Forget Asset Allocation, says Glenmede’s CEO

Stock-picking is still in vogue with Gordon Fowler, CEO of the $24 billion Glenmede Trust fund. A recent Barron’s article describes the process employed by his team. “Every morning, Fowler assembles his wealth advisory group simply to brainstorm about individual stocks and come up with smart client moves.” According to Fowler, deep analysis of equities makes more sense than picking broad asset allocations. “In this environment,” he says, “stock mispricings are bound to arise, and trying to make money through asset allocation becomes progressively more difficult.” His team looks for stocks with “reasonable” valuations, a strong chance for further profits […]

Diversification: The Only Free Lunch on Wall Street

The value of long term asset diversification, sometimes known as “the only free lunch on Wall Street” is discussed in a recent MarketWatch article offering “Five Steps to Beating the Market.” “Stock investors typically regard ‘the market’ as essentially the Standard and Poor’s 500 Index of large U.S. growth stocks.” The article tracks and summarizes financial performance records since 1928 for large-cap blend the (S&P 500), large-cap value, small-cap blend, small-cap value stocks and a four-fund combination of these asset classes. In every summary, the four-fund combination produced a superior return to the S&P 500 alone. However, the price investors […]

Faber talks Strategies, Value in Emerging Markets and More

Mebane Faber, co-founder and CIO of Cambria Investments and Cambria Funds talks with Tom Keene and Barry Ritholtz about quantitative stock selection strategies and investment trends in today’s market. According to Faber, so far in 2016 the market is seeing a rebound in some of the assets that exhibit the most value around the world. In addition, dividend paying stocks, which have performed very well over the past few years as investors seek income, look relatively expensive on an historical basis, says Faber. Typically, they trade at a 20% discount to the market but right now they are trading at […]

Risk and Asset Allocation

In a piece written for Forbes’ Intelligent Investing section, David Serchuk today offers some interesting data on risk and portfolio management. One point made by several of those Serchuk interviewed is that asset allocation is a crucial, and often overlooked, key to managing risk. “The macro-picture here is that asset allocation remains an easy way to get to the core of your portfolio’s risk exposure, even though it gets relatively little attention in the financial media compared with earnings or, to use a more contemporary example, government bailout money,” writes Serchuk. Support for this idea comes from a study conducted […]

Mortimer on “The Most Dangerous Words in Investing”

Charles Schwab Investment Management’s Chief Investment Officer Jeff Mortimer offered some interesting thoughts on the current market and keys to a good investment strategy in a Q&A with Washington Post readers today. One key thought from Mortimer, when asked whether his advice takes into account potential unprecedented events or situations: “The most dangerous words in investing are ‘it’s different this time.’ The world has had many issues before, and will again. It is important to study history and learn from it, knowing that it will never repeat exactly, but should be somewhat similar. The best advice to always follow must […]