It’s the weather, they say. The loss of 36,000 jobs in last month’s nonfarm payroll count may have been a victim of the snow, the Labor Department advises with this morning’s release of the February employment report. The unemployment rate, at least, was unchanged last month, albeit at a high 9.7%.
September 2008, Wealth Manager
Has the Treasury market stumbled in anticipating inflation? Does it even matter?
By James Picerno
Inflation is upwardly mobile again, or at least it was before the financial crisis exploded. Pricing pressures may fade until the economic and financial ills stabi¬lize. Regardless of inflation’s future path, the jump in consumer prices in the past several years seems to have caught inflation-indexed Treasuries, a.k.a TIPS, off guard. That has led some observers to question the bonds’ merits as inflation hedges. But such worries are misplaced even though TIPS have been less than dependable as a window on prospective inflation.
September 2008, Wealth Manager
The allure--and complications--of foreign exchange-listed hedge funds.
By James Picerno
Wealthy individuals and institutions dominate
hedge fund investing, but the mainstreaming
of these products rolls on.
Strategies that traditionally have been
available only in the shadowy world of privately offered
hedge funds are increasingly popping up in mutual funds
and exchange-traded products. A recent example is
JPMorgan’s June launch of the first exchange traded note
that hugs a 130/30 index—a popular long/short strategy
in the alternative investment space. There’s also a growing
list of so-called publicly registered hedge funds and managed
futures funds with relatively low minimums.
July/August 2008, Wealth Manager
For one wealth manager, bonds are the only game in town.
By James Picerno
Asset allocation? Don’t even think about it, says
Stan Richelson of the Scarsdale Investment
Group, Ltd., a Blue Bell, Pa. wealth management
shop that he runs with his wife, Hildy. The only
sensible strategy, he insists, is all bonds, all the
time, for all clients.
July/August 2008, Wealth Manager
Will "new and improved" indices enhance asset allocation?
By James Picerno
If you build better indices, the possibility of enhancing
asset allocation strategies naturally follows. Why,
then—in a world that’s minting a new generation of
benchmarks at a record clip—isn’t there more discussion
of the opportunities for improving portfolio design?
Whatever the answer, it’s not for lack of choice.
June 2008, Wealth Manager
If you think TIPS are the last word in inflation-linked government bonds,
think again.
By James Picerno
Inflation respects no political border, which means
that targeting inflation-linked bonds on a global basis
is a natural for investing strategy. It’s also timely.
Pricing pressures are bubbling in economies around
the world. Consumer prices in OECD countries (a proxy
for the developed world) rose by 3.5 percent in the year
through this past January—the highest pace since 2001.
Inflation is also on the rise in emerging markets, including
China, which reported an 8.7 percent jump in consumer
prices for the year through February—up sharply from 2.7
percent for the same period a year earlier.
June 2008, Wealth Manager
Is modern portfolio theory compatible with socially responsible investing?
By James Picerno
Harry Markowitz’s 56-year-old portfolio-optimization
theory may be middle aged, but it’s forever young
in the service of tackling the investment challenge
du jour.
May 2008, Wealth Manager
The financial literature now favors active asset allocation, but it's still risky.
By James Picerno
It has been fIve years since
veteran investment consultant and celebrated
author Peter Bernstein invoked
the word “obsolete” to describe the policy
portfolio, which encourages fixed weights
for multi-asset class investing strategies.
By contrast, dynamic asset allocation is
the superior alternative, he argued in a
widely discussed 2003 article in his newsletter
Economics and Portfolio Strategy.
May 2008, Wealth Manager
Seven fat years haven’t changed Matt Simmons’
bullish view of the world’s most important commodity.
By James Picerno
Sure, it’s easy to be an energy
bull now—after seven years of rising prices.
But it was a lonely job in the late 1990s,
when a barrel of crude oil changed hands
in the $10-to $20-range.
April 2008, Wealth Manager
Macroeconomic risk has been low for 20 years. Will the calm survive a stormy 2008?
By James Picerno
Recessions are inevitable. It’s
the timing and depth of economic contractions
that keep everyone guessing.