Posts filed under “Asset Allocation”
Source: AAII, FusionIQ
Last week, we noted the US Equity markets have been outperforming the rest of the world by a huge margins (Spot the Outlier).
This may be contributing to circumstances where US investor allocations are overweight US equities, and underweight other asset classes.
In these circumstances, you might consider looking at Europe and Emerging markets, and (dare I say it) review your Bond Weightings. I keep seeing portfolios that are underweight Corporate Bonds (which may be needed) as well as High Yield (but only if you have the risk tolerance for it).
Thanks to their price appreciation, As a percentage of holdings, Equities are no longer
over Under-owned. However, as we saw in the 1990s, they are not excessively over-owned yet. This condition could go on for many years. . .
Source: Capital Spectator A few weeks ago, I spoke at an Financial Advisor conference in Denver. There was some concern about asset allocation returns — it seemed that the more diversified you were, the worse your performance numbers were. Josh quoted a financial advisor who lamented: “Why bother diversifying at all? It’s just a drag…Read More
Click for ginormous table
Source: J.P. Morgan
I really like the above table — its a terribly instructive reminder as to how little we know about the future. Look how often the sector you least expected to be the winner ended up on top.
Its also instructive to see what ends up near the top of the list on a regular basis.
The breakdown of Fixed Income annual winners is after the jump.
Category: Asset Allocation
Reducing Energy Weight David R. Kotok Cumberland Advisors, July 29, 2013 Last week we reduced our energy exposure to underweight. It had been overweight for a while, and we successfully participated in the rebound in natural gas prices and the narrowing of the spread between Brent and WTI (West Texas Intermediate) oil. It…Read More
Click to enlarge GMO 7-Year Asset Class Real Return Forecasts: 2007 Have a look at the charts above and below. They are from James Montier’s GMO Quarterly Letter, July 2013, titled The Purgatory of Low Returns; you can download the full PDF here (registration may be req’d). (Note to Josh: This quarter, Ben…Read More
We have all seen the standard depiction of asset allocations — I thought this version — via UBS — was a more interesting depiction of the usual chart. Click for ginormous graphic Source: UBS House View, July 2013 Mike Ryan Monthly Investment Guide CIO Wealth Management Research
Category: Asset Allocation
Missing the big stocks rally: Readers push back Barry Ritholtz, Washington Post June 28 2013 Last time, I talked about what investors should do if they sat out the big market rally in recent years. In brief, I advised making changes of both a behavioral and investing nature. The behavioral issues included admitting…Read More
Yeah, this time it was my fault — in the midst of a long conversation about taking the emotions out of investing and making finance boring, I dropped a line about cat food tacos. So once again I am in the click bait headline machinery.
It looks something like this:
Have a plan.
Execute it faithfully.
Max out tax-deferred accounts.
Be an asset allocator.
Not exactly radical, but “Cat Food Tacos” will generate a lot more clicks than “invest boringly.”
Here’s the video:
Source: Ritholtz: You Can “Eat Cat Food Tacos In Retirement,” Or You Can Do This… (Yahoo Finance)
> Two weeks ago, I managed to anger quite a few people with a Washington Post column titled: Missed the big market rally? Here’s what to do now. There were a variety of perturbed commenters both here and at WaPo as well as angry emails and assorted bemused tweets. While lots of readers, commenters…Read More
I am not sure I fully agree with this BlackRock chart — there are times when cash makes sense. However, I cannot disagree with the takeaway that you cannot sit in cash for very long stretches of time (years) and expect any sort of return above inflation. Click to enlarge Source: BlackRock