Results 51–72 of 72 found.
"Fixed" Income Investing is Broken
Back in June of this year, the Fixed Income (a.k.a. bond) market may have experienced the defining moment of this generation of investors. The yield on the 30-year U.S. Treasury bond moved above 3.50% for the first time since the summer of 2011. It stands at about 3.80% now. After many fake-outs, this could be the start of a long-term trajectory higher.
50 Years Later: JFK and the Misery of Rising Interest Rates
On the 50th anniversary of one of the most tragic events in U.S. history, I took a quick look back at investment market history around that time. As it turns out, the stock and bond markets had done quite well in recent years and by mid 1963, the 10-year Treasury was a bit under 4% (around the lowest rate in about a half-decade) and the stock market was near its all-time high. Whether it was a direct result of the calamity of Kennedys death or other factors, late 1963 was a turning point for the U.S. stock and bond markets.
Asset Allocation: Pie in the Face?
The typical approach to spreading ones assets in order to diversify and conquer, is to have the client complete a risk tolerance questionnaire. That survey is important not only to establish guidelines for how the assets will be managed, but also because some form of it is required by securities regulators to make sure advisors know who their clients are. The magical conclusion usually includes a color pie chart, representing a variety of asset classes that are assumed to be a path toward asset growth and preservation of capital.
The Top 10 Investor Worries Right Now
In the first of a regular series in my Informed Investing blog, lets count down the top 10 things that give investors the willies in todays investment environment. These are situations known to even casual investors, but may or may not be communicated to them effectively by their financial advisors.
Portfolio Turnover: What Industry “Experts'' Are Missing
Drawing conclusions about tax efficiency of a money manager or other investment vehicle based solely on trading turnover is shortsighted and can cause you to bypass some very good potential investments and investment strategies. Keep that in mind as year-end portfolio tax planning rolls around.
Is Your Portfolio a Five-Tool Player?
In baseball a 5-Tool Player is one who has high-level abilities in these areas: hitting for power, hitting for average, running, fielding and throwing. 5-Tool Players are a special breed, and teams covet them. I have identified 5 tools a premier investment approach should have in order to be successful in our arena, the achievement of client goals and growth of advisory practices.
Ten Other Things that Should be Shut Down
In order to avoid getting too P.O.d (thats either a slang term for angry or a pun on the Post Office, take your pick), I asked the Sungarden investment, operations and marketing teams to provide me with their opinions on what else to shut down. I combined their thoughtful work with my own thinking on the topic and here is our top 10 list.
A Sensible Way to Evaluate Your Investment Performance
I recommend using at least two benchmarks for each portfolio or portfolio strategy: One based on the portion of the S&P 500’s volatility that the client is prepared to endure over time. The other is the S&P 500 Total Return Index as this has become, over time, a very common and recognizable indicator of performance of “the market.”
The 3Ls That Matter
This weeks message is simply to group together three L-words that remind us of what spikes and crashes markets, and keeps us in the appropriate frame of mind, lest we forget the crisis that gripped our minds and money 5 short years ago.
Having "The Talk" About Time Horizon
Volatile markets, increased complexity and media hype have the potential to distract us from our true objectives for the wealth we have saved and now invest. But those distractions can be overcome. How? It starts with understanding what this often-used, misunderstood term Investment Time Horizon really means.
Survey Says... What?
During the past week, a survey caught my eye and dropped my jaw. It was published in Investment News, a leading online and print publication for the investment advisory industry last weekend. It covered a survey of individual investors by brokerage firm Edward Jones about the potential impact of rising interest rates on their investment portfolios. According to the article, written by award-winning columnist Jeff Benjamin, “two-thirds of the respondents don’t understand how rising rates will affect their investment portfolios.”
The Dirty Side of the Storm
The implications are enormous. But dont tell that to the bond fans. They are still showing their clients 3/5/10 year historical returns through the end of 2012, where most measures of bonds total return resembled that of a stock portfolio. This was a fortunate reality for those who were invested heavily in bonds, but it is a mirage for those who are looking forward from here. They dont realize it, but they are currently in the eye of the storm. The dirty side is probably right behind it.
Risk Tolerance: Defining a Misunderstood Term
First, lets be clear: Risk is the possibility that you will need money but dont have it, either because your portfolios value plunged, because your investments dont have near-term liquidity, or both. What freaks investors out in the here-and-now is VOLATILITY. Yet many traditional approaches to building a portfolio dont really account for this, other than a token survey question or two when the client is first starting to invest.
Global Markets at Mid-Year
Most investors based in the U.S. are walking around thinking the market has gone way up this year. They are rightif they are talking about certain indexes within a big wide world of markets, including stocks, bonds, currencies and commodities. But the disparity (i.e. lack of correlation) among markets has been striking. I think that the best way to convey this to you is to simply show you how a small group of market indexes have done for the year-to-date yesterday along with brief commentary, in bullet point form.
Volatility Management: The Key to Investing in the 21st Century
Volatility Management is the most important consideration in our portfolio management process. In some market environments, we think investors are well-compensated for the risks they take. In others, they are not. Thus, volatility can be either a warning sign or a gateway to outstanding opportunities. It is part of an investment managers job to decipher that for you, on an ongoing basis, and make rational decisions.
Every Drunk Must Have His Drink
So, is this the moment to sell all of your assets and hide? NO, but it certainly is a time to be aware of the psychological change taking place in investor behavior and to have an investment approach that by its nature is adaptable to such enormous changes in investor perception. I get a strong feeling we are entering another period in which, like the economy, some investors and financial advisors will thriveand others will dive. Are you prepared?
"Fixed" Income Investing Is Broken
Herb Brooks, who coached the 1980 Miracle on Ice U.S. Olympic Hockey Team to its unlikely win over the Soviet Union, included that quote as part of what I consider to be the best motivational speech in sports history. He was talking about his team and their Russian opponents. He might as well have been talking about bond investors on June 20, 2013.
Submerging Markets: What the Emerging Market Selloff is Telling Us
Investing at its most basic level is about one thing: the return you seek on your investment and the risk you take to get that return. I often emphasize that the biggest risk to investors is volatility, because its the occasional shakiness of markets or market segments that causes investors (whether they manage their money or have someone else do it for them) to react emotionally instead of logically. That plays out every day in markets around the world.
Dad's Rules: Timeless Wisdom From a Fallen Investment Hero
Once I publish a blog post, I immediately start thinking of a topic for the next one. At this time last week, I decided to focus todays blog on the concept of trading turnover that is, how long you hold something you bought, until you sell it. It seems that with the stock market on a four-year tear and the bond market threatening to fall apart at any moment, it is a great time for investors to prioritize the most basic investment rule: buy low / sell high.
Where the Heck Are We?
The current investment market climate reminds me of a scene from the old TV sitcom F-Troop. U.S. soldiers ask their Native American friends, the Hekawi tribe, how they got their name. As Chief Wild Eagle, the Hekawi leader, said back then (paraphasing: many moons ago, Tribe travel west, then come big day tribe fall over cliff, that when Hekawi get name. Medicine man say I think we lost. Where the heck are we?
The 4 Biggest Investment Performance Myths - and How They Can Torpedo Advisor-Client Trust
In 26 years in the investment industry, I have seen investor and advisor behavior from many different angles: as an advisor, portfolio manager, strategist, author and proprietor. Two things have been quite consistent during that quarter-century: 1) That clients and advisors both care deeply about investment performance and 2) that investment performance is rarely evaluated with proper perspective.
Results 51–72 of 72 found.