Results 1–50 of 91 found.
Alternative Investments Offer Strategies to Avoid Fed-Inflated Bond Bubble
Over the past several years, investors have shifted hundreds of billions of dollars out of stocks and into investment grade corporate bonds and U.S. Treasuries. To date, this strategy has delivered solid results for many investors, as bond prices have generally continued to rally while bond yields have continued to fall.
Hedging Against (and Profiting From) A Prospective Decline In The U.S. Dollar
The U.S. dollar has remained the world's reserve currency due to several factors: 1. Its large circulation (roughly $1.1 trillion); 2. The denomination of many transactions (especially commodities such as oil and other natural resources) being in USD; 3. The stability of its political system; and 4. The lack of any other viable options. However, that may not always be the case.
New Breed of Managed Futures Funds May Offer Downside Protection...and Upside Opportunity
The search is on for strategies and portfolio managers that can generate return streams uncorrelated to traditional equities and fixed income. Whether it's due to the low return and high volatility equity markets of 2011 or the historically low government bond yields that persist even today, investors are scratching their heads wondering where to turn. A variety of alternative investment styles are available, many of which take an absolute return approach and aim to generate low market correlation, or at least, relatively low correlation to the broad equity markets.
Earning Real Income With Real Estate
The oldest mantra about investing in real estate holds that the key to success is location, location, location. While there is always the chance that real estate investments will produce capital gains (or losses), we believe a better reason to consider real estate investments is for income, income, income. That's especially true in today's ultra low rate environment. While the words "real estate" conjure images of the woeful state of the residential real estate market, the commercial real estate market is in much better fundamental shape.
Is There Value in U.S. Equities?
The importance of asset allocation and timing was again evident last year. After rallying earlier in the year, stocks took investors on a gut-wrenching ride over the summer before rallying again in the fall. And for all of the twists and turns, in the end the S&P 500 essentially ended the year where it began. But that's history. What do we expect looking ahead? As we examine today's investment landscape, we believe opportunities can be found in U.S. stocks, particularly large-cap stocks. There are several trends in place that support our view.
Changing of the Guard: Do European and U.S. Debt Woes Signal a Shift in the Economic World Order?
Industrialized nations in the West have enjoyed decades of economic prosperity and generous social safety nets. However, recent events have made it clear that shifting demographics and huge debt burdens will make it increasingly difficult, if not impossible, for many industrialized nations to maintain the same standard of living for their citizens. It seems that many formerly emerged economies are now on the verge of submerging. As citizens and political leaders in Europe and the U.S. slowly awaken to this reality, economies in many emerging markets are moving ahead at full steam.
As Alternative Investments Move into the Mainstream, Advisors and Investors Need to Choose Wisely
We believe that having a piece of an overall portfolio that is committed to liquid alternatives is a critical component to long-term portfolio stability, capital preservation and growth. No one wants a repeat of 2008, or anything close to it. There are an abundance of liquid alternative choices available, some of which have proven themselves through various market cycles and environments. They have gone from Wall Street to Main Street for good reason. Embrace the opportunity, and you and your clients may just sleep a bit better at night during these volatile times.
The Hunt for (Sustainable) Yield
In any low-rate environment, it is easy to be seduced by any investment that can deliver high yields. But to achieve a consistent total return, you need to carefully weigh the risks and focus on investments that can deliver attractive yields that are sustainable, while also providing the potential for higher income in the future. Our answer thus far has been a combination of sources. Given the current miniscule yield environment, we expect these higher-quality asset classes to move the income-generation meter at least a little for client portfolios without exposing them to inordinate risk.
Bleak Outlook? MLPs May Help Cushion Against Market Volatility
Professional investors spend a lot of time studying probabilities. That is because, just as the direction of the recent Hurricane Irene featured a "cone of uncertainty," the financial markets often change course without warning and can wreak havoc on investor portfolios. Alternative investments, including Master Limited Partnerships, may help limit damage from the inevitable financial storms that investors may face. In today's uncertain economy and volatile markets, MLPs - while not immune - can provide attractive yields and relatively low correlation to the stock and bond markets.
