The document analyzes whether investors remain psychologically scarred from the 2008-2009 financial crisis in a way that has disrupted their normal assessment of risk and reward. It finds that investors exhibit several psychological constraints, including heuristics, overconfidence, and loss aversion. It predicts that as a result, the "wall of worry" phase of the bull market will last longer than usual, economic activity will be slower to recover, portfolio models may misjudge returns, interest rates will stay low for longer, and equities may underperform bonds for an extended period. Investors will also be slow to reallocate back into equities.
- DSP Top 100 Equity Fund invests primarily in large cap Indian stocks with a concentrated portfolio of about 30 stocks.
- The fund focuses on finding sustainable, scalable businesses with consistent returns and growth even through economic downturns.
- As of December 2021, the fund's top sectors were financials, materials, and healthcare. The largest themes in the portfolio included private banks, consumption, IT, infrastructure like cement, and pharmaceuticals.
The document summarizes the DSP Equal Nifty 50 Fund, which invests in companies that are part of the Nifty 50 Equal Weight Index. The index provides balanced diversification by giving equal weight to each stock, unlike market-cap weighted indexes that concentrate holdings in few large stocks. This reduces single stock and sector risk. Historically, the equal weight index has outperformed the regular Nifty 50 Index, providing higher returns with comparable risk levels. The fund aims to replicate the performance of the index at low cost.
The document provides an overview and analysis of financial markets in 2009. It discusses the economic turmoil affecting markets, outlines different types of market declines, and analyzes stock and bond returns over time. The document emphasizes maintaining realistic expectations, the benefits of long-term investing, and risks of trying to time the market.
The document discusses the DSP Mid Cap Fund, a mid-cap equity fund that primarily invests 2/3 of its assets in mid-cap stocks and 1/3 in large and small-cap stocks. It outlines the fund's investment philosophy of identifying durable businesses with strong management teams trading at reasonable valuations. The document also summarizes the fund's three pillar investment framework and long-term buy and hold approach, as well as its historically strong risk-adjusted returns compared to its benchmark.
DSP World Mining Fund - An Open Ended Fund Of Funds Scheme investing in Mining Companies through International Funds
This Open-ended Fund of Funds Scheme is suitable for investors who are seeking*:
1. Long-term capital growth
2. Investment in units of overseas funds which invest primarily in equity and equity related securities of mining companies
3. High Risk**
*Investors should consult their financial advisors if in doubt about whether the Scheme is suitable for them.
**Risk may be represented as:
Low: Investors understand that their principal will be at low risk
Moderately Low: Investors understand that their principal will be at moderately low risk
Moderate: Investors understand that their principal will be at moderate risk
Moderately High: Investors understand that their principal will be at moderately high risk
High: Investors understand that their principal will be at high risk
Active managers have generally not outperformed the market in either bull or bear markets. During the 2008 financial crisis, actively managed funds underperformed the S&P 500 index by an average of 1.67% on average. Studies from 2008-2012 also found that the majority of active managers failed to outperform their benchmarks across various market categories. While markets have historically delivered positive returns, it is typically a small group of top-performing stocks that drive those returns, making it difficult for managers to consistently pick winners. Diversification can help reduce risk and volatility compared to investing only in stocks, as seen during the 1973-1976 and 2007-2011 periods where a diversified portfolio lost less than a pure stock portfolio.
The document provides 5 investing principles based on a presentation about lessons learned. Principle 1 discusses that every investment has risks, even cash, as investors flocked to cash during volatile periods but it provided little return over the long run after accounting for inflation. Principle 2 notes that while most asset classes declined in 2008, a diversified portfolio still worked over the full market cycle from 2000-2009. Principle 3 explains that not all bonds or bond funds perform the same way. Principle 4 asserts that stocks have generally outperformed over the long run. Principle 5 advocates for including international stocks rather than avoiding foreign markets.
- DSP Top 100 Equity Fund invests primarily in large cap Indian stocks with a concentrated portfolio of about 30 stocks.
- The fund focuses on finding sustainable, scalable businesses with consistent returns and growth even through economic downturns.
- As of December 2021, the fund's top sectors were financials, materials, and healthcare. The largest themes in the portfolio included private banks, consumption, IT, infrastructure like cement, and pharmaceuticals.
The document summarizes the DSP Equal Nifty 50 Fund, which invests in companies that are part of the Nifty 50 Equal Weight Index. The index provides balanced diversification by giving equal weight to each stock, unlike market-cap weighted indexes that concentrate holdings in few large stocks. This reduces single stock and sector risk. Historically, the equal weight index has outperformed the regular Nifty 50 Index, providing higher returns with comparable risk levels. The fund aims to replicate the performance of the index at low cost.
The document provides an overview and analysis of financial markets in 2009. It discusses the economic turmoil affecting markets, outlines different types of market declines, and analyzes stock and bond returns over time. The document emphasizes maintaining realistic expectations, the benefits of long-term investing, and risks of trying to time the market.
The document discusses the DSP Mid Cap Fund, a mid-cap equity fund that primarily invests 2/3 of its assets in mid-cap stocks and 1/3 in large and small-cap stocks. It outlines the fund's investment philosophy of identifying durable businesses with strong management teams trading at reasonable valuations. The document also summarizes the fund's three pillar investment framework and long-term buy and hold approach, as well as its historically strong risk-adjusted returns compared to its benchmark.
