Advisers Ditch 'Buy and Hold' for New Tactics
Groups | Search | About
User Password
Register Now! Lost Password?

Financial Planning - Financial planning in general. (Moderated) 

get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
Advisers Ditch 'Buy and Hold' for New Tactics Igor Chudov 04-28-2009
Posted by Igor Chudov on April 28, 2009, 11:04 pm
http://online.wsj.com/article/SB124096109870565775.html

A small part of the article is included here for space and copyright
reasons. For the rest (on my webspace) see URL below.

``The broad decline across financial markets in the past year has
persuaded a small but growing number of financial advisers to abandon
the traditional buy-and-hold strategy -- which emphasizes long-term
investing in a mix of assets -- for a new approach geared to sidestep
future market plunges and ease volatility.

....

Today, Mr. Seymour keeps about 90% of his clients' money in such
low-risk investments as short-term bonds, cash and gold. With some of
the small amount that's left over, he uses leveraged exchange-traded
funds to place magnified bets both on and against the Standard &
Poor's 500-stock index.''

The rest is here:

http://igor.chudov.com/tmp/advisers.txt

What do you think? For the record, this probably does not represent
all advisors, but I would not be surprised if it covers most of them.

i


Posted by anoop on April 29, 2009, 1:21 am
> http://online.wsj.com/article/SB124096109870565775.html
[..]
>
> Today, Mr. Seymour keeps about 90% of his clients' money in such
> low-risk investments as short-term bonds, cash and gold. With some of
> the small amount that's left over, he uses leveraged exchange-traded
> funds to place magnified bets both on and against the Standard &
> Poor's 500-stock index.''

This would be the Zvi Bodie strategy.

Anoop


Posted by JoeTaxpayer on April 29, 2009, 10:37 am


>
>>http://online.wsj.com/article/SB124096109870565775.html
>
> [..]
>
>>Today, Mr. Seymour keeps about 90% of his clients' money in such
>>low-risk investments as short-term bonds, cash and gold. With some of
>>the small amount that's left over, he uses leveraged exchange-traded
>>funds to place magnified bets both on and against the Standard &
>>Poor's 500-stock index.''

Is the author suggesting Gold is low-risk, or am I parsing the sentence
incorrectly as I read it?
Joe
www.joetaxpayer.com


Posted by Igor Chudov on April 29, 2009, 11:30 am
>>>Today, Mr. Seymour keeps about 90% of his clients' money in such
>>>low-risk investments as short-term bonds, cash and gold. ...
>
> Is the author suggesting Gold is low-risk, or am I parsing the sentence
> incorrectly as I read it?

Yes, the author wrote that gold is low risk. I would read it as the
opinion of both the author as well as the cited advisor.

I do not consider gold to be a safe investment at this price.

i

> Joe
> www.joetaxpayer.com
>


Posted by on April 29, 2009, 2:11 am

> http://online.wsj.com/article/SB124096109870565775.html

> ``The broad decline across financial markets in the past year has
> persuaded a small but growing number of financial advisers to abandon
> the traditional buy-and-hold strategy -- which emphasizes long-term
>
> What do you think? For the record, this probably does not represent
> all advisors, but I would not be surprised if it covers most of them.

The article says 15% of the 500 advisors they polled are
significantly changing their strategy.

I'd like to know how much of it is that suddenly some folks
have decided that they know how to time the markets when
previously they didn't - versus how many of them suddenly
realized that they and their clients are more risk-averse
than they all had thought they were during the bull market.

During the bull market, nobody wanted to be at the traditional
60/40 allocation - why miss out on all that stock-market upside?
Now that they've been blown out of the water with 50% losses
in their equity portfolios the 22% loss last year on a dead
simple 60/40 index portfolio looks pretty brilliant. But
folks - both the markets and investors - always seem to
behave by looking backwards. Cash and treasuries did best
during the disastrous 2008, so now all those backwards-looking
folks are thinking that if they position their portfolios
for 2008, they'll look brilliant. If they were really
brilliant, wouldn't they have made all these adjustments
*before* this unpleasantness? Are they really going to
know how/when to get back in?

As I said in another note recently, start with a 60/40
index-based portfolio and unless you can offer some very
convincing evidence that you can improve on it - not
anomalous evidence ("last year stocks stank!") - leave
it alone.

How many times have we all heard "It's different this time"?
And how many times has it really been different?


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting


Similar ThreadsPosted
How hold stocks? April 10, 2009, 2:06 pm
Hold Financial Preferreds? July 22, 2008, 5:09 am
Financial Guru: Buy-and-Hold a Thing of the Past January 6, 2009, 6:01 pm

other essential online resources:
United States Treasury
US Securities and Exchange Commission
New York Stock Exchange
Tokyo Stock Exchange
Accounting and Tax Software Forums
Contact Us | Privacy Policy   XML SitemapXML Sitemap