http://www.capitalspectator.com/WM/ en-us Copyright 2008 Tue, 21 Oct 2008 08:44:47 -0500 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss 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. ]]> http://www.capitalspectator.com/WM/2008/10/can_it_happen_here.html http://www.capitalspectator.com/WM/2008/10/can_it_happen_here.html Tue, 21 Oct 2008 08:44:47 -0500 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. ]]> http://www.capitalspectator.com/WM/2008/08/extreme_bonding.html http://www.capitalspectator.com/WM/2008/08/extreme_bonding.html Tue, 12 Aug 2008 09:03:35 -0500 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. ]]> http://www.capitalspectator.com/WM/2008/07/strategic_possibilities.html http://www.capitalspectator.com/WM/2008/07/strategic_possibilities.html Tue, 29 Jul 2008 07:50:23 -0500 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.]]> http://www.capitalspectator.com/WM/2008/06/lets_go_global_again.html http://www.capitalspectator.com/WM/2008/06/lets_go_global_again.html Mon, 23 Jun 2008 08:26:46 -0500 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. ]]> http://www.capitalspectator.com/WM/2008/06/harry_markowitzs_56yearold_por.html http://www.capitalspectator.com/WM/2008/06/harry_markowitzs_56yearold_por.html Mon, 16 Jun 2008 08:54:28 -0500 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.]]> http://www.capitalspectator.com/WM/2008/05/back_to_the_futureagain_1.html http://www.capitalspectator.com/WM/2008/05/back_to_the_futureagain_1.html Wed, 14 May 2008 08:39:23 -0500 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.]]> http://www.capitalspectator.com/WM/2008/05/there_will_be_oil.html http://www.capitalspectator.com/WM/2008/05/there_will_be_oil.html Wed, 07 May 2008 08:59:42 -0500 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.]]> http://www.capitalspectator.com/WM/2008/04/steady_as_she_goes.html http://www.capitalspectator.com/WM/2008/04/steady_as_she_goes.html Thu, 17 Apr 2008 08:34:46 -0500 March 2008, Wealth Manager
Who’s the newest player in the alternative investing business? Vanguard, of course. By James Picerno Mention the name Vanguard and while several images come to mind in the world of money management and fund companies, alternative investing probably isn’t among them. Low-cost indexing? Sure. Several well-regarded actively managed mutual funds? Yep, those too. And a growing list of ETFs targeting conventional betas? Absolutely. ]]> http://www.capitalspectator.com/WM/2008/04/a_sign_of_the_times.html http://www.capitalspectator.com/WM/2008/04/a_sign_of_the_times.html Mon, 07 Apr 2008 08:37:28 -0500 March 2008, Wealth Manager
Is it also smart as a strategic portfolio holding? By James Picerno Foreign exchange can be a quandary for investment strategy. Currencies generally suffer an expected return of zero in the long run, a shortcoming that raises questions about the strategic value of the asset class. But for shorter periods, forex risk can enhance portfolio diversification and boost risk-adjusted performance. Whatever their charms, currencies in pure form traditionally have had limited appeal for the wealth management business. To the extent that investment strategy for individual clients has embraced forex, it’s usually tapped indirectly—almost as an afterthought—through allocations to unhedged positions in foreign stocks and bonds. ]]> http://www.capitalspectator.com/WM/2008/03/forex_is_hot.html http://www.capitalspectator.com/WM/2008/03/forex_is_hot.html Tue, 04 Mar 2008 08:57:20 -0500 February 2008, Wealth Manager
It’s an election year, and politically charged tax talk is back. As an antidote, we offer a brief review of tax history. By James Picerno This being a presidential election year, taxes are topical all over again. As an added incentive for chattering about fiscal matters generally, there’s a vigorously rising price tag for government programs— notably Medicare and Social Security—and questions about how to pay for the bills going forward. Indeed, the government budget is firmly in the red. As if that combination wasn’t sufficiently provocative and challenging, the Bush tax cuts enacted a few years back are set to expire in 2010 unless Congress intervenes. ]]> http://www.capitalspectator.com/WM/2008/02/remembrance_of_taxes_past.html http://www.capitalspectator.com/WM/2008/02/remembrance_of_taxes_past.html Mon, 04 Feb 2008 09:18:31 -0500 January 2008, Wealth Manager
Does thinking in risk-adjusted terms increase the supply of alpha? By James Picerno Alpha is widely viewed as a zero sum game, and so for every investor who beats the market, someone must trail it. If this balancing act accurately describes how the money game works, there’s a limited supply of alpha—which is to say something other than beta. And of this finite quantity, then only half is positive alpha. ]]> http://www.capitalspectator.com/WM/2008/01/rethinking_zero.html http://www.capitalspectator.com/WM/2008/01/rethinking_zero.html Fri, 18 Jan 2008 09:53:45 -0500 January 2008, Wealth Manager
A strategist discusses why alpha’s horizons may be broader than you think. By James Picerno Chess is one example, poker is another. But is investment alpha a zero sum game, too? Do the winners in money management always triumph at the expense of the losers? ]]> http://www.capitalspectator.com/WM/2008/01/a_question_of_supply.html http://www.capitalspectator.com/WM/2008/01/a_question_of_supply.html Fri, 18 Jan 2008 09:12:38 -0500 December 2007, Wealth Manager
Portfolio strategy that neglects foreign bonds may be comfortable, but it can be costly, too. By James Picerno Stocks and Bonds, Bonds and Stocks. Asset allocation starts with this fundamental mix, and for good reason. Low correlation prevails between the two asset classes—and for enduring economic reasons. No wonder that adding bond exposure to a portfolio of stocks usually brings superior risk-adjusted expected returns compared to owning either asset alone. ]]> http://www.capitalspectator.com/WM/2007/12/bond_world.html http://www.capitalspectator.com/WM/2007/12/bond_world.html Wed, 19 Dec 2007 08:47:18 -0500 December 2007, Wealth Manager
Indexing versus active management is an old debate, but the details are forever new. By James Picerno IndexIng has been known to rouse strong opinion, both pro and con. Some accept it unconditionally, and others reject it entirely. But many—perhaps most—investors steer clear of absolutes and own both active managers and index funds, or at least allow for the possibility. Muddled thinking? Perhaps, although a recent study suggests there’s cause for keeping an open mind. ]]> http://www.capitalspectator.com/WM/2007/12/gray_areas.html http://www.capitalspectator.com/WM/2007/12/gray_areas.html Mon, 03 Dec 2007 08:40:12 -0500