DSP World Mining Fund - An Open Ended Fund Of Funds Scheme investing in Mining Companies through International Funds
This Open-ended Fund of Funds Scheme is suitable for investors who are seeking*:
1. Long-term capital growth
2. Investment in units of overseas funds which invest primarily in equity and equity related securities of mining companies
3. High Risk**
*Investors should consult their financial advisors if in doubt about whether the Scheme is suitable for them.
**Risk may be represented as:
Low: Investors understand that their principal will be at low risk
Moderately Low: Investors understand that their principal will be at moderately low risk
Moderate: Investors understand that their principal will be at moderate risk
Moderately High: Investors understand that their principal will be at moderately high risk
High: Investors understand that their principal will be at high risk
Active managers have generally not outperformed the market in either bull or bear markets. During the 2008 financial crisis, actively managed funds underperformed the S&P 500 index by an average of 1.67% on average. Studies from 2008-2012 also found that the majority of active managers failed to outperform their benchmarks across various market categories. While markets have historically delivered positive returns, it is typically a small group of top-performing stocks that drive those returns, making it difficult for managers to consistently pick winners. Diversification can help reduce risk and volatility compared to investing only in stocks, as seen during the 1973-1976 and 2007-2011 periods where a diversified portfolio lost less than a pure stock portfolio.
The document provides 5 investing principles based on a presentation about lessons learned. Principle 1 discusses that every investment has risks, even cash, as investors flocked to cash during volatile periods but it provided little return over the long run after accounting for inflation. Principle 2 notes that while most asset classes declined in 2008, a diversified portfolio still worked over the full market cycle from 2000-2009. Principle 3 explains that not all bonds or bond funds perform the same way. Principle 4 asserts that stocks have generally outperformed over the long run. Principle 5 advocates for including international stocks rather than avoiding foreign markets.
The document discusses key considerations for long-term investing, focusing on longevity and the importance of making investment decisions that will allow one's money to last a lifetime. It outlines two main investment decisions - whether to take an active or passive approach, and if passive, whether to implement an indexing or asset class strategy. For the first decision, it notes that most active managers underperform the market, while passive investing aims to capture market returns at low cost. For the second decision, it explains that asset class investing seeks to maintain consistent risk exposures and has more flexibility, while indexing aims to replicate market segments.
For an intangible entity, time is starkly palpable in different ways for investors depending on whether they are making gains or suffering losses. Overall, time is a capricious companion that is loyal to none. The document then provides 10 rules for successful long-term investing: know your net worth and risk tolerance; understand any investments you make; diversify your portfolio; factor in inflation; invest in insurance; plan taxes throughout the year; prepare an emergency fund; prioritize retirement savings; learn to cut losses on underperforming investments; and regularly review your portfolio.
The fund has outperformed its benchmark over the past 6 months and since inception. A quality factor approach has underperformed recently due to high growth stocks benefiting from easy access to capital. Inflation is a concern as accommodative policies end. The fund is well positioned, with its multi-factor approach of quality, growth and value performing well in both "overheating" and "stagflationary" periods according to an analysis of factor performance during different macroeconomic conditions. Quality has outperformed in stagflationary periods while value has done well in overheating periods.
1. The Australian equity market has increased 24% from its March low but remains below levels from three years ago. The report predicts continued bull market conditions with the All Ordinaries index reaching 3,650, implying almost 15% total returns over the next 12 months.
2. Small cap stocks have outperformed recently but now appear relatively expensive. Overall, the market appears fairly valued based on the "rule of 20" and prospective earnings yield relative to bonds.
3. The consensus view is that stronger world growth may benefit resources over banks, but the report finds resource stocks trading at higher valuations and lower yields compared to the major banks. The portfolios recommended overweight banks and include only one major miner.
Now you can learn the 12 golden rules of investing success. This is something that all most anyone can learn and apply to achieve greater financial security. Start with the basics and learn all the rules followed by successful investors. You can do this. The presentation is available for purchase from Scribd https://www.scribd.com/doc/241726833/The-12-Golden-Rules-of-Investing
The document discusses the DSP Healthcare Fund, which invests in Indian and overseas healthcare companies across sectors like pharmaceuticals, hospitals, diagnostics, and medical devices. It highlights secular growth drivers for the Indian healthcare industry like rising incomes, aging population, and government policies. The fund aims to benefit from increasing healthcare spending in India as well as export and global opportunities. Historical trends show the healthcare sector outperformed during periods of strong export growth and improving return ratios. The sector is currently positioned for growth as business cycles recover and valuations remain low. Investing in both Indian and US healthcare equities provides portfolio diversification benefits.
Know more on the benefits of investing in ICICI Prudential Quant Fund:
● Limited Human Intervention to avoid any biases.
● Diversification across various sectors, styles and businesses.
● Systematic approach of investing by combining investing experience and avoiding human error.
● Passive Investing through a model using a combination of factors.
● Team with prior experience in managing quantitative models for asset allocation.
This document provides an overview of the DSP Dynamic Asset Allocation Fund. The fund dynamically manages allocation between equity and debt based on attractiveness of equity markets.
The fund determines a core equity allocation by assessing market valuations using the price-to-earnings and price-to-book ratios of the Nifty 50 index. Technical signals are then used to add 10% more allocation to participate in bull markets.
