Alternative Investments Hit the Mainstream
Goldman Sachs says, “We believe the world has changed over the past decade, challenging participants’ ability to stay on track and achieve retirement goals.” This is the headline of Goldman’s recent advertisement promoting alternative investments for defined contribution retirement plans. Now if Goldman Sachs is promoting this, it means that this is either the height of the bubble for alternative investments or the beginning of an avalanche of funds flowing …
Choose Carefully Before Making a Permanent Move
This month Global X launched a new and unique product Permanent ETF (PERM). I would like to applaud the innovation of the product, but criticize its timidness. First, the good. The product aims to provide an all-inclusive answer to investors who seek diversification and invest in many different asset classes, akin to what the endowments do. The endowments, such as Yale and Harvard, allocate their portfolios to different asset classes, …
A Dangerous Game
There’s no doubt about it: Energy is on the rise. The space, as measured by the Energy Select Sector SPDR (XLE), is this month’s best-performing sector. The fund has gained 4.2% as of Feb. 15, outperforming the S&P 500 by 1.8%. Sector ETFs, Month-to-Date Performance Source: The Rockledge Group That’s quite a difference from last month’s performance, when it was close to the bottom of the pile, underperforming S&P 500 …
Trading Like the Hedge Funds Do
With the market starting the year quite well — S&P 500 was up 4% as of Wednesday’s close — we might be tempted to assume thatĂ‚Â Ă‚Â the rest of 2012 will go as smoothly, and start allocating higherĂ‚Â Ă‚Â percentage of our portfolios to U.S. equities. After the past year,Ă‚Â Ă‚Â which resulted in zero returns for the S&P 500, who can blame us?Ă‚Â Ă‚Â It’s also an election year, so things we …
2011 In Review
Last week I wrote about possible asset allocation for this year. This week I would like to review last year sector performance and remind that a prudent investor wants to have proper asset and sector allocation instead of picking individual stocks. Last year was a year that we will not forget, the volatility was very high and correlations among asset classes increased dramatically. The S&P 500 was dead even for …
Lessons From the Oracle Plunge
What a day Oracle (ORCL) had Wednesday. Here was a seemingly bullet-proof company, with a great CEO (unless you ask his competitors), continuously growing internally and with insatiable appetite for acquiring competitors — and the stock was hammered on a wide earnings miss. Before this occurred, Oracle probably appeared to be an airtight investment. After all, what else could an investor want in a stock? In my opinion, however — …
Dynamic Risk Allocation
Putnam Investments came out with a new fund last month, called Dynamic Risk Allocation Fund (PDREX). The fund “pursues total return like a traditional balanced fund, but with a better balance of risk. This investment approach is called Risk Parity. Rather than letting equities dominate, the risk is spread more evenly across a flexible variety of sources.” It is an interesting approach and it touches several key portfolio investment …
Alternative Strategies Allocation
Last week my partner and I participated in the webinar about Alternative Investment strategies and how to position them in your portfolio. We also discussed the types of alternative strategies that are out there. We also talked about what is commonly called the Endowment Model and below is the performance of the Harvard Management Company, which manages the endowment of Harvard University and I see that they have excellent …
Volatility prompts growing use of ETFs, says survey by Chris Flood
Ă‚Â High levels of volatility across financial markets are forcing US financial advisers to pay more attention to risk management, leading a majority to adopt blended strategies employing passive exchange traded funds and active investments, according to Invesco. Invesco surveyed 206 financial advisory firms and found some advisers using basic strategies, such as investing more conservatively or rebalancing portfolios frequently, to minimise risk. Employing a blend of active investments and passive …
Barrons ETF Expert Portfolios-Not much in the way of innovative thinking. By Roger Rusbaum
One of the features in this week’s Barron’s included an interview with three investment advisors who were billed as ETF experts using all-ETF portfolios for clients. Obviously I have no idea where Barron’s found these guys but the conversation read like something you could have read four years ago at IndexUniverse (that is a compliment to IndexUniverse and a shot at the Barron’s article). Each interviewee provided specifics of the …