Rough Waters? Trim the Sail
These are interesting times, to say the least, for politicians, businessmen and investors alike. Given the systemic challenges and political standoffs in the U.S. and Europe, we believe it's wise to keep a little extra powder dry. While we generally prefer to be fully invested, we believe our more conservative stance may help dampen the impact of what could be some extreme market volatility in the time ahead. The situation is fluid and we intend to redeploy the cash and short exposure into the markets as some of these risks dissipate, but for the time being, we're trimming the sail.
Passing Fad or Enduring Legacy? The Case for Owning Gold in Good Times and Bad
Gold has been one of the few shining stars during a challenging 10+ years for most investors. In May, gold breached $1,500 an ounce, a new record. In fact, since bottoming out at $252 an ounce in 1999, gold has been enjoying a steady long-term bull run. This has prompted some prognosticators to warn that the "gold bubble" is ready to burst. On the other side of the coin, the more bullish "gold bugs" view the rally as confirmation of their long-held belief in the value of owning gold. Today, gold is still viewed by many as a somewhat exotic investment with little value.
Can Less Deliver More? The Case for Concentrated Equity Strategies
"Don't put all your eggs in one basket" is such a widely held notion within the financial services industry that it's almost blasphemous to suggest an investment strategy that questions this premise. But what if researching multiple baskets of stocks was too distracting and too much to manage? Could focusing your attention on a single, smaller basket of investment ideas produce better results? Some investment professionals-Warren Buffett among them-believe concentrated equity portfolios offer the opportunity for better risk-adjusted returns.
Profiting From the Urge to Merge
If it seems there has been a significant uptick in mergers & acquisitions ("M&A") lately, it's not your imagination. In the first quarter of 2011, worldwide M&A activity rose 55% from the comparable period in 2010. More than 9,600 deals with a value of nearly $800 billion were announced, the highest levels since the second quarter of 2008. We believe the recent pick-up in M&A activity is more than a simple rebound off the lows of the Great Recession and is likely part of a broader, longer-term trend. A confluence of factors supports this hypothesis.
Inflation Worries? Commodities May Help
Many of you may remember the movieThis classic shed some interesting light on the world of commodities.Commodities include natural resources, industrial metals, precious metals, and agricultural products. Or, as Duke explained to Billy Ray Valentine, "Commodities are agricultural products...like the coffee you had for breakfast...wheat, which is used to make bread...pork bellies, which are used to make bacon, which you might find in a BLT sandwich. And then there are other commodities, like frozen orange juice...and gold. Though, of course, gold doesn't grow on trees like oranges."
What the Heck is Going On???
In recent weeks, the capital markets have weathered a bout of volatility not seen for quite some time. What are the main causes and how does this volatility affect our strategies and your portfolios? While there are many flashpoints around the world, we will highlight the "Big 3" (Japan, the Middle East, and federal budget issues) that have made the most headlines, and those which we believe have had the greatest and most recent impact on volatility.
Are Emerging Markets Still
Political unrest in Egypt, Libya, and elsewhere in the Middle East, along with surging food prices around the world, has provided fresh reminders of the inherent risks of investing in emerging markets. Indeed, while the U.S. stock market has been inching steadily upward in recent months, emerging markets have been struggling. Year-to-date through February 28, the MSCI Emerging Markets Index is down -3.79%, while the S&P 500 Total Return Index has gained 5.88%.
The overhang of US unemployment, long-term inflation, and risks of temporary overheating in the Commodity and Emerging markets is a wicked one, so the best posture for 2011, and most years for that matter, is to be invested, but with a net to catch you when you fall. However, the longer out one looks, and the wider the breadth of investment themes one is permitted to consider, the more the truly dynamic secular investment opportunities become visible. The ability and willingness to see the "forest" over the ever-present "trees" is the best advice I can give you.
7 Things to Watch for as 2010 Ends
The cyclical (1-4 year) picture is getting better for U.S. stocks, and even better in the Emerging and Frontier markets. Put us in the camp of people who believe the Fed is too focused on fighting deflation, and at some point in the next half a decade, we will pay for it dearly. Perhaps the most remarkable trend will be the rise of the "Emerging Nations," particularly those in Asia.
