28 April 2017

Checklist: Is your Private Banker/Fund Manager in the same boat?

Interesting question to ask when you do due diligence on your Private Banker or Fund Manager!
Is your Private Banker/Fund Manager in the same boat?

26 April 2017

Performance Comparisons: Danger of first Impression

Fund Supermarkets (or Platforms as they are sometimes called) are a massive step in the right direction, i.e. giving private investors more control over their investments. But apart from the problem that each one of these sites can only cover so many funds the performance comparisons can be difficult to interpret. In the example below one would have to know what exactly is meant when a Sterling bond fund is having the 'Extra Yield' words in its name. Does it really make sense to compare it to the Investment Association's 'Strategic' Sterling bond fund? Is one comparing apples and oranges? However small the difference between the two, the verdict on the fund could be heavily influenced by it.
Royal Sterling Extra Yield Bond Fund - Analysis by Hargreaves Lansdown

25 April 2017

Robo-Advisers - useful but not ultimate Solution

Robo-Advice - like the (related) growth in 'passive' investment strategies and vehicles - can be a worthwhile addition to any investor's toolbox. But the devil is in the detail - apart from the 64000 dollar question (The selection of the right investment strategy, sector etc) most Robo-Advisers (or Websites) can only cover a limited amount of available investment products. In the case of the recently-launched eVestor I notice with interest that they claim they 'invest with the largest investment companies in the world'. All very honest, but bigger is not always better!

19 April 2017

You cannot eat Relative Performance

In the world of institutional investment management beating the performance benchmark is the holy grail. When a fund loses money it is sufficient to lose less money than peer funds. But as a private investor you cannot be that complacent. You cannot eat relative performance. So the fact that the average 'Quantitative' or 'Systematic' fund is down during the past year is no consolation/. If you were sold on the idea that they offer performance that is not correlated with the big market indices you may well wake up to the fact that there is no surefire way to escape market volatility.
What’s wrong with AQR? - ValueWalk

14 April 2017

Long/Short Hedge Funds - did they provide what it says on tin?

The overall performance may have been disappointing with the main explanation (or excuse) the fact that QE distrorted the markets. The flood of money created a one-way street in the markets and hedge funds claim they are not geared up to be compared to long-only funds that profited from the bull market.
But one thing is forgotten in all this: while one may accept that hedge funds are not designed to compete with traditional funds the L/S funds should be able to navigate RELATIVE price moves in the markets and slowly accumulate profits while holding the market exposure broadly neutral. Careful performance analysis should shed light on the skill of the fund manager and how well they kept the portfolio in a market neutral (and therefore low risk) state.

Fees on Alternatives expensive - Report

While Alternative Investments may offer good diversification they are unfortunately priced too expensively to offer a good risk/reward ratio. Performance - esp in Private Equity - may look attractive but remember that we experienced a long bull market that lifted all (asset) boats.
Complex Investments in Alternatives expensive

13 April 2017

Turkey To Confiscate Gold "To Help Citizens Earn Money"

Apart from the fact that Turkey cannot be compared to your typical 'Western' or 'Liberal' Democracy the lesson is again quite clear: if you think your wealth is protected in Gold you better think carefully how to go about it! (Hint: Bitcoin it is not!)
Turkey To Confiscate Gold "To Help Citizens Earn Money"

Passive Investing Will End In Pain

Index Investing, ETF's, commonly called 'Passive Investing' are no panacea as they mean that you will participate in any market decline to the fullest extent.
Passive Investing Will End In Pain

Checklist: How is your Financial Adviser compensated?

Poor compensation structures for your Financial Adviser may create incentives that are contrary to your interests!
Excessive focus on individual performance is inherently dangerous, says Barry Olliff | City A.M.

