Beware Mutual Funds Using Hedge Fund Strategies
January 6, 2012With hundreds of mutual funds that use hedge fund strategies being rushed to market, there are bound to be some real dogs. After a decade of low stock market returns and high volatility, investors are clamoring for products that seek to profit regardless of the market environment. Mutual fund companies are doing their best to fill the void with products that employ hedge fund strategies. The $2 trillion private hedge …
Understanding Investor Biases
October 10, 2011Emotions and money each cloud judgment. Together, they create a perfect storm that threatens to wreak havoc on investors’ portfolios. One of the biggest risks to investors’ wealth is their own behavior. Most people, including investment professionals, are prone to emotional and cognitive biases that lead to less-than-ideal financial decisions. By identifying subconscious biases and understanding how they can hurt a portfolio’s return, investors can develop long-term financial plans to …
Capital Gains Planning Strategies
October 10, 2011Capital gains tax rates are at historic lows, but they are in the political crosshairs. It’s a good idea to take advantage of planning strategies now. Capital gains contribute to a taxpayer’s adjusted gross income. An investor realizes capital gains when he sells investments for more than he paid for them; capital losses are the opposite. All of an investor’s capital gains and capital losses are first combined to create …
IPOs for Small Investors
September 8, 2011
IPO officially stands for “Initial Public Offering;” but on Wall Street it really means “Immense Profit Opportunity for Important People Only.”
Do Incentive Trusts Encourage Responsibility?
June 17, 2011Wealth is difficult to amass but easy to squander. This worries some affluent parents, so they are transferring assets to their heirs with strings attached. With a $5 million lifetime gift tax exemption in place for 2011 and 2012, parents are transferring significant amounts to their children and grandchildren now instead of leaving it to them at death. However, parents realize that putting such wealth in the hands of their …
Seeking Opportunities Down Under
March 29, 2011I’ll have a “Bloomin’ Onion,” the 12-ounce “Outback Special” — medium rare — with the loaded baked potato and, for dessert, a slice of the Australian economy. Australia, the world’s largest island and smallest continent, is an excellent investment opportunity. Over the past few decades, Australia’s economy has benefited greatly from its strong ties to the rapidly developing Pacific region. The country is rich with natural resources and is well …
New SEC Rules Strengthen Money Market Funds
January 18, 2011In 2008, investors feared the collapse of money market funds. The Securities and Exchange Commission (SEC) established new regulations to help stabilize the industry. Now, concerns about the European debt crisis are putting the regulations to the test. Money market funds invest in short-term, high-quality securities such as commercial paper, certificates of deposit and government securities. The goal is to maintain a net asset value (NAV) of $1 per share, …
How To Prepare For A State Default
January 18, 2011Editor’s Note: This article is the second in a two-part series. Read part one. So you’re a current or retired state employee. Or perhaps you have a state contract, or you own your state’s municipal bonds for the tax-free income. Though your payments have come on time thus far, you’re worried that the state may default. What should you do? Bondholders have a very easy option: Sell your individual municipal …
Is There A Bubble In The Bond Market?
October 7, 2010Conditions in the bond market don’t match the textbook definition of a bubble, but aggressive bond investors are positioning themselves to lose stunning amounts of money. Interest rates are currently near all-time lows, and there’s a heated debate as to why. Optimists will tell you that rates are low because global governments and central banks are stimulating the world economy. Pessimists will tell you that rates are low because we …
Natural Resources Endure Shorter Recessionary Bust
June 4, 2010
Resource investors were not immune to the pain of the latest recession, but, for them, it was more like tearing off a Band-Aid than slowly peeling one away. The S&P Global 1200, a stock index providing a reliable measure of worldwide equity markets, peaked on Oct. 31, 2007. We all know what happened next: financial crisis, fear and economic decline. The bottom for global equities, or at least what we …
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