Hedge Funds on the Comeback?

My latest for Alpha Baskets considers an argument for why hedge funds could make a comeback. My interest is more along the lines looking at various diversifiers which includes hedge fund replicators available in ETPs. From the post; Long/short is obviously just one strategy in the hedge fund realm and clearly there is no way to know what future results will be but the return and volatility numbers reported in the chart would seem to say that this space should be investigated further if you have not been using some form of hedge fund replication as part of your strategy for diversifying your equity exposure. Please click through to read the entire post....

US Loses Monopoly For Kicking The Can

This week’s market update is posted at Alpha Baskets and include the following; If you’re not sure what the big deal is about Greece, it is generally viewed that if one struggling country leaves the union or otherwise fails it would open the door to other struggling countries to leave which would undermine the entire EU. Please click through to read the entire update.   Why wouldn’t this be parked at the side of the road in Wilhoit,...

All Time Highs But Is There Trouble Brewing?

The Weekly Market Update is posted at Alpha Baskets and looks at narrowing leadership in the equity market, Sweden going negative on its interest rates and ongoing oil market volatility. Barron’s picked up the conversation over the weekend noting that of the reported 4.1% rise in S&P 500 earnings year over year, half the gain can be attributed to the maker of iPhones and iPads. In other words the “S&P 499” as the magazine referred to it has only had earnings growth of about 2%. The significance of narrowing leadership, the market being supported by fewer and fewer names, is that this usually occurs at market tops most notable at the end of the internet bubble. Please click through to read the entire...

Financial Rules For A Simpler, Happier Life

The Wall Street Journal shut down its Sunday edition with a couple very good financial lifestyle articles, one from Jonathan Clements and the other from Brett Arends. A lot of what is there are ideas we have covered here many times before and I am sure they have covered them many times before but they are worth repeating because they are important. I had a conversation with a client the other day that was focused almost solely on financial lifestyle as opposed to anything to do with the market and that is very common type of conversation for an advisor to have and this makes sense. Having money for your goal (usually retirement) is far more important than your investment results in some random month, quarter or even year. Highlights from Clements list included being humble, living in cheap housing and eliminating your commute. Being humble relates to accepting the low probability of beating the market. Over time there will be periods where you beat the market and periods where you don’t. What is important is sticking to a strategy that you can live with, gives you a decent chance of reaching your goal (provided you save adequately) and then avoid doing self-destructive things like selling after a large decline. Living in cheap housing is obviously living below your means. It can’t be stated often enough the extent to which this sort of flexibility can spare you heartache and stress in the face of some form of financial adversity. Kind of related, Clements says to not work just for a paycheck. He makes two points with this one but I...

Crude Roller Coaster

The Weekly Market Update is posted at Alpha Baskets and includes the following; As wild as the ride was for West Texas Intermediate Crude in the last week of January, it went on an even wilder ride this past week rallying more than 11% on the week despite an approximate 8% decline on Wednesday. Bearish arguments seem to focus on supply while bullish arguments center on lack of viability if prices go too low (companies would go out of business and the price would rocket higher). While we will leave the predictions to other people we do believe the increased volatility is important to follow closely. Please click through to read the entire post....