Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.
Recently I was reading a special Spotlight issue of Proactive Advisor Magazine, a free weekly magazine dedicated to promoting and educating the adviser community on active investment management. The issue focused on the active versus passive management debate. It contained three short articles by a researcher, a member of an investment performance database and publishing firm, and a behavioral finance professor. All concluded that active management should coexist with passive management, but for different reasons.
Like a skeleton found in a closet, investors discovered in the first quarter of 2020 that their portfolios were not being managed in the manner in which they had believed.
Doris Day, a top box-office draw of the 1950s and early ’60s, has always been one of my favorite entertainers.
Since I began investing in the late 1960s, I have always been in the active investing camp. When I started Flexible Plan Investments, Ltd., in 1981, the only investment services we offered were active management (and that is still true today). I thought an investment manager should be “flexible” rather than locked into a rigid buy-and-hold approach.
I was listening to one of my favorite early morning radio shows last week. While it offers hard national and local news, it also features some lighter lifestyle stories. That can be a welcome change of pace these days.
Watching the NFL playoff games this past weekend, I noticed the winning teams’ quarterbacks got much of the credit and much of the press. But there are 53 players on each team’s roster and many more behind them contributing to each team’s success.
Over the years I have written about “Plan B Investing” and “Just-In-Case Investing.” Both of these are similar but different.
This week I was listening to an expert on investor psychology who stated, “Investors feel comfortable investing when markets are behaving as they expect.” That made me think about the piece I recently wrote about the emotions of fear, uncertainty, and doubt (FUD) and their often negative influence on investors’ decisions.
I wrote an article before Thanksgiving that, in part, praised the efforts of frontline medical workers, first responders, teachers, and others for their efforts during the 2020 pandemic. We all remain thankful for their outstanding efforts this year.
Additionally, our thoughts go out to all who have had medical, employment, or financial issues during this crisis, especially as we come up to the holiday season.
When we think of our lives or just talk about what we have been doing lately with a friend, we tend to focus on big events. If we have just started a new job or a baby was born, the event dominates our conversations. Similarly, in the news, election and pandemic news can consume the headlines and color what we think is occurring around us.
Today I’d like to discuss the concept of strategic diversification (investing in multiple investment strategies to diversify among asset classes, methodologies, and time frames) in the context of the current market environment.
Some of you may be surprised at how the Dow is performing compared to the other major stock market indexes—not only this year, but also over the past one year and three years.
This column has explored the topic of risk management in some detail over the years, addressing several questions:
• Are the retail investor and financial adviser underserved by the buy-and-hold philosophy?
• What is the potential role of dynamic risk-managed strategies in investors’ portfolios?
• How might modern, risk-managed portfolios be best constructed on a conceptual level?
Last fall I wrote a couple of articles about how the financial industry and press may have been premature in reporting on the death of so many industry strategy favorites (you can read them here and here). The 60/40 balanced portfolio, value investing, hedge fund, and momentum strategies were all discussed.
I don’t know whether you are in a state that is beginning to get out from under a stay-at-home order or if you are, like us here in Michigan, still very much in the shelter-in-place mode. But one thing I am certain of—you want to get out of the house and do something. Anything!