Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Investment’

Income Investors: It’s OK to Be Sad, But Don’t Get Desperate

Posted by hkarner - 8. Oktober 2017

Date: 07-10-2017
Source: The Wall Street Journal By Jason Zweig

Old bull markets don’t produce new ideas. They just produce new ways for investors to hurt themselves with old ideas.

With stocks at record highs and the income on bonds not far from record lows, circumstantial evidence suggests investors are getting restless — if not desperate.

Chasing “yield,” or trying to get higher investment income, is one form of desperation. Last month, $1.6 billion in new money poured into exchange-traded funds holding high-yield corporate bonds, according to FactSet. Den Rest des Beitrags lesen »

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Investors are not great at predicting politics

Posted by hkarner - 12. August 2017

Date: 10-08-2017
Source: The Economist: Buttonwood

Wishful thinking may lead them astray

FINANCIAL markets are supposed to be the font of all wisdom, weighing up the information available and condensing it into a set of prices. Investors are presumed to have an insight into the future—falling bond yields are seen as a sign that the economy is slowing, for example.

But are investors that clever when it comes to politics? Gambling markets show how they assess political risk. They expected the Remain campaign to win the Brexit referendum and Hillary Clinton to become America’s president, and were proved wrong. Indeed, on Brexit, the mass of gamblers (the general public, in other words) backed Leave, but the odds were skewed by some wealthy punters who favoured Remain. Those rich gamblers were probably people who trade in financial markets; the plunge in the pound after the result suggests that most investors were caught on the hop.

Before the presidential election, most people on Wall Street to whom Buttonwood spoke thought that a victory for Donald Trump would be bad for the markets. But as the results came in, there was a sudden change of tone and both the dollar and equities rallied. Den Rest des Beitrags lesen »

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The Coming Financial Volatility

Posted by hkarner - 25. Juli 2017

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Robotic Hogwash! Artificial Intelligence Will Not Take Over Wall Street

Posted by hkarner - 19. Juli 2017

Date: 18-07-2017
Source: The Wall Street Journal

For all the hype, applying AI to investment still has a few serious problems

Artificial intelligence and machine learning are the buzzwords in automated investment. But for all the hype, applying AI to investment still has its problems.

Ten years ago, computer-driven traders pulled the plug after their algorithms ran amok, leading to billions in losses and the eventual closure of Goldman Sachs ’s flagship quantitative fund.

A decade on, artificial intelligence and machine learning are the buzzwords in automated investment. But for all the hype, applying AI to investment has three serious problems: it works too well, it is often impossible to understand, and it only knows about recent history. Worse, it will be self-defeating if it proves popular, as algorithms face off against each other in the market.

Machine-learning systems are now really good at spotting patterns. Unfortunately, computers are just too good, and frequently find patterns that aren’t really there. Den Rest des Beitrags lesen »

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Super-Rich Sit On Too Much Cash, UBS Report Says

Posted by hkarner - 10. Juli 2017

Date: 08-07-2017
Source: The Wall Street Journal

Ultra-high net worth investors hold too much cash, according to UBS, and it could be hurting their returns

UBS, the world’s largest wealth manager, said in a report that investors with at least $30 million in investible assets tend to maintain high cash allocations, often in the region of 35% of their total portfolio.

These high cash levels may be creating a drag on the performance of their assets, the report said. Over the past decade, cash has returned 1.1% on an annualized basis. In comparison an even split of private equity and hedge funds would have returned 3.8%.

The aftermath of the financial crisis and recent market volatility have pushed investors toward lower-risk investments. Den Rest des Beitrags lesen »

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When Everything Is Expensive, Not Investing Is a Great Option

Posted by hkarner - 27. Juni 2017

Date: 26-06-2017
Source: The Wall Street Journal

Stocks are at record highs and bond yields exceedingly low. It is time to hoard cash for the next buying opportunity.

In a world where many markets look expensive, putting cash to work is hard. Simply hanging on to more of it might be a good idea.