The asset allocation model uses a combination of fundamental factors like market valuations and technical indicators to systematically determine equity exposure on a daily basis. This aims to reduce volatility for investors while allowing participation in equity uptrends.
The document provides an overview of the DSP Flexi Cap Fund, a flexi cap mutual fund scheme that invests across large, mid, and small cap stocks. The fund follows a core-satellite approach, with 75-80% allocated to a core portfolio of high-quality businesses based on long-term themes and 20-25% to tactical opportunities. The investment team uses a framework focusing on business strength, management quality, and growth prospects to identify companies. The fund has outperformed its benchmark over multiple periods under the management of Atul Bhole since 2016, demonstrating a better risk-adjusted return profile.
This document outlines an investment strategy that involves investing in 11 options: the S&P 500 index, 9 sector ETFs that track the different sectors of the S&P 500, and cash. The strategy aims to beat the returns of the S&P 500 index and top performing mutual funds by overallocating to sectors that outperform the overall index and avoiding underperforming sectors. The strategy is presented as simple to implement and backtested data is provided showing it achieved significantly higher returns than the S&P 500 and top mutual funds from 2006-2018.
Insight Summit 2017: Intelligent Risk Taking - Active vs passive investing
Is factor investing a bubble? - René M. Stulz, Everett D. Reese Chair of Banking and Monetary Economics, Ohio State University
Presented at the third annual Insight Summit conference held on 7 November 2017 by London Business School’s AQR Asset Management Institute.
This document discusses three investors who achieved billion-dollar fortunes through successful investing strategies:
- Warren Buffett achieved annual returns of 28% by investing in "great businesses with wide moats" and holding them for the long term.
- George Soros made $1.8 billion in 1992 by shorting the British pound and investing in German marks, epitomizing a willingness to take huge risks.
- John Paulson made $20 billion for his firm during the financial crisis by correctly betting against the US housing market and financial stocks.
The document discusses the benefits of including managed futures/commodities trading advisors (CTAs) in investment portfolios. It notes that CTAs may have an information advantage over equity and fixed income managers in interpreting commodities markets. CTAs also tend to have low or negative correlation with traditional stock and bond holdings, helping to improve risk-adjusted returns and reduce volatility for portfolios. Back-testing shows that including a 10% allocation to CTAs led to increased returns, lower volatility, and a sharper ratio for portfolios over the past 10 years compared to holdings without CTAs.
- The document provides an investment outlook and strategy for 2022, discussing themes of survival, sustainability, and the changing global order.
- It suggests 2022 may see a continuation of 2021 trends but different outcomes for investors as central banks withdraw support. Moderate returns should be expected.
- The new normal may include continued remote working, ESG as standard practice, and electric vehicles, while lower growth, rates, and inflation become accepted.
Insight Summit 2017: Intelligent Risk Taking
Portfolio construction today - Cliff Asness, Managing & Founding Principal, AQR Capital Management
Presented at the third annual Insight Summit conference held on 7 November 2017 by London Business School’s AQR Asset Management Institute.
The document describes the DSP Dynamic Asset Allocation Fund, which dynamically manages allocation between equity and debt based on an assessment of equity market attractiveness. The fund uses a two-factor model incorporating fundamental and technical signals to determine a core equity allocation ranging from 20-90%, with the remainder allocated to arbitrage and debt. Back-tested performance shows the model achieved higher returns per unit of risk compared to the Nifty 50 TRI over various time periods while also reducing volatility. The document outlines the investment process and efficacy of the model in participating in bull markets while limiting downside in bear markets.
The document provides an overview of the DSP Value Fund including its investment philosophy, performance, portfolio characteristics, and current portfolio details. Some key points:
- The fund aims to generate steady long-term returns with lower volatility than the benchmark through a conservative approach focusing on quality companies at reasonable valuations.
- Over longer time periods the fund has outperformed several benchmarks with lower volatility and drawdowns.
- The current portfolio emphasizes sectors like IT, materials, industrials, and healthcare that are seen as reasonably valued. It underweights sectors like consumer goods and financials seen as overvalued.
- Portfolio characteristics include higher dividend yield and quality metrics than the benchmark alongside lower valuations.
- Top holdings
Hilltop decorrelated fund august 2013 factsheetJohn Robertson
This document provides information on the Hilltop Decorrelated Fund, including its portfolio allocation and historical performance. The fund utilizes a multi-manager approach, investing in 10-15 hedge fund strategies across global markets that aim to deliver returns with low correlation to traditional benchmarks. In August 2013, the fund was down 0.2% with half of its 16 underlying managers positive and half negative. The document also provides details on fund terms, fees, and the investment experience and background of the fund manager.
The document discusses key considerations for retirement planning including assessing lifestyle needs and goals, understanding investment risks in retirement, ensuring adequate income and managing assets appropriately. It emphasizes creating a financial plan, diversifying investments, rebalancing portfolios over time and avoiding emotional reactions to market volatility to achieve retirement objectives.
The counsel of an advisor or financial planner, well researched and rational, often runs
headlong into the strongly held yet irrational beliefs of the client. So, herein YCharts
explores six widely held financial biases and offers for each one a chart designed to explain
the bias and prompt a productive discussion with the client.
