Does Your Investment Manager Have "Skin in the Game"?
August 30, 2018When choosing an investment manager, there are various important considerations to make. You’ll want to consider overall objectives, process and performance, what specifically you’ll be investing in, and of course, fees. With so many options for you to choose from, it’s crucial to ensure that your interests directly align with those of your investment manager. What could be more revealing of a manager’s interests and goals than being personally invested in their own funds?
Active Management May Be on the Rise Over Passive: But Active vs Passive is the Wrong Debate
August 23, 2018Following the 2007-2009 bear market, passive management, specifically index investing, was given the opportunity to thrive. Coming off the lows of a brutal bear market, the S&P 500 and other large cap indices thrived in an environment of easy monetary policy and quantitative easing. Many years of this 9+ year bull market experienced low or extremely low volatility leaving little room for active managers to squeeze out excess returns or alpha. Now, as volatility begins to reintroduce itself, active management may be coming back into favor among investors.
Caveat Emptor (Buyer Beware)
August 16, 2018As a Tactical ETF Strategist, we consider ourselves fairly qualified to navigate the exchange traded product (ETP) universe. That being said, there’s one place even we won’t go. To pull a quote directly from our presentation: no margin, leverage, or shorting. We believe that this subset of the ETF universe is far more trouble than it’s worth for investors, experienced and unexperienced alike.
Setting Return Expectations
August 9, 2018For the past two years I’ve attended the Berkshire Hathaway shareholder meeting in Omaha, Nebraska, known by many as the “Woodstock of Capitalism.” During the 2017 meeting’s question and answer section, a shareholder asked a seemingly simple question: at what rate can Berkshire Hathaway compound its book value per share over the long term? For those who are unaware, Warren Buffett has long maintained that this measure, growth in book value per share, will equate to the stock’s long term performance. The old sage took a second to think and then responded, if my memory serves, ...
Déjà Vu: Will this Rate Hike Cycle Cause the next Major Market Decline?
August 2, 2018The U.S. Federal Reserve Bank (FED) has a rather unenviable record and an even more difficult job. Since WWII, they have raised interest rates 18 times.¹ As the chart below shows, the stock market and the economy have reacted badly each time. Does anyone really think that this time will be different?
Tech Sector Dominance: Is there an End in Sight?
July 26, 2018I am sitting here at my desk on another nice sunny July day. With the weekend fast approaching, motivation can be difficult to come by. I’m sure many, specifically in the financial industry, can relate. I’ve always found that the best way to keep myself motivated is to have a little fun so I decided to switch things up from the normal chart blog today. While scrolling through charts, one in particular caught my eye. As the old saying goes “A picture is worth 1000 ...
Investing and Basketball: What You Can Learn from the World's Greatest Coach
July 19, 2018When times get rough, emotions run high. Babe Ruth goes into a slump. Tom Brady gets intercepted…twice in one game! Bill Russell goes 1-12 in foul shots. Even the best have bad games. Some have bad seasons. There could be a lingering injury, maybe the ball was tipped, maybe the team needs some rebuilding, or perhaps circumstances just turned out that way. Not everything is under our control. Great coaches recognize this, and have patience and faith in their players. Red Auerbach, the hall of fame coach who spent the majority of his career with the Celtics, worked with and ...
From the Desk of the PM - Sector Changes
June 25, 2018The following memo was sent on Monday evening, June 25th in response to the imminent S&P 500® Index change to BCM's current clients.
Why Own an Umbrella When It's Sunny Every Day?
April 19, 2018Why would you buy an umbrella when it’s been sunny every day? Let’s not forget the original use for an umbrella was actually as a sunshade, not for rain, but I digress. Seriously, why would you keep an umbrella in your car, at home or in a golf bag? To state the obvious, it’s one thing to get caught in a light shower, but quite another when a squall line or worse moves in. You don’t want to get soaked!
Investment Acronyms: Say What?! CNBC Slang Finally Decoded
April 10, 2018Popular sites such as Investopedia and The Financial Dictionary have over 1,885 financial acronyms housed in their shared glossaries. I would challenge you to find anyone — let alone a typical investor — list-off and define the most fundamental acronyms common to our industry. In honor of April being Financial Literacy Month, we have compiled a guide to the terms you should know that we here at Beaumont Capital Management (BCM) use and converse in everyday conversation. Plus, our ...