That is particularly the case after the first half of 2017 has delivered good results across the board. Most strikingly, both bonds and stocks are up. The MSCI World index of developed-market stocks is up 9.7% so far this year, while long-dated bonds are also partying, with the 30-year Treasury yield falling around 0.25 percentage point to just 2.73%, boosting prices. Corporate-bond yield spreads are back to their tightest levels since the global financial crisis. Den Rest des Beitrags lesen »

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The country with Europe’s strongest economy faces potholed roads and crumbling schools

Posted by hkarner - 17. Juni 2017

Date: 15-06-2017
Source: The Economist
Subject: The Germany that doesn’t work

Germany’s low investment rate leaves its infrastructure creaking

A VERDANT suburb in the northern state of Schleswig-Holstein, Pinneberg epitomises the Germany of record consumer confidence, booming exports and a bulging federal budget surplus. Here commuters stream off trains from Hamburg (local unemployment is 4.9%), climb into big cars and zip home to neat houses with solar panels on the roof.

But visit the Theodor Heuss secondary school and you see another Germany. Duct tape attaches wallboard partitions to bare concrete ceilings studded with loose wires. Pipes, weeds and bits of tile stick out of the ground. Noisy emergency roof repairs had to be carried out during exams. “We went to the state government three years ago but nothing has happened,” complains Ulrike Graefen of the Pinneberg School Alliance, a parents’ group.

This is the underside of Germany’s economic miracle: a country with a budget surplus of €23.7bn ($26.7bn), or 0.8% of GDP, has the lowest infrastructure investment rate of any big, rich economy. The IMF complains that such under-spending contributes to the country’s excessive savings, helping to unbalance global trade. And it hurts Germany, too. Den Rest des Beitrags lesen »

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The Great Reset, Part Two

Posted by hkarner - 29. Mai 2017

By John Mauldin, May 27, 2017

– Donald Knuth, from his 1974 Turing Award lecture

This is the second of two letters that I think will be among the most important I’ve ever written. These letters set out my philosophy about how we have to invest in the coming days and years. They are the result of my years spent working with clients and money managers and thinking about the economic and particularly the macroeconomic world. Because of some of the developments I will be discussing, I think the future is likely to be extremely challenging for traditional portfolio allocation models. In these letters I also discuss some of the changes in my thinking about the new developments in markets that allow us to more quickly adapt to a changing environment – even when we don’t know in advance what that environment will be. I hope you today’s letter helpful. At the end I offer a link to a special report with more details.

Last week I discussed what I think will be the fallout from the Great Reset, when the massive amounts of global (and especially government) debt and the bubble in government promises will have to be dealt with. I think we’ll see a period of great volatility in the markets. Den Rest des Beitrags lesen »

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The Great Reset: How Should We Then Invest?

Posted by hkarner - 24. Mai 2017

By John Mauldin, May 22, 2017

– John Maynard Keynes

“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.”
– Ray Dalio, founder, Bridgewater Associates, LP

This letter and next week’s will be two of the most important I’ve ever written. They will set out my philosophy about how we have to invest in the coming days and years. They are the result of my years of actually working with clients and money managers and thinking about the economic and particularly the macroeconomic world. Because of some of the developments I will be discussing, I think the future is likely to be extremely challenging for traditional portfolio allocation models. The letters also discuss my thinking on new developments in markets that allow us to more quickly adapt to our ever-shifting environment, even when we don’t know in advance what that environment will be. I hope you find the letters helpful. Den Rest des Beitrags lesen »

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Why Emerging Markets Are Looking Better Than the USA

Posted by hkarner - 2. April 2017

Date: 01-04-2017
Source: The Wall Street Journal By JASON ZWEIG

Investing in emerging markets isn’t a bad idea, but rushing to do so is

Investors should ponder why that quintessential wise man, Benjamin Franklin, owned an asbestos purse. Perhaps it was to keep his money from burning a hole in his pocket. If we all had fireproof purses, maybe we wouldn’t be so eager to put hot money to work.

So far in 2017, exchange-traded funds investing in stocks from such developing nations as Brazil, China, India, Mexico and Russia have taken in $10.5 billion in new money, estimates TrimTabs Investment Research of Sausalito, Calif. With $127.8 billion in total assets, one-twelfth of all the money in these funds has come in over the past 90 days.

Much of that, presumably, is in hot pursuit of high recent returns. Emerging markets are up 12.4% this year — double the return of the S&P 500 index of U.S. stocks, counting dividends. Den Rest des Beitrags lesen »

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