Money Illusion. Loss Aversion. Recency Bias. Overconfidence (Self-Belief). Disposition
Effect. Anchoring (Get-Back-It is). YCharts senior contributing editor Carla Fried explains
these half-dozen examples of emotion-trumps-reason. Carla has covered investing for more
than 25 years, writing for The New York Times, Bloomberg.com and Money Magazine. Her
twice-weekly YCharts columns are available at: ycharts.com/analysis
The document discusses six common mistakes that retirees make with their finances, including not understanding risks, having the wrong time horizon, failing to understand stocks and fees, and mistakes with RRIFs. It also discusses longevity increasing and aging populations. Later it discusses risks, long term care, and being prepared for the future. Overall it provides information on financial planning issues for retirees.
The document discusses key considerations for long-term investing, focusing on longevity and the importance of making investment decisions that will allow one's money to last a lifetime. It outlines two main investment decisions - whether to take an active or passive approach, and if passive, whether to implement an indexing or asset class strategy. For the first decision, it notes that most active managers underperform the market, while passive investing aims to capture market returns at low cost. For the second decision, it explains that asset class investing seeks to maintain consistent risk exposures and has more flexibility, while indexing aims to replicate market segments.
For an intangible entity, time is starkly palpable in different ways for investors depending on whether they are making gains or suffering losses. Overall, time is a capricious companion that is loyal to none. The document then provides 10 rules for successful long-term investing: know your net worth and risk tolerance; understand any investments you make; diversify your portfolio; factor in inflation; invest in insurance; plan taxes throughout the year; prepare an emergency fund; prioritize retirement savings; learn to cut losses on underperforming investments; and regularly review your portfolio.
The fund has outperformed its benchmark over the past 6 months and since inception. A quality factor approach has underperformed recently due to high growth stocks benefiting from easy access to capital. Inflation is a concern as accommodative policies end. The fund is well positioned, with its multi-factor approach of quality, growth and value performing well in both "overheating" and "stagflationary" periods according to an analysis of factor performance during different macroeconomic conditions. Quality has outperformed in stagflationary periods while value has done well in overheating periods.
1. The Australian equity market has increased 24% from its March low but remains below levels from three years ago. The report predicts continued bull market conditions with the All Ordinaries index reaching 3,650, implying almost 15% total returns over the next 12 months.
2. Small cap stocks have outperformed recently but now appear relatively expensive. Overall, the market appears fairly valued based on the "rule of 20" and prospective earnings yield relative to bonds.
3. The consensus view is that stronger world growth may benefit resources over banks, but the report finds resource stocks trading at higher valuations and lower yields compared to the major banks. The portfolios recommended overweight banks and include only one major miner.
Now you can learn the 12 golden rules of investing success. This is something that all most anyone can learn and apply to achieve greater financial security. Start with the basics and learn all the rules followed by successful investors. You can do this. The presentation is available for purchase from Scribd https://www.scribd.com/doc/241726833/The-12-Golden-Rules-of-Investing
The document discusses the DSP Healthcare Fund, which invests in Indian and overseas healthcare companies across sectors like pharmaceuticals, hospitals, diagnostics, and medical devices. It highlights secular growth drivers for the Indian healthcare industry like rising incomes, aging population, and government policies. The fund aims to benefit from increasing healthcare spending in India as well as export and global opportunities. Historical trends show the healthcare sector outperformed during periods of strong export growth and improving return ratios. The sector is currently positioned for growth as business cycles recover and valuations remain low. Investing in both Indian and US healthcare equities provides portfolio diversification benefits.
Know more on the benefits of investing in ICICI Prudential Quant Fund:
● Limited Human Intervention to avoid any biases.
● Diversification across various sectors, styles and businesses.
● Systematic approach of investing by combining investing experience and avoiding human error.
● Passive Investing through a model using a combination of factors.
● Team with prior experience in managing quantitative models for asset allocation.
This document provides an overview of the DSP Dynamic Asset Allocation Fund. The fund dynamically manages allocation between equity and debt based on attractiveness of equity markets.
The fund determines a core equity allocation by assessing market valuations using the price-to-earnings and price-to-book ratios of the Nifty 50 index. Technical signals are then used to add 10% more allocation to participate in bull markets.
The asset allocation model uses a combination of fundamental factors like market valuations and technical indicators to systematically determine equity exposure on a daily basis. This aims to reduce volatility for investors while allowing participation in equity uptrends.
The document provides an overview of the DSP Flexi Cap Fund, a flexi cap mutual fund scheme that invests across large, mid, and small cap stocks. The fund follows a core-satellite approach, with 75-80% allocated to a core portfolio of high-quality businesses based on long-term themes and 20-25% to tactical opportunities. The investment team uses a framework focusing on business strength, management quality, and growth prospects to identify companies. The fund has outperformed its benchmark over multiple periods under the management of Atul Bhole since 2016, demonstrating a better risk-adjusted return profile.
This document outlines an investment strategy that involves investing in 11 options: the S&P 500 index, 9 sector ETFs that track the different sectors of the S&P 500, and cash. The strategy aims to beat the returns of the S&P 500 index and top performing mutual funds by overallocating to sectors that outperform the overall index and avoiding underperforming sectors. The strategy is presented as simple to implement and backtested data is provided showing it achieved significantly higher returns than the S&P 500 and top mutual funds from 2006-2018.
