Asset Allocation

Bill Ackman, founder of Pershing Square Capital Management, believes the following books are essential financial reading. Enjoy the summer! Words: 235

A large number of investment professionals confuse risk and volatility to the point where the terms are treated as being virtually synonymous. This has resulted in the flawed investment principle that reducing volatility will (and must) reduce risk. Such thinking is deeply misguided, and following it has dire consequences for investors. Let me explain more about what risk and volatility are and are not.

Asset allocation is one of the most crucial aspects of building a diversified and sustainable portfolio that not only preserves and grows wealth, but also weathers the twists and turns that ever-changing market conditions can throw at it. However, while the average [financial] advisor or investor spends a great deal of time carefully analyzing and picking the right stocks or sectors, the basic and primary task of asset allocation is often overlooked. [According to research by both Wainwright Economics and Ibbotson Associates and the current Dow:gold ratio, allocating a portion of one's portfolio to gold and/or silver and/or platinum is imperative to protect and grow one's financial assets. Let me explain.] Words:1060

Hedge funds are an integral part of our financial investment landscape. They often outperform the broad stock market by wide margins. Many are designed to make money in ANY market environment and they are now more accessible to investors via a fast-growing new vehicle — funds of hedge funds. Words: 859

This article provides you with an excellent understanding of what bonds are, the advantages of owning them and how to go about trading them.

According to a new study from the IMF, correlations in general are much more elevated these days than they were before the financial crisis. In other words, there are fewer places to hide in the markets when the markets start tanking. Check out their Global Financial Stability Report that's been described as "not for the faint-hearted." and the red bars in the chart below.

While you should fear plummeting stock markets...there are actually some interesting ways to play the downside or hedge your portfolio. Let me explain. Words: 990

The gold-mining sector performs very well during the first 18-24 months of a general equity bear market as long as...

It would seem logical to say that peace allows companies to focus on manufacturing goods, providing services, innovation and competition, all of which helps the overall economy but does peace, in fact, have anything to do with determining stock prices?

Q: Is it correct to assume throughout that an expanding trade deficit impacts the economy negatively? A: No, the relationship, if there is one, is that there has been a positive -- not negative -- correlation between the stock market and the trade deficit. Let me explain.