One of the most common complaints I hear about the markets is that they are "divorced from reality", that they aren't acting as the current economic data would seem to dictate. I've been in this business for 30 years and I think I first heard that in year one. Or maybe even before I decided to lose my mind and [...]
There's an old saying on Wall Street that one should "buy the rumor, sell the news", a pithy way to express the efficient market theorem. By the time an event arrives, whatever it may be, the market will have fully digested the news and incorporated it into current prices. And then the market will move on to anticipating the next [...]
If you had known in October all that would transpire over the next 2 ½ months, how would you have positioned your portfolio? The conventional wisdom before the election was that a Biden win would be negative for stocks because he has promised to raise taxes and specifically corporate taxes. In 2016, conventional wisdom was that a Trump victory would [...]
One of the advantages we enjoy here at Alhambra is the opportunity to interact with a lot of investors. We talk to hundreds of individual investors on a monthly basis, giving us a front-row seat to everyone’s fear and greed. Economic data tells us about the past, which isn’t particularly useful for investors focused on the future. Sentiment, though, is [...]
Our Fortress strategic asset allocation includes 5 distinct asset classes: The Fortress allocation has historically produced better risk-adjusted returns than the traditional 60% stocks/40% bonds allocation. The bond allocation is varied to adjust the risk of the portfolio. A Fortress allocation with 20% bonds has produced a higher return with lower standard deviation (volatility) than the 60/40 portfolio. In a [...]
The stock market has recovered most of its losses from the March COVID-19 induced sell-off and the enthusiasm with which stocks are being bought – and sold but mostly bought – could lead one to believe that the crisis is over, that the economy has completely or nearly completely recovered. Unfortunately, other markets do not support that notion nor does [...]
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