Adding Momentum to Your Portfolio

The tendency of recent market performance to persist, an effect known as momentum, has been pervasive even though it is a “blatant violation” of what you would expect in an efficient market. This according to Alex Bryan, director of passive strategies research for Morningstar, in a recent interview. Bryan explains that extensive research has uncovered […]

Trade Protectionism May Stunt Market

While for the past three decades U.S. equity prices have been supported by an acceleration of global trade, a recent article in The Wall Street Journal says there is concern that the “broad slowdown in world trade agreements” will undermine corporate profits and put pressure on the stock market. The article cites estimates by global […]

Marks: Be Selective in a Heated Market

  Last month, Bloomberg’s Erick Schatzker sat down with Howard Marks, co-chairman of Oaktree Capital, to discuss the fund manager’s investment approach. With respect to whether the now-stretched equity valuations make for what some are calling “treacherous” conditions, Marks comments, ” The riskiest thing in the world is to believe there’s no risk. When people […]

Active Investing Showing Signs of Life

Active managers have been struggling and stock hedge funds have seen a nearly eight-year performance slump, but a shift could be in the offing according to an article in last Friday’s Wall Street Journal. The article offers data from Bank of America Merrill Lynch showing that 58% of active stock managers beat their benchmarks in […]

Market Shifting Toward Intrinsic Value

“The playbook changed this year,” says Tom Lee, head of research at Fundstrat Global Investors, in an interview with Bloomberg earlier this month. He said the market is shifting toward intrinsic value over pure growth. “What you would have had to own over the last seven years,” Lee quips, “this year would have gotten you […]

How to Invest in a High-Debt, Low Yield World

While the word “debt” often carries a negative connotation, “it is important to remember that debt can be used in different ways. In fact, all debt, similar to dietary fat, is not created equal.” This according to an article in last week Barron’s that outlines possible investment approaches in a highly-leveraged yet low-yield global market. […]

Housel: Manager Communication with Investors is Key

“The most overlooked trait of investing success is communicating to your clients the softer and emotional side of investing,” writes Morgan Housel, partner at The Collaborative Fund and a former columnist at The Motley Fool and The Wall Street Journal. The premise of Housel’s blog post is that being a great investor is not necessarily the same as running […]

October Low Could Signal Rally

Over the last 120 years, the Dow Jones Industrial Average has gained an average of 6.8% from its lowest October close through December 31st, writes Mark Hulbert in last week’s MarketWatch. Given recent dips, we could see a “significant rally through the end of the year,” according to Hulbert. He contrasted post-low monthly gains going […]

Benjamin Graham Inspired Picks

In his book The Intelligent Investor, the “Father of Value Investing” (and Warren Buffett’s mentor) drives home the importance of evaluating a business’s fundamentals before investing. In a recent article for Forbes, Validea CEO John Reese explains the metrics he used  to create his Graham-inspired stock screening model and offers the following high-scoring picks: Genesco […]

Not All Active Managers Created Equal

As investors continue to divert dollars from actively managed funds to lower-cost passively managed index funds, research conducted by two finance professors at Pace University has revealed an interesting finding, according to last week’s Wall Street Journal. The study found that diversified emerging-markets funds that are actively managed are more likely to outperform their less […]

Dalio Talks to Central Bankers

Earlier this month, Bridgewater chairman Ray Dalio addressed attendees at the Federal Reserve’s Central Banking Seminar in New York City, and his remarks were posted on LinkedIn. Dalio offered his perspective as an investor operating in what he called “the very unconventional circumstances that we face.” He described an economic backdrop of low productivity growth […]

Paltry Returns May Be Here to Stay

The low-return environment that currently exists for investors (notwithstanding the increased risk they are assuming) could be “on the menu for years to come,” says London-based Fixed Income Research Analyst Lior Jassur in a recent article for Barron’s. While short term volatility could create investment opportunities, Jassur argues that in the long term most investment […]

Cyclicals in the Lead

As the quest for yield continues, investors are favoring stocks over bonds. However, over the past few months they have shown an increased appetite for stocks that are more sensitive to economic growth—such as financials, energy and technology companies—versus those in the more defensive utility and telecommunications sectors. Validea CEO John Reese shares his insights […]

ETF Due Diligence: What to Look For

When shopping for an exchange-traded fund (ETF), there are some things worth checking out. In a recent blog for Barron’s, Chris Dieterich offers a checklist: Most investors should focus on the simplest ETFs. Big funds are usually the best option, but all are not necessarily created equal with respect to the mix of holdings. Make […]

The “Wizard of Wharton” Looks Ahead

In a recent interview with ThinkAdvisor, finance professor (and senior investment strategy advisor to Wisdom Tree Investments)  Jeremy Siegel shares his view on a host of issues affecting current market conditions: Presidential election: The stock market would be “a little more comfortable with a Clinton victory, but they don’t love her at all.” With regard […]

When Choosing Fund Managers, Maybe Less is More

It may pay to go for mediocre rather than stellar when selecting fund managers, according to last week’s post in Enterprising Investor by Joachim Klement, CFA. While studies have shown that investors gravitate toward funds that have performed well versus their peers, Klement suggests that more sophisticated investors (such as pension funds) might be expected […]

Cash Rich Stock Picks

The tendency for major corporations to stockpile cash after the financial crisis seemed like a reasonable strategy, but according to recent data reported by FactSet, the trend hasn’t changed much. In his latest article for TheStreet, Validea CEO John Reese outlines some possible explanations and describes how our guru-based investment strategies (particularly that of Warren […]

Overseas Blue Chip Picks

Currently stretched equity valuations, an imminent presidential election and a probable December rate hike are fueling uncertainty in the markets. Validea CEO John Reese, in a Forbes article appearing yesterday, outlines issues that could support the notion of increasing international stock holdings as part of a balanced investment portfolio. “Europe is facing a number of structural […]

Does a Manager’s Track Record Matter?

While it may be logical to assume that a more experienced fund manager would have a better performance record, it isn’t necessarily so. This according to a recent study from the Cass Business School in London, the results of which are reported in Chief Investment Officer this month. Andrew Clare, a professor of asset management […]

Stock Picks Based on Quant Strategies

As hedge funds continue to lose clients due to lackluster returns, purely numbers-based investment strategies are gaining popularity. Validea CEO John Reese speaks to the trend in a Nasdaq article published last week. Like those of our guru-based screening models, these strategies are built purely on the underlying fundamentals of a business. The following picks […]

The Elite Edge in Market Performance

Elite university endowments, such as those of Harvard and Yale universities, have been the envy of many for years, writes Bloomberg’s Nir Kaissar. But things have changed. Notwithstanding the “countless resources and connections and clever analysts,” he writes, those endowments have not performed much better than a traditional 60/40 portfolio of U.S. stocks and bonds. […]

The Monster of Uncertainty

This phrase was coined by a Dutch professor to describe how the scientific community views uncertainties in the natural world. In a recent Advisor Perspectives article, Scott MacKillop of Denver-based First Ascent Asset Management, relates the metaphor to the financial markets. Unlike in environmental science where there are hard and fast rules (gravity, planetary motion, […]