17 September 2016

Top 40 Wealth Managers in USA

Nice job Barron's Magazine, but pretty useless table, no information on performance, fee structure. So a lot of work but the crucial data is missing. Bigger is not better!

12 August 2016

Market Professionals at an advantage

Any Retail Investor, small or of 'high net worth' should watch the activities of investment professionals like a hawk. Market Insiders always have an information advantage that can allow them to charge higher fees or find excuses for under performance. 
The Dirty Little Secret of Finance: Asymmetric Information (Bloomberg)
Information asymmetry: Secrets and agents (The Economist)

14 June 2016

Smart Beta - Old Wine in new Bottles

Be careful not to be taken in by fashionable slogans. Smart Beta is currently pushed by Asset Managers but basically it is nothing else than Style Investing - and that idea has been around for decades! The problem is of course that you still have to select the right style/strategy.

11 June 2016

Chinese Shares - ready for Mum and Dad?

News that a commercially-driven entity may decide how billions of investor's savings are deployed in the fast-growing Chinese Equity markets should set alarm bells ringing. After all, China is still in the grip of a communist dictatorship. Recent economic growth may well be impressive - unless you are belonging to the millions who have been pushed out of employment by cheap Chinese labor - but that should not mean that question of morality and fair play are forgotten in order to lure investors into a market that is anything but transparent - at least not as far as 'Western' Investors and Savers are concerned. Allowing index designers free reign over the fate of our Savings is totally irresponsible.
China's A-Shares Prepare to Flood Your ETFs (Barron's)

31 May 2016

Buy and Hold - good strategy - esp with benefit of hindsight

We all can see that buying in the distant past - be it stocks, property or gold - was a good strategy that paid off in spades. It may well still be the best strategy for future investments - especially given how difficult market timing can be, for the amateur investor but also for the professionals.
But blindly buying and holding per se is not a strategy, I would rather tend to call it a guideline around which the really difficult investment choices have to be made.
The not-so-secret way millionaire investors get way richer (Yahoo)

29 May 2016

End of Hedge Funds?

Gloom and Doom may work for Marc Faber but it should not overshadow rational analysis of the Hedge Fund Industry.
Performance comparison with the S&P means to compare apples with oranges. And there are many different strategies that all have to be looked at from a different angle.
Costs have - and continue to be - high and it is not clear why megafunds should be able to charge fees of up to - and in extreme cases more than - 2 percent and at the same time charge performance fees of around 20 percent, often without application of any reasonable hurdle rate.
What has to - and will - happen is that the structure of traditional asset management and hedge fund management will slowly get unified.
Exceptional managers may be able to receive higher fees, but even in the traditional asset management space there is a wide variety of fee levels that investors seem to be happy to accept.
Careful scrutiny will be the order of the day when looking for 'active' managers. The trend to passive investing may continue for a while longer, it will stabilise when the passive part of assets under management reaches the 60-70 percent range. Sharp competition for the remaining 40-30 percent of the asset management cake will lead to a compression of fees.
Performance fees - not only for hedge fund managers, but also for private equity and other alternative fund structures - are problematic in any case. For good reason US regulators placed severe restrictions on their use until the mid-1980s. The way they are structured gives too much of a one way option for the providers of asset management services.
It may be the end of hedge funds as we know it (Business Insider)

5 April 2016

Understanding Convertible Bonds (IPE)

How many Funds do you need for a diversified Portfolio? (CNN)

Convoluted Investment Fraud sucks in 'Sophisticated' Investors (Bloomberg)

29 March 2016

How to pick a Financial Adviser

It could be the most important decision you make in your life (after selecting the right spouse and finding a career that is fulfilling)
How to pick a Financial Adviser (Washington Post)

27 March 2016

Fraud Watch

Credit Suisse, the Jailed Banker and the Oligarch's Millions (Bloomberg)

26 March 2016

Masters of the Universe or Men of Clay?

Do not get seduced by glamorous names or 'sexy' investment stories. The recent implosion of the much hyped Valeant should be a warning.