics, then North Korea has largely become drug-resistant. Indeed, North Korea is exhibiting “superbug” traits, increasingly impervious to sanctions, according to John Park.

Back-tested strategies: Real or random?

Some are real. Others are random.

The Hidden Cost of the FIFO Rule; How Long will Growth beat Value?

With changes coming to the tax code, we look at its impact on investors and how long growth stocks will continue to outperform their value counterparts.

High-Dividend Stocks Have Value – and Beat Value, Too

In reading Larry Swedroe’s article, Slaughtering the High-Dividend Sacred Cow, it strikes me that high-dividend stocks are far from “sacred cows” and need not be slaughtered. Instead, his value-advocacy piece ignores the enhanced risk-adjusted returns and the much lower drawdowns that can be found in a diversified basket of high-dividend stocks.

Is Now the Time to Invest in Alternatives?

I recently have been traveling around the country participating on a panel titled: “Alternatives: Time to Buy When Others Are Selling?” Spoiler alert — my answer to that question is a resounding “yes.” There are two reasons why.