Displaying items by tag: allocation

Thursday, 22 September 2022 05:14

Carson Group Announces New Model Portfolio Hub

The Carson Group recently announced several new developments during a Partner Summit, including a new model portfolio hub. The company, which was founded in 1983, is made up of three related businesses including a wealth management firm, a coaching network, and a partnership established in 2012 with approximately 120 affiliated firms. The firm’s announcements included updates and additions to its rapidly growing platform, including a lead generation program, a new investment research portal, additional alternative investment options, and a “model hub” to let advisors administer multiple accounts simultaneously. Burt White, Chief Strategy Office of Carson said this of the new model portfolio hub, “What it allows you to do is to create a model and tie multiple clients to that model. One, two, 15, or a hundred. And then every time you change the model, it goes through and does it for all 100 of those clients that are tied to the model, as opposed to today, where you have to go into every single one.” The model portfolio hub is expected to launch early next year.


Finsum:Carson Group announced several new additions to its platform, including a model portfolio hub that lets advisors administer multiple accounts simultaneously.

Published in Wealth Management
Thursday, 08 September 2022 02:51

Do Target Date Funds Have It Wrong?

When an investor owns a target date fund, the asset mix shifts over time. For younger investors, the portfolio emphasizes equities and allocates less to long-duration fixed income. When investors get older and approach retirement, target-date funds reduce the equity exposure and add duration to fixed income. Tyler Thorn, a multi-sector portfolio manager at PGIM Fixed Income, told Pension & Investments that this is the opposite of how duration should be managed. He believes that a target-date fund’s duration goes in the wrong direction. He stated, “Instead of starting low and rising with age, it should start high and decline with age.” Thorn believes that younger investors need more duration exposure since they will be spending a lot more in the future. Thorn also believes that if these changes were implemented, they could make the 60/40 portfolio more viable.


Finsum:A PGIM Fixed Income manager believes that the 60/40 portfolio can be fixed if bond duration was managed differently.

Published in Wealth Management

 The past can inform the future. We can all learn by revisiting two extended periods value stocks underperformed on a huge scale and compare them with the current era when disruptive tech stocks have, once again, been outperforming value. 

The Nifty Fifty

The first period (when value stocks underperformed growth stocks on a huge scale) can be highlighted in the years leading up to 1972 when an extended bull market had taken a group of growth securities to extraordinary levels. They were iconic companies known as the “Nifty Fifty” and included technology companies of that era such as IBM, Texas Instruments, and Xerox as well as a host of other companies including Walt Disney, Coca-Cola, and McDonald’s, which had been considered “one-decision” stocks that did not fall in stock price. But in the following two years, many of them lost two-thirds of their value. When thinking about today, it is also interesting to note the collapse of the Nifty Fifty happened amid rising inflation and an oil shock caused by the Arab oil embargo. 


The Dot.com Darlings

The second period occurred in the years leading up to 2000, when a group of so-called “dot.com darlings” such as Cisco, Sun Microsystems, and Microsoft, several of which had achieved extraordinary price/earnings valuations of 100X earnings or more, then crashed even more spectacularly, brought down by the weight of excessive valuations. 


The Fabulous FAANGS + Microsoft (FANMAG)

Over the last decade, we have had another group of innovative companies that have captured the imaginations of investors, and with the help of zero interest rate policies, helped lead equity markets to all-time highs.


What Happens Next

Growth investing always feels better, easier. Value investing requires the ability to look wrong for a while.


Over the last decade, value investing did not prove to be as profitable as paying up for technology stocks. Articles in the financial press even reported, not that long ago, that value was dead, dying, or at the very least compromised.
But we believe that if you look at the metrics differently—if you focus not just on price to book value, but instead on earnings-based enterprise multiples—then you see a different story. While value metrics such as price to book have performed poorly, value-oriented companies with low enterprise multiples have performed better. Looking back over the last 50 years, the resurgence of value should be reassured. And while it’s hard to know for sure, we believe we could be in the midst of that resurgence today, as rising inflation and the prospect of higher interest rates, once again, appear to be wreaking havoc with highly valued, speculative growth stocks. 


So, Lesson #1 is that price matters.  Don’t give up on value investing. Stay on the Bus! 