Insight Summit 2017: Intelligent Risk Taking - Active vs passive investing
Is factor investing a bubble? - René M. Stulz, Everett D. Reese Chair of Banking and Monetary Economics, Ohio State University
Presented at the third annual Insight Summit conference held on 7 November 2017 by London Business School’s AQR Asset Management Institute.
This document discusses three investors who achieved billion-dollar fortunes through successful investing strategies:
- Warren Buffett achieved annual returns of 28% by investing in "great businesses with wide moats" and holding them for the long term.
- George Soros made $1.8 billion in 1992 by shorting the British pound and investing in German marks, epitomizing a willingness to take huge risks.
- John Paulson made $20 billion for his firm during the financial crisis by correctly betting against the US housing market and financial stocks.
The document discusses the benefits of including managed futures/commodities trading advisors (CTAs) in investment portfolios. It notes that CTAs may have an information advantage over equity and fixed income managers in interpreting commodities markets. CTAs also tend to have low or negative correlation with traditional stock and bond holdings, helping to improve risk-adjusted returns and reduce volatility for portfolios. Back-testing shows that including a 10% allocation to CTAs led to increased returns, lower volatility, and a sharper ratio for portfolios over the past 10 years compared to holdings without CTAs.
- The document provides an investment outlook and strategy for 2022, discussing themes of survival, sustainability, and the changing global order.
- It suggests 2022 may see a continuation of 2021 trends but different outcomes for investors as central banks withdraw support. Moderate returns should be expected.
- The new normal may include continued remote working, ESG as standard practice, and electric vehicles, while lower growth, rates, and inflation become accepted.
Insight Summit 2017: Intelligent Risk Taking
Portfolio construction today - Cliff Asness, Managing & Founding Principal, AQR Capital Management
Presented at the third annual Insight Summit conference held on 7 November 2017 by London Business School’s AQR Asset Management Institute.
The document describes the DSP Dynamic Asset Allocation Fund, which dynamically manages allocation between equity and debt based on an assessment of equity market attractiveness. The fund uses a two-factor model incorporating fundamental and technical signals to determine a core equity allocation ranging from 20-90%, with the remainder allocated to arbitrage and debt. Back-tested performance shows the model achieved higher returns per unit of risk compared to the Nifty 50 TRI over various time periods while also reducing volatility. The document outlines the investment process and efficacy of the model in participating in bull markets while limiting downside in bear markets.
The document provides an overview of the DSP Value Fund including its investment philosophy, performance, portfolio characteristics, and current portfolio details. Some key points:
- The fund aims to generate steady long-term returns with lower volatility than the benchmark through a conservative approach focusing on quality companies at reasonable valuations.
- Over longer time periods the fund has outperformed several benchmarks with lower volatility and drawdowns.
- The current portfolio emphasizes sectors like IT, materials, industrials, and healthcare that are seen as reasonably valued. It underweights sectors like consumer goods and financials seen as overvalued.
- Portfolio characteristics include higher dividend yield and quality metrics than the benchmark alongside lower valuations.
- Top holdings
Hilltop decorrelated fund august 2013 factsheetJohn Robertson
This document provides information on the Hilltop Decorrelated Fund, including its portfolio allocation and historical performance. The fund utilizes a multi-manager approach, investing in 10-15 hedge fund strategies across global markets that aim to deliver returns with low correlation to traditional benchmarks. In August 2013, the fund was down 0.2% with half of its 16 underlying managers positive and half negative. The document also provides details on fund terms, fees, and the investment experience and background of the fund manager.
The document discusses key considerations for retirement planning including assessing lifestyle needs and goals, understanding investment risks in retirement, ensuring adequate income and managing assets appropriately. It emphasizes creating a financial plan, diversifying investments, rebalancing portfolios over time and avoiding emotional reactions to market volatility to achieve retirement objectives.
The counsel of an advisor or financial planner, well researched and rational, often runs
headlong into the strongly held yet irrational beliefs of the client. So, herein YCharts
explores six widely held financial biases and offers for each one a chart designed to explain
the bias and prompt a productive discussion with the client.
Money Illusion. Loss Aversion. Recency Bias. Overconfidence (Self-Belief). Disposition
Effect. Anchoring (Get-Back-It is). YCharts senior contributing editor Carla Fried explains
these half-dozen examples of emotion-trumps-reason. Carla has covered investing for more
than 25 years, writing for The New York Times, Bloomberg.com and Money Magazine. Her
twice-weekly YCharts columns are available at: ycharts.com/analysis
The document discusses six common mistakes that retirees make with their finances, including not understanding risks, having the wrong time horizon, failing to understand stocks and fees, and mistakes with RRIFs. It also discusses longevity increasing and aging populations. Later it discusses risks, long term care, and being prepared for the future. Overall it provides information on financial planning issues for retirees.
The document discusses principles of behavioral finance and long-term investing. It notes that investors tend to be overconfident and influenced by short-term gains. Successful long-term investing requires discipline, focusing on asset allocation and diversification, and ignoring short-term noise and market hype. The key is developing a personalized investment policy and sticking to a plan through different market conditions.
- The document is an Invesco client guide that provides information about mutual funds and investing.
- It discusses what mutual funds are, the benefits they provide, and the different types including money market, stock, bond, and balanced funds.
