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The Most Boring – Yet Potentially Valuable – Recommendation an Advisor Can Make

The Changing Face of Defensive Equity Strategies

Prior to COVID, a popular approach to defensive equity investing centered on buying lower-risk, higher quality stocks. This makes perfect sense and isn’t very surprising. Also not surprising, this sort of strategy tends to...

Stock Market Rotation: Growth versus Value, and Cyclical versus Secular

Over the past few months, there has been a great deal of talk about ‘rotation’ within the stock market. Much of the commentary on the topic focuses on growth versus value investing. However, it may be helpful to supplement...

A 'Kettlebell' Investment Approach?

When speaking about investments, a ‘barbell’ approach generally refers to deploying capital to the two poles of the risk spectrum – the very safe and the very risky – with the goal of creating a combined...

Where Has The 'Value' In Value Investing Gone?

Over the long run, ‘value’ investing has a stellar track record, but since the global financial crisis value stocks have drastically underperformed growth stocks. The chart below shows the performance of the Russell 1000...

Volatility Can Be Such A Drag

Diversification, defensive factor positioning, and managed volatility strategies are all portfolio construction techniques that are often introduced to help control volatility. While risk reduction is a good reason to implement these...

Living With Diversification

Diversification is widely respected as an efficient and responsible way to build and preserve wealth. Theoretical support for diversifying investments stems from Modern Portfolio Theory, which showed how the risk-reward performance of...

Impact of the Upcoming Midterm Elections

While trade issues have received the bulk of the headlines this year, the upcoming midterm elections present another source of uncertainty for the financial markets. Historically, this has actually turned out well for investors. The...

Worrying About the Yield Curve?

The ‘yield curve’ – the difference between the yield on the 10 year Treasury Note and the yield on the 2 year T-Note – has recently flattened to its lowest level in over a decade. This raises concerns since, as...

Revisiting Inflation and Interest Rates

In my February blog, I outlined a few explanations for the market correction that began earlier that month. At this point, we can continue that discussion by focusing on the two justifications for the market’s action that relate...

Insurance Considerations for Future Pensioners

The number of workers that have access to defined benefit pension plans has fallen drastically over the years. However, we continue to come across a substantial number of pre-retirees that will be receiving these pensions. When we do,...

Watch Your Duration!

With so much concern about inflation and Fed rate hikes, bond investors should be paying close attention to the sensitivity of their portfolios to a change in interest rates. An important measure of this risk is called...

Lessons from the Short Volatility Trade

Last August, I wrote about a few financial strategies that posed risks to the financial system. Among them was the ‘short volatility trade’. I concluded that: “In the event of a more prolonged and pronounced down move...

Guide to the Market Correction: Part Two

In the companion piece to this post, I mentioned the different narratives that explained the current market correction. While investors will (and should) seek to understand the underlying causes of market movements, it is important to...

Guide to the Market Correction: Part One

Last Thursday, the stock market officially entered ‘correction’ territory. Technically speaking, a correction occurs when the market falls by 10% from its previous peak. While corrections are not particularly enjoyable for...

2018: The Year Inflation Re-Emerges?

Following the financial crisis, the U.S. economy has experienced a long recovery with a noticeable absence of price inflation. Last year, the unemployment rate in the U.S. continued to fall, from 4.8% in January to 4.1% currently. Yet...

The Fed and the Bond Market

Recently, Federal Reserve policymakers surprised no one when they raised the Fed funds rate to a range between 1.25% and 1.50%. The prospect of rising rates understandably makes investors less enthusiastic about allocating capital to...

Reasons to Remain in the Stock Market

The stock market has recently made new highs, and investors have to wonder – given the prolonged and consistent rally – if now is the right time to reduce exposure. As always, it makes sense to take a step back and consider...

Why We Like Alternatives

It is common wisdom that domestic stock and bond markets are (depending on your view) either fully-valued or overvalued. While I have occasionally written blog posts aimed at debunking the ‘argument du jour’ for why these...

Diversification and the Problem with Line-By-Line Statement Reviews

Most investors understand the benefits of having of a diversified portfolio. Even before the advantages of diversification were formally codified and quantified through the development of Modern Portfolio Theory in the 1950’s,...

The Next Financial Crisis?

Recently, several well-known market prognosticators have called for stock market investors to start heading for the exit as we enter a seasonally weak period for the market. While it’s true that September is historically the...

The Stock Market Looks Cheap Based on this Valuation Measure

As the U.S. stock market reaches new highs, it is common for people to ask if the market has become overvalued. Based upon many absolute valuation metrics this appears to be the case, but looking at relative valuation tells a different...

International Equities Revisited

Around two months ago, I wrote a blog post titled "The Case for International Equities". Since then, investing in foreign markets has become something of a consensus view. The investment flows demonstrate this fairly clearly as there...

Should investors be concerned about the VIX?

Recently, the CBOE Volatility Index, commonly referred to as the VIX, dropped below 10%. This occurrence caused a few headlines because the other name for the VIX is “the fear index”, so a drop below 10 – which...

The Case for International Equities

With the U.S. stock market at relatively high levels, now may be a good time to look abroad for equity exposure. There are a few factors that make foreign markets attractive at this time. The U.S. market has vastly outperformed other...

Why Smart-Beta Products Are Confusing

Over the last few years, financial services providers have been falling over themselves to develop and bring to market new 'smart-beta' products. The value proposition for these investment vehicles is pretty straightforward: by...

Our Thoughts on the Fiduciary Duty Rule

You may have heard reports in the news recently that our newly elected President has signed an executive order pertaining to the Department of Labor’s (DOL) Fiduciary Duty Rule or “Conflict of Interest” Rule. The...

Allan Proske earns Accredited Investment Fiduciary® designation

I am pleased to announce that I have been awarded the Accredited Investment Fiduciary® (AIF®) designation from the Center for Fiduciary Studies™, the standards-setting body for fi360. The AIF® designation signifies...

Portfolio Risk Targets

For an investor, setting an appropriate portfolio risk target is a key concept. In some self-directed accounts, 529’s, and 401K’s, investors are asked to self-assess their financial circumstances and select a risk target...

Understanding Alternative Equity Strategies

Oftentimes, when seeking equity exposure with lower risk, investors come across alternative equity investments. These are liquid alternative funds that are often classified as 'market neutral', 'long/short', or 'hedged equity'....

Equity Factor Allocation Under a Trump Presidency

Over the last few years, many financial services companies have been issuing new investment vehicles meant to take advantage of equity ‘factors’ (sources of incremental return above and beyond the general equity market)....