A myopic focus on investment returns is bad for your wealth

Compounded annual returns are the crack of the investment world. Wall Street is the pusher and investors are the addicts. Investment companies and investors focus on the annual return metric as the most important in a portfolio to the long term detriment of most investors. This myopic focus on annual returns is bad for investors’ wealth wether they are in…

Continue Reading

Increasing returns, lowering risk in GTAA portfolios

Warning. This post is kind of a finance geek out. I’ll try and keep it as basic as possible but I apologize in advance if I cause any heads to hit the keyboard… In this post I’ll take a look at impact and potential benefits of adding volatility weighting and mean-variance optimization to tactical asset allocation portfolios similar to the…

Continue Reading

Stock correlations at all time high

I’m sure it won’t surprise many value investors that stock correlations are at an all time high. It’s not like value investors need even more challenges thrown in their face. There were two posts late last week that showed data on this rise in correlations. Lets take a look. First, Birinyi Associates had the following chart posted on their blog.…

Continue Reading

Yet another reason to own MLPs – lower risk

MLPs offer attractive tax-deffered yields and total returns. MLPs have handily outperformed the S&P since 1996 and look to continue to do so. With the emergence of unconventional oil and natural gas plays in North America the sector is also in major growth mode. But most investors think that MLPs are higher risk – after all we’ve all been brainwashed…

Continue Reading