- It also outlines strategies for building wealth through dollar-cost averaging and provides an investment profile questionnaire to help clients determine their risk tolerance and preferred investment style.
MarketTrend Advisors - Coping With Bear Markets 023009Garrett Beauvais
This presentation provides a historical review of the returns of prior bull markets and bear markets and recommends an active investment strategy to capture gains and avoid losing money during secular bear markets.
The document recommends a market neutral or zero beta portfolio for the next 12 months due to challenging market conditions. It believes many stocks are overvalued and will trend lower or stagnate while market performance will diverge. It also cites increased geopolitical risk and volatility. The document then discusses its proprietary stock selection model and examples of stocks it identified early that performed well, as well as some that declined, before concluding by recommending rotating assets into a market neutral strategy and adding an alpha growth strategy based on stock picking.
This document discusses retirement planning and decumulation strategies. It provides historical context on retirement in Greek culture and the transition to individual saving. It also discusses the challenges facing retirees in the US, including managing withdrawals, market risks, and longevity risks. The document advocates for combining safety and growth in retirement portfolios, and outlines strategies like target date funds, income replacement, and combining various account types to help solve decumulation challenges.
Modern Investing: Is it Different this Time?osubucs
This document discusses modern investing and provides arguments for staying invested in the market during periods of crisis and volatility. It presents data showing the S&P 500 typically recovers following geopolitical events and market declines. It also notes the potential impact on returns of missing only a few of the best trading days. The document then discusses asset allocation, determinants of portfolio performance, and introduces Legend Advisory Corporation as a professional money manager that uses an asset allocation model and fund selection process.
The document discusses market volatility and strategies for dealing with it. It defines volatility, looks at historical volatility levels, and discusses how volatility affects investors. It then outlines the wealth management group's strategies, which include repositioning portfolios to focus on quality income assets, employing strategies to dampen volatility, and ensuring portfolios align with clients' goals and risk tolerance.
This document discusses volatility and provides strategies for managing risk. It begins by stating that moderate volatility is healthy for financial markets as it separates strong from weak investments. The document then discusses three components needed for a well-functioning financial system: cognitive diversity among investors, full disclosure of information, and rewards/penalties for correct/incorrect views. It suggests investors should focus on owning businesses rather than reacting to market fluctuations, and construct diversified portfolios that are not overly correlated with any single index. Strategies discussed for managing risk include owning a variety of assets, investing globally for currency exposure benefits, and focusing on long-term goals rather than short-term volatility.
Aig Sun America Asset Allocation StrategiesAIGdocs
The document discusses the benefits of asset allocation over trying to time the market or guess which asset classes will perform best. It recommends investing for the long term using a disciplined asset allocation strategy rather than making emotional investment decisions. Research from DALBAR shows that investors who tried to time the market earned significantly less over 19 years than a simple index fund following the S&P 500, highlighting the flaws of short-term thinking. The document promotes SunAmerica's asset allocation strategies which offer diversification across managers and styles for consistent long-term returns.
So how do you value the share price of stock for a given company? In other words, what is the intrinsic value of a given stock? Generally speaking, a stock is valued based on the company’s current financial state and what the market believes the company’s future financial state will look like. https://carnick.com/
The document provides an overview of the economic crisis that began in late 2007 and discusses recommendations for investors. It notes that the collapse of subprime lending and the housing bubble led to widespread credit problems and market declines. While the situation remains challenging, following principles like diversification and long-term perspective can help investors navigate volatile markets and find opportunities for future growth as the economy recovers.
A Target Retirement Income Plan is a nonqualified, supplemental, after-tax executive retirement benefit program that changes the focus from return on investment to certainty of predictable income in retirement.
The document discusses strategies for creating an investment portfolio based on Nobel Prize-winning academic research. It recommends structuring portfolios to take advantage of factors like company size, relative price, and profitability that have been shown to increase returns. Specifically, it suggests investing more in small and value stocks, as both have higher returns than large or growth stocks over the long run. The document also provides examples of model portfolios that diversify across global stock and bond index funds targeting these factors.
A look at how we got into this mess of a financial meltdown, what to do in the midst of it, and how to capitalize going forward. This presentation illustrates the need of hiring a professional advisor to help you manage your emotions during times of uncertainty.
This document discusses dividend investing strategies. It makes the following key points:
1) Dividend investing tends to outperform during periods of market volatility and below average returns, as dividend income provides downside protection.
2) Dividends have accounted for about one-third of the total return of the S&P 500 since the 1970s, so excluding dividend stocks puts investors at a disadvantage.
3) The best dividend strategies focus on high quality stocks with growing dividends, cash flows, and earnings, not just high yields, to identify opportunities with sustainable payouts.
Reinventing Your Retirement New Realities For New Challenges For Clear ViewSteve Stanganelli
This presentation is part of the Transition Assistance Plan workshop series offered through Salem Works.
While many things in life are uncertain, we can control how we make better decisions. This presentation highlights the fundamental approach needed for short-term fixes and getting back on track long-term.
Similar to Summer Intern Project - Grace Chmiel (20)
Reinventing Your Retirement New Realities For New Challenges For Clear View
Summer Intern Project - Grace Chmiel
1. Stability Investment Solutions Diligence Client-centric
A Psychological Analysis of the Current
Investor Sentiment and Positioning
Presented to:
Global Allocation Fund
Steve Auth & Team
Presented by:
Grace Chmiel
Summer Intern: Investment Management - Global Equity
Department
Distributor Information/Disclosure/Product Code or Tracking Number
2. Key Question
Did the '08-'09 bear market so scar investors
that their "normal" balancing of risk and reward
was semi-permanently thrown off balance?