If the past is indeed prologue, this time is not different, but simply a normal period of underperformance for an investment approach that has handily beaten its growth counterpart for much of the last century, albeit in a very lumpy manner.  (Of course, past performance is no guarantee of future results.)


Lesson #2 is simple enough: Don’t forget Lesson #1.


A list containing all recommendations made by Tweedy, Browne Company LLC within the previous 12 months is available upon request. It should not be assumed that all recommendations made in the past have been profitable or that recommendations made in the future will be profitable or will equal the performance of the securities in this list.


Tweedy, Browne Company LLC’s 100-year history is grounded in undervalued securities, first as a market maker, then as an investor and investment adviser. The firm registered as an investment adviser with the SEC in 1975 and ceased operations as a broker-dealer in 2014.


This article contains opinions and statements on investment techniques, economics, market conditions and other matters. There is no guarantee that these opinions and statements will prove to be correct, and some of them are inherently speculative. None of them should be relied upon as statements of fact.

Any discussion of sectors, industries, or securities herein is informational and should not be perceived as investment recommendations. Securities discussed herein were not necessarily held in any accounts managed by Tweedy, Browne.
Current and future portfolio holdings are subject to risk. The securities of small, less well-known companies may be more volatile than those of larger companies. In addition, investing in foreign securities involves additional risks beyond the risks of investing in securities of U.S. markets. These risks include economic and political considerations not typically found in U.S. markets, including currency fluctuation, political uncertainty, and different financial and accounting standards, regulatory environments, and overall market and economic factors. Force majeure events such as pandemics and natural disasters are likely to increase the risks inherent in investments and could have a broad negative impact on the world economy and business activity in general. Value investing involves the risk that the market will not recognize a security’s intrinsic value for a long time, or that a security thought to be undervalued may actually be appropriately priced when purchased. Dividends are not guaranteed, and a company currently paying dividends may cease paying dividends at any time. Diversification does not guarantee a profit or protect against a loss in declining markets. There can be no guarantee of safety of principal or a satisfactory rate of return.

Diversification does not guarantee a profit or protect against a loss in declining markets. There can be no guarantee of safety of principal or a satisfactory rate of return.

Price/book (or P/B) ratio is a valuation measure calculated by dividing the market price of a company’s outstanding stock by its book value (total assets of a company less liabilities) and then adjusting for the number of shares outstanding. Stocks with negative book values are usually excluded from this calculation.

Price/earnings (or P/E) ratio is a valuation measure that compares the company’s closing stock price and its trailing 12-month earnings per share.

The Managing Directors and employees of Tweedy, Browne Company LLC may have a financial interest in the securities mentioned herein because, where consistent with the Firm’s Code of Ethics, the Managing Directors and employees may own these securities in their personal securities trading accounts or through their ownership of various pooled vehicles that own these securities.

Past performance is no guarantee of future results.

Published in Eq: Large Cap

Companies Newfound Research and Simplify Asset management are partnering on a selection of new model portfolios that are giving investors more options on their equity holdings. The structured alpha portfolios are designed to target different growth offerings and provide different risk exposure. With the four portfolios coming in 20/80, 40/60, 60/40, and 80/20 equity allocations investors will have exposure to equity, rate, and volatility markets to mitigate financial risk. Fund advisors are trying to get outperformance from strategic capital efficiency rather than trying to pick winning stocks at the right time.


FINSUM: Even basic equity/bond allocation strategies in model portfolios are a good way for advisors to drill down the risk in a portfolio.

Published in Eq: Tech
Thursday, 13 January 2022 17:26

New Model Portfolios Giving Investors More Choices

Companies Newfound Research and Simplify Asset management are partnering on a selection of new model portfolios that are giving investors more options on their equity holdings. The structured alpha portfolios are designed to target different growth offerings and provide different risk exposure. With the four portfolios coming in 20/80, 40/60, 60/40, and 80/20 equity allocations investors will have exposure to equity, rate, and volatility markets to mitigate financial risk. Fund advisors are trying to get outperformance from strategic capital efficiency rather than trying to pick winning stocks at the right time.


FINSUM: Even basic equity/bond allocation strategies in model portfolios are a good way for advisors to drill down the risk in a portfolio.

Published in Wealth Management
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