Investment Strategy Insights

Value (investing) is dead. Long live value investing. Such certainly seems to be the mantra as investors continue to pile into growth stocks while rationalizing valuations using methodologies which historically have not worked well.

The recent insanity in capital markets has captivated much of the financial world. Anecdotes of borderline degenerate gamblers up 100, 200, 300 percent in mere weeks by trading recent or upcoming bankruptcies can be heard far and wide.

As someone who has spent his entire career in the financial services industry, I get a lot of requests from friends and family to help them understand how to allocate their 401k plans. Sometimes we forget the industry has its own language and the lay person, who wants to learn and grow, does not find it easy to get the information they need to make the appropriate allocations.

As someone who has spent his entire career in the financial services industry, I get a lot of requests from friends and family to help them understand how to allocate their 401k plans. Sometimes we forget the industry has its own language and the lay person, who wants to learn and grow, does not find it easy to get the information they need to make the appropriate allocations.

Doing well by doing good is a wonderful investment theme. In a wild and crazy world with high uncertainty and widening income inequality, I wanted to focus on a key investing trend that is only gathering more momentum as time goes by.

Most pension plans and other institutional investors with long-term liabilities are faced with an enormous mismatch between the return assumptions in their actuarial models and the combination of sky-high equity valuations and rock-bottom bond yields. Some have chosen to address their funding gaps by adding leverage to their portfolios

In an era of near zero interest rates, few investors have sufficient retirement savings to live off the income produced by a portfolio of low-risk bank deposits and Treasurys. Investors can strive to address this shortfall by reaching down the scale of fixed-income credit quality (to aptly named “junk” bonds) or through exposure to high volatility, high-yielding alternative asset classes.

In an era of near zero interest rates, few investors have sufficient retirement savings to live off the income produced by a portfolio of low-risk bank deposits and Treasurys. Investors can strive to address this shortfall by reaching down the scale of fixed-income credit quality (to aptly named “junk” bonds) or through exposure to high volatility, high-yielding alternative asset classes.