Institutional Sales Material. Not to be reproduced or shown to the public. (control through Header/Footer option)
1
3. Bottom Line
Investors are psychologically scared from the 08/09 Great Recession. Without recognizing the
psychological impact the Great Recession had, investors rely on traditional economic approach to
analyze current market trends which – by definition includes human judgment to make decisions –
thereby blurring the investors lens to foresee a positive end market.
They have Psychological Constraints:
Heuristics
Over confidence
Narrowing framing
Much more sensitive to losses than gains
Aversion to ambiguity
Fear of regret
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4. If “yes,” then we should observe…
1. The traditional "Wall of Worry" which fuels bull markets should last longer than usual
2. "Animal Spirits" which drive economic activity should take longer to recover
3. Portfolio management models built on extrapolating past risk reward relationship may miss
estimate future market returns
4. Government officials responsible for the economy (eg the Fed) should be likely to take
longer to raise rates/tame the recovery
5. Equities should be likely to remain under fair value or normal value vs bonds for longer than
usual
6. Investors should be slow to re-allocate into equities
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American Association of Individual Investors
The Traditional “Wall of Worry” which fuels bull markets should last longer
than usual
AAII survey measures the percentage of individual investors who are bullish,
bearish, and neutral on the stock market for the next six months
The Savvy Investor knows to pay attention to general market conditions like “irrational exuberance” and the “wall or
worry”
Like Warren Buffett once said: “We simply attempt to be fearful when others are greedy and to be greedy when others
are fearful.”
The first sign of this: Sentiment Surveys are reporting Investors are leaning Bearish on the stock market for the next six
months
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Even in recent weeks, investors continue to sway neutral/bearish
The Traditional “Wall of Worry” which fuels bull markets should last longer
than usual
But are they doing what they are saying?
Shift to Bear Sentiment
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5.88%
16.04%
1.02%
51.56%
24.30%
1.14%
2007
4.85%
14.56%
3.42%
47.70%
26.63%
3.36%
2013
Investors are doing what they are “saying.”
Current Bull Market show significant asset allocation changes relative to previous bull markets
The Traditional “Wall of Worry” which fuels bull markets should last longer
than usual
5.36% 6.37%
0.77%
63.17%
20.45%
3.88%
Asset Allocation 1998
Cash
Domestic Bonds
International Bonds
Domestic Equity
International Equity
Other
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Based on “averages”, this current 2009 Bull Market should expect a recession soon
Example: In the past 11 business cycles between 1945-2009, as defined by NBER, the average trough to
trough lasts 69.5 months. Since NBER defined end of Great Recession in June 2009 – it’s been 60
months – 9.5 months away from next expected recession (on average)
Traditional “Animal spirits” have dissipated due to contagious bear ideas
"Animal Spirits" which drive economic activity should take longer to recover
9. "Animal Spirits" which drive economic activity should take longer to recover
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Bear Markets: Average % drop in S&P 500
• Little Bear : - 21.51%
• Big Bear: - 49%
• 08/09 Crash: - 57%
84.70% 89.00%
111%
170%
185%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
180.00%
200.00%
Little Bear Big Bear Big Bear (excluding
'37)
2013 August 2014
% Move off Low on S&P 500 5 Years Out of Bear Market
---------------
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-66%
-48%
-10% -4%
26%
38%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
1929 - 1933 1937 - 1938 1973 - 1974 2001 - 2001 2007 - 2009 Little Bear
Where were the Big Bear markets 5 Years Out compared
to previous high in S&P 500?
% abv/blw
Previous High
on S&P 500
"Animal Spirits" which drive economic activity should take longer to recover
This suggests
we have
room to grow
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3.17%
4%
1.80%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
Little Bear Big Bear 2013
GDP Growth Rate 5 Years Out
GDP Growth Rate
* Zarnowtiz Rule: deep recessions follow steep recoveries
"Animal Spirits" which drive economic activity should take longer to recover
5 Years Out after
Big Bear
GDP
Growth Rate
1937 5.10%
1943 17%
1979 3.20%
2006 2.70%
12. Government Officials responsible for the economy should be likely to take
longer to raise rates/ tame the recovery
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4.67%
11%
0%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Little Bear Big Bear 2014
Average Fed Funds Rate 5 Years Out
Fed has learned from its mistake from the Great Recession and it is
maintaining a low interest rate for a longer period of time
The lack of fiscal policy has hurt GDP growth
13. Portfolio Management Models built on extrapolating past risk reward relationship may
miss estimate future market returns
The past 10 years were far from “normal”
Great Recession was about 2 standard deviation increase in volatility
One standard deviation increase in volatility was associated with a 0.5% reduction in annual growth
(Ramey and Ramey, 1995)
Lower consumer spending (Romer 1990)
Investment and hiring (Bloom 2009)
Trade (Handley and Limao 2012, Novy and Taylor 2012)
Exposure to exogenous variations in energy and currency volatility depresses investment, hiring and advertising
Uncertainty increases in R&D spending
Firms less sensitive to business conditions drivers like demands, prices and productivity
High uncertainty can reduce the impact of stimulus policies like interest rate and tax cuts
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12
14. As of June 2, 2014.
Past performance is no guarantee of future results.
