Category: Alternative Investment Strategy
Call me a Pessimist
All investors know the adage to “buy high and sell low” but few adhere to it. We can see this with record volume to start July trading coming mostly from retail investors as the S&P reaches another all time high. Perhaps I have been in the futures industry too long because when things are “too […]
Hedging an equity portfolio: Volatility
In our last article, “Why Traditional Hedges Fail,” we opined that most traditional hedges had significant weaknesses and did not have many characteristics of a great hedge. Volatility (long positions in VIX futures), while not perfect, has a number of these favorable characteristics for hedging an equity portfolio. The characteristics of an excellent equity hedge […]
A Better SPY?
Index investing is all the rage now, with over a trillion dollars invested in the SPY and VOO ETFs alone. Low fees coupled with broad market exposure are expected to be better for your portfolio than an actively managed strategy with higher fees. One could argue that as the indices’ components attract more capital flow, […]
Inflation Coming?
Want to play a “fun” game? Go to Google and type “currency crisis (insert any country name)” and see your results. Luckily for Americans, you will find that the United States is one of the few countries that have avoided this designation so far. As one of my Polish friends who immigrated asked me, “Why […]
Why Traditional Hedges Fail
An article by Scot Billington, Covenant Capital Management Unfortunately, most traditional hedges fail to deliver in several key areas. Buy-and-hold investing has been wildly successful since 1982; however, its adherents have had to endure two 50% drawdowns, a 25% down day, and 14 years of zero return. Long-term wealth is significantly impacted by drawdowns of […]
Futures Contracts are Easy. You are Already Using Them.
I have spent over a decade in the futures industry, so I am accustomed to blank stares when I tell people what I do. Most immediately assume it is too complicated to even try to understand. The ironic thing is that we all intuitively understand them already. We trade them all the time. We can […]
Market Sentiment. I feel that you should pay attention.
Market sentiment is a broad term that encompasses the prevailing feeling that investors have about a market. Measuring this “feeling” can be accomplished in a variety of ways. CNNMoney has a Fear and Greed Index that displays this in a simple format showing when investors are most willing to take on risk or hunker down. […]
Investment Portfolio Design for an Unpredictable World
Investors are always faced with choices. My experience tells me that these choices are often driven by simple quirks of human behavior. Two of these that seem to be big drivers seem to be recency bias and a desire for simplification. Both of these naturally make us poor investors. For example, in March of 2020 […]
We Are All Survivors
Duncan Coker — Rivercast Capital Management — January 2020 Congratulations! If you are reading this article, you are a survivor! Granted, on some days, nothing seems to go right, but compared to the alternative, life is good. It tends to give us an optimistic outlook, as it should. Optimism is a great thing; without it, […]
Understanding Alternative Investment Strategies: Exploring Crisis Alpha Opportunities
Disclaimer While investment in managed futures can help enhance returns and reduce risk, it can also do just the opposite and, in fact result in further losses in a portfolio. In addition, studies conducted on managed futures as a whole may not be indicative of the performance of any individual CTA. The results of studies […]
Why does momentum investing work?
Conventional wisdom says that it should be doomed once any stock-picking strategy nears “sure thing” status. If everyone knows the secret to vast riches, how could the strategy possibly work anymore? But there is a successful strategy that has been followed — and widely discussed — for decades, yet somehow persists as a relatively reliable […]
From Hedge Funds to Passive Investing: The Need for a Paradigm Shift in Endowments
Endowments are supposed to be the smart money, yet if you review the recent exhaustive paper on return performance, you will get a different impression. Large endowments do better than small endowments, but when you compare with a simple 60/40 stock bond balanced fund, there is not a lot of alpha generated. See “Investment Returns and […]
The Growing Impact of Industry Domination on Futures Markets
Few will disagree that competition through a diverse set of independent traders is good for futures markets trading. Still, this issue should be broadened to the subtle impact of general competition across firms in the economy, not just the futures markets themselves. A growing set of recent research suggests that the US is becoming less […]