Active managers - not that bad

While quite a few 'active' fund managers hug the indices and charge fees as if they are trying to beat them not all is that bad as it is portrayed by some critics. Any fund manager needs to charge a fee as nothing can be provided for free. So performance really cannot be measured after fees, expenses. It is by definition a must that the universe of fund managers will under perform any index by the amount of costs loaded onto the funds they manage. Maybe these fees are rightly deemed to be too high but investors should not be brainwashed by the community of passive fund promoters. You get what you pay for, in this case the chance (hope?) that your manager will outperform the benchmark.
Bad times for active managers: Almost none have beaten the market over the past 15 years

12 April 2017

Ordinary Investor has no Chance against Market Insiders

Just ask your Financial Adviser: Where are the Customer's Yachts?

Federal Reserve's Fischer held private talk at Brookings - Business Insider

10 April 2017

Diamonds, Rolex Watches are ludicrous "Investments"

Don't fall for the relentless attack from slick advertising! Artifical Diamonds are soon taking over, and Rolex watches are produced by the hundreds of thousands!
An "Investment" Even More Ludicrous Than Government Bonds | Zero Hedge

8 April 2017

EU watchdog wants tougher conditions for credit ratings compiled outside EU

Just shows the EU up for what it is - a protectionist racket run by unelected control-freaks! More oversight of Rating Agencies might be a good idea, esp. the pay-to-play formula forced upon issuers but no, that would actually make sense!

EU watchdog wants tougher conditions for credit ratings compiled outside EU

David Rosenberg: "This Is A Bubble Of Historic Proportions"

No need for an overpaid 'Analyst' to tell us that!

David Rosenberg: "This Is A Bubble Of Historic Proportions"

7 April 2017

Unelected bureaucrats steal from Savers, Investors

Crazy, worse than Organised Crime, this is State-sponsored Crime!

The Next Step In Europe's Negative-Interest-Rate Experiment | Zero Hedge

Vontobel quält alte Berater mit Mathe-Test

With some Banks Swiss Private Banking is in steep decline, these exams will do nothing to improve the service (if you can call it that) customers (just don't call them clients anymore) can expect.
Vontobel quält alte Berater mit Mathe-Test - Inside Paradeplatz

6 April 2017

Don't Mourn the Death of Stock-Picking Just Yet

There will always be stock-picking, if the average does not outperform there will be losers and winners in the stock market game, and who does not think he could win? Given human nature there will always be lotteries, horse-betting etc. So investors have a choice and decide which attitude suits them. If they think they can win they should pick fund managers that can win.
Don't Mourn the Death of Stock-Picking Just Yet

4 April 2017

Saudi Aramco might be worth just $1 trillion

And has anyone given some thought to the (enormous) political risk?

REPORT: Saudi Aramco might be worth just half of the $2 trillion suggested by Saudi officials

3 April 2017

Saturated Managers close their Hedge Fund

One of the factors not often mentioned - when a manager has made (tens? hundred?) of millions there should be no surprise when a few of them throw in the towel and think it is not worth their while to work on behalf of investors.
How to raise money to launch a hedge fund - Business Insider

Talk is cheap - only Performance counts

Easy to come up with catchy headlines to get publicity! Inevitably his advice becomes a sales pitch, for himself and for investing in shares. All very well, but remember:: the essential question you should direct at any Financial Adviser right at the beginning should be: "What has been your performance?" No matter how big or small the firm, or how prestigious, if the answer is evasive ("this depends on....") just walk away!
Ric Edelman: Working hard won't make you rich - Business Insider

HSBC wants more information from you

Big Banks are turning quickly into Big Brother! Arbitrary punishments are meted out from politicized regulators and greedy jurisdictions (led by the USA where judicial positions are used by ambitious individuals to promote their personal - often political - career, then to switch into highly-paid jobs with the firms they regulated). The cause of misdeeds are in the meantime not addressed - fraud, illegal activities (often again activities that are MADE illegal by legislative fiat, e.g. prostitution, poor or oppressive tax laws, anti-tobacco campaigns, poorly-thought out subsidies or tariffs, anti-drug fanaticism).
The end-effect will be that more and more people will bypass traditional banks, payment systems, possibly reduced their economic activity, esp in the better-earning strata of the population, thus making economies less efficient and more stagnant. All this by administrative fiat without any democratic legitimacy!
Big Banks are turning into Big Brother!