This chart is for illustrative purposes and not representative of a specific investment.
S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States.
EPS = Earnings Per Share
P/E = Price to Earnings
March 24, 2000
$1,527.46
$56.13 EPS
27.2x P/E
6.79% 10 Year Treas
Implied Target P/E 14.7x
Overvaluation 85%
August 25, 1987
$336.77
$19.55 EPS
17.2x P/E
8.78% 10 Year Treas
Implied Target P/E 11.4x
Overvaluation 51%
March 6, 2009
$666.79
$61.00 EPS
10.9x P/E
2.055% 10 Year Treas
Implied Target P/E 48.7x
Undervaluation 78%
October 4, 2011
$1,074.77
$96.57 EPS 2011E
11.1x P/E
1.67% 10 Year Treas
Implied Target P/E 59.9x
Undervaluation 81%
June 4, 2012
$1,266.74
$104.44 EPS 2012E
12.1x P/E
1.44% 10 Year Treas
Implied Target P/E 69.4x
Undervaluation 83%
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Current Valuation
May 29, 2014
$1,920.00
$117.00 2014E EPS
16.4x P/E
2.40% 10 Year Treas
Implied Target P/E 41.7x
Undervaluation 61%
Equities should be likely to remain below fair value or normal value vs bonds for longer
than usual
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0
100
200
300
400
500
600
700
0-1
yrs
1-2
yrs
2-3
yrs
3-4
yrs
4-5
yrs
5-6
yrs
6-7yrs 7-8
yrs
8-9
yrs
9-10
yrs
10-15
yrs
15+
yrs
#ofManagers
# of Years with Fund
22.25%
24.67%
20.55%
12.56%
10.57%
7.05%
2.35%
% of Total Mangers by # Years with
Fund
>2 yrs
2-4 yrs
4-6 yrs
6-8 yrs
8-10 yrs
10-15 yrs
15+ yrs
1/3 of Managers of have been with a
Fund for 6+ years
# of Managers Organized by # Years with Fund
Investors should be slow to re-allocate into equities
…Because of the lack of cognitive diversity
Cognitive Diversity allows investors to rebalance the thrown off “risk and reward” by
adding unique perspectives that would otherwise be absent. It also takes away or least
weakens, some of the destructive characteristics of group decision making.
16. Appendix
Bear Market
5 Years Out
(12-31-19xx)
% down in S&P
500
% Move off Low 5
Years Out
%Move off Low
(Cycle Peak)
% abv/blw
Previous High 5
years Out
GDP Growth Rate 5
Years Out
Yield on 10yr Note 5
Years Out
P/E Fed Funds Rate 5
Years Out5 Years Out
1929 - 1933 1937 -84.80% 169% 322% -66% 5.10% N/A 10.5 N/A
1937 - 1938 1943 -54.50% 25% 145% -48% 17% N/A 12.6 N/A
1945 - 1946 1949 -28% 70% 90% 23% 8.7% N/A 7.5 N/A
1948 - 1949 1954 -21% 158% 96% 105% -0.6% N/A 12.6 1%
1957 - 1958 1963 -20.50% 62% 84% 7% 4.4% 4.1 18.8 3.5%
1960 - 1961 1965 -28% 84% 105% 31% 6.5% 4.7 17.8 4.3%
1965 - 1967 1971 -22% 40% 83% -6% 3.30% 5.9 18.0 4.9%
1969 - 1970 1975 -36% 30% 73% -25% -0.2% 7.76 11.8 7.5%
1973 - 1974 1979 -48% 74% 125% -10% 3.20% 10.3 7.4 15.5%
1981 - 1982 1987 -26% 141% 228% 139% 3.50% 8.85 14.0 8.5%
1987 - 1988 1993 -33% 93% 114% 30% 2.70% 6.6 21.3 3%
2001 - 2001 2006 -49% 89% 101% -4% 2.70% 4.71 17.4 6.75%
2007 - 2009 2013 -57% 170% 185% 26% 1.80% 3.04 19.1 0%
Average -37.57% 86.22% 130.50% 14.68% 3.42% 7.3 14.1 6.11%
Big Bear
(x < - 40) -59% 89% 173% -32% 4% 7.5 12.0 11%
Little Bear
(-40 < x < - 20) -26.81% 84.70% 109.13% 38.03% 3.17% 7.1 15.2 4.67%
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NBER defined 11 recessions between 1945- 2009
On Average:
• Contraction – peak to trough: 11.1 m
• Expansion – previous trough to this peak: 58.4 m
• Trough from previous trough - 69.5 m
• Peak from previous peak – 68.5 m
Since NBER defined end of Great Recession in June 2009 – it’s been 60 months – 8.5 months away from
next expected recession (on average)
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3.98
19.63
5.28
62.01
3.60 1.68
Federated Asset Allocation 1998
Cash
Domestic Bonds
Internation Bonds
Domestic Equity
Internation Equity
Other
1.97
16.82
5.40
31.45
40.36
3.39
Federated 2013
2.79
22.83
1.82
33.72
35.73
0.74
Federated 2007
Appendix
*Federated average Tenure Manger : 7.09 years