The Paper Trail: Quality Time
This month's research roundup features:
- Quality in Small-Caps
- Value vs. Growth Regimes
- Sports Teams as Real Assets
- Inverted Yield Curves and Future Bond Returns
- Political Influence and Stock Returns
- Benchmark Bias in Institutional Portfolios
- The Outlook for Credit Markets
- Global Data Centers
- And much more!
The Paper Trail: Darkest Before the Dawn
It's ironic that today, on Halloween of all days, markets feel (somewhat) less spooky than they were a month ago.
Following a dismal Q3, the Dow Jones Industrial Average is on pace to register (pending how things close today) it's best October of all time and its best month of performance since January of 1976.
It's been a year of Tricks for investors thus far in 2022. Let's hope this is a sign of some Treats coming our way.
Wrestling with Markets
While I was at Future Proof last month, I recorded an episode of The Sherman Show podcast, hosted by DoubleLine Capital's Deputy Chief Investment Officer, Jeffrey Sherman, and Samuel Lau, a DoubleLine Portfolio Manager.
I could have chatted with these guys for hours, and I think that comes through in the discussion. Please give it a listen!
The Paper Trail: Diversify Your Diversifiers
"Wake me up when September ends." - Green Day
Good riddance Q3.
The Summer rally proved to be short-lived, with equity markets giving back their gains (and then some). Interest rates and bond prices continue to defy any sort of precedent. In short, this historically challenging year for investors has continued to test the patience and discipline of many.
Here's hoping we get some relief to close out the remaining three months of the year!
Now on to the latest installment of The Paper Trail...
This month's research roundup covers:
- Mitigating line-item risk with diversifying strategies
- Neutralizing sector exposures in equity portfolios
- Single-family rental investments
- The opportunity in publicly traded REITs
- Replicating VC returns in public markets
- Bitcoin's developer community
- And much more!
Future Proof of Concept
That’s the most visceral reaction I can muster up following my 72 hours in Huntington Beach, CA at the inaugural Future Proof, the world’s first wealth festival.
It’s safe to say the entire conference industry has been put on notice. The bar has officially been raised.
The Paper Trail: Back to the Futures
Now that everyone's kids are back in school, it's time for investors to go back to school as well. With that in mind, here is some quality Labor Day Weekend reading with this month's installment of The Paper Trail, featuring:
- Fed Funds Futures and Bond Returns
- Shorting Bonds with Trend Following
- The Importance of Fundamentals
- Emerging Markets and the Ukraine Crisis
- Quantifying Direct Indexing's Tradeoffs
- The Relationship (or Lack Thereof) Between Value and Interest Rates
- And Much, Much More!!
Does Farmland Belong in Your Portfolio?
This past weekend's issue of Barron's featured a piece from Lauren Foster on farmland investing with a few quotes from yours truly.
Agriculture is fascinating in the sense that it predates modern investing by multiple millennia and yet few investors have any material exposure to it in their portfolios.
From an investment standpoint, there's a lot to like about farmland - current income, capital appreciation, inflation-hedging properties, and low correlation to other asset types.
So with its rich history and attractive investment properties, why has it remained elusive to the average investor?
The Paper Trail: Predictably Bad Investments
Doth my eyes deceive me? Could it be?
Stocks AND bonds up in the same month?
Did we take a time machine back to 2021??? 😂
All kidding aside, let's hope that "as goes July, so goes the rest of the year"!
Please enjoy this month's installment of The Paper Trail, featuring:
- Predictably bad investments in VC-backed startups
- Long-term private equity returns
- Crypto regulation
- The "overnight effect" anomaly in equity markets
- Liquidity holes in financial markets
- The impacts of supply and demand on inflation
- And much, much more!
Are Alternative Investments and ETFs Compatible?
This past week I was a guest on my friend Nate Geraci's podcast, ETF Prime. In addition to hosting ETF Prime, Nate is President of the ETF Store and a co-founder of the ETF Institute. In short, he's forgotten more about ETFs by breakfast than I have learned in my lifetime.
In our ~20-minute conversation, we covered a lot of ground with an emphasis on the alternative asset landscape and the role of alts in a portfolio. Given Nate's background, the question naturally came up:
Are Alternative Investments and ETFs Compatible?
While the obvious answer would seem to be 'yes' given how ubiquitous ETFs are today as the default product choice for millions of investors, the reality is not so cut and dry.
Looking to add something to your podcast queue for your 4th of July holiday weekend travels? Say no more, fam. I got you covered.
Earlier this week, I joined Lauren Foster, Senior Writer at Barron's, for a fun 30-minute chat about the role of alternative investments in asset allocation...
The Paper Trail: Breaking Beta
We're "halfway there" through 2022 and, like Bon Jovi, many investors feel like they are living on a prayer.
It's been the worst first half of the year in my lifetime for the classic 60/40 portfolio, down nearly 20 percent year-to-date.
In the rare occurrences when 60/40 portfolios are in drawdowns of this magnitude, it typically means that stocks are down significantly more and bonds are somewhat hanging in there. Not the case this year, with the Bloomberg U.S. Aggregate Bond Index down double digits this year as well.
You'd be forgiven for thinking that "market beta" - by which I mean traditional stock and bond market exposure - is broken in light of the current backdrop. But I would argue they are merely bent, not broken. That said, investors have more options than ever before to break free from relying on traditional beta alone and can instead augment them with an ensemble of valuable, diversifying strategies. But I digress...
Alternatives in Action
The question often comes up from readers and prospective clients of Savant:
What do alternatives look like in practice for a typical client portfolio at your firm?
While there is no such thing as a "typical" client portfolio, there are some common threads as it relates to the types of alternative investments we incorporate across the households we serve.
With that in mind, our investment team at Savant has authored a hot-off-the-press white paper on alternative investments that is available to download on our website.
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