How Not To Get Screwed by the Bond Bubble
Bond funds, particularly those that invest in U.S. Treasury securities and other types of bonds at the low end of the risk spectrum, have seen piles of new cash in 2010. Whether it is through long-short funds, arbitrage, multi-strategy or 'equity surrogates' like convertibles and REITs, however, it is possible to create a portfolio with a low standard deviation without having to be trapped by a low fixed rate and the threat of rising bond prices.
Summer Camp for Stock Traders: But Will the 'Fall' Arrive Before the Summer Ends?
Years like 2010 may test the patience of investors in many asset classes, but the key is to keep plenty of perspective. Those who invest in growth assets are hopefully doing so without the requirement that their portfolios avoid losses or near-zero returns for short periods of time. The key is to not forget that risk-reward tradeoff concept when markets move to either extreme, such as the middle of this year when we saw double-digit percentage moves in the S&P 500 in both directions.
Summer Camp For Stock Traders (But Will the 'Fall' Arrive Before Summer Ends)?
There is no shortage of reasons to believe that the environment for stocks is weak, if not outright dangerous. Debts and deficits, for example, have climbed to record proportions. Consumers are learning what 'austerity' means. And governments in developed markets are acting as if they can continue to delay enforcing real, sustainable improvements. Maybe these real world concerns will matter this autumn, when stocks are historically very vulnerable. But the world's troubles seem to have little meaning to the summer campers.
Summer Forecast (and Beyond)
With Spain and its PIIG friends continuing to cause anxiety in global investment circles, it's a good time to focus on the potential risks and rewards facing investors right now. In reviewing our commentary released on February 1st of this year, we find that little has changed in the reward/risk tradeoffs we see. Themes identified earlier this year are now starting to play out and come into focus, as often happens simply with the passage of time. So, here is a brief update on those themes and more importantly, how they are influencing the management of the portfolios we run.
The 10 Most Likely Contributors to the Next Market Panic
Swings in the collective investment psyche have been particularly dramatic over the past few years. Starting in October 2007, a 55 percent decline in the S&P 500 Stock Index in 18 months was followed by an 80 percent gain over 13 months. Now we find ourselves in the midst of another decline and the accompanying high volatility. The question we must consider now is whether this correction is simply the breeding ground for the next global market panic.
In this commentary, Emerald responds to a reader question about China and Japan. Emerald says that equities in both countries are overvalued, but that this is less important than the fact that buying pressure is still outweighing selling pressure. The long-term ascension of the Chinese economy is one of the most prominent secular themes in today's markets. Japan, on the other hand, like the U.S., faces an obvious mess. The ultimate ruler is price, however, and Japanese stock prices have stubbornly risen for many months without a long-overdue correction.
Consistency Counts (Well, If You're Into That Sort of Thing)
Let's call the current global stock market what it is: a combination of government stimulus propping up prices, investors playing catch-up now that the S&P 500 is 75 percent higher than it was in March 2009, investors extrapolating forward recent improvements in the economy and concluding that the next opportunity in stocks is here, and investors who continue to spend and borrow until forced by law or contract to stop. We were here in 1987, we were here in early 2000, and we were here in mid-2007. Here we are again.
Another Year Older... And Deeper in Debt?
Consumers continue to deleverage around the globe, as they have since 2008, and that deleveraging process is the underlying force behind financial markets. Despite the obvious short-term problems for markets everywhere, however, 2010 will be viewed in retrospect as a time for investors with long time horizons to start angling their portfolios toward a more positive long-term return than in the past decade. Continued low interest rates are starting to spark economic growth, and are making 'risk' assets more attractive.
How to Whip Inflation Now (or Whenever It Arrives)
Inflation is coming, but it is hard to predict just when. When it does come, the inflationary era will be several years in length. A flexible investment toolbox that includes the ability to use the short side of the market and employ alternative styles will be essential.
The market rally in the last 10 months of 2009 should have taken two or three years to unfold. The pace of advance thus has to slow, and this slowdown may manifest itself with temporarily lower stock prices. Furthermore, slowly increasing interest rates may suggest fears of inflation.
Results 1–50 of 91 found.