Investors have always been taught that diversification is good — good for long term performance.
But, there’s such thing as too much diversification. In a new paper, GrizzlyRock Capital’s Kyle Mowery discusses how investor performance is affected by being too diversified and what he and other smart investors do to create more focused — best ideas — portfolios.
Listen to the FULL episode
About Kyle Mowery
Kyle is the Managing Director of GrizzlyRock Capital, which invests in long/short corporate credit and equity securities utilizing a fundamental valued-based style.
Even More Resources
Lending Club produced a nice new video I liked and thought you’d appreciate seeing.
In 5 years, the firm has underwritten over $1B in peer-to-peer loans and is on fire. As I’ve written before, I believe the direct personal loan is on its way to becoming a new asset class in investor portfolios, thanks to Lending Club.
- Listen to my interview with Lending Club founder and CEO, Renaud Laplanche
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Many investors know intuitively that making investment research more social SHOULD lead to better outcomes.
The truth is, we’re just beginning to figure out how social media can impact investment performance…and a new firm, SprinkleBit is going to help forward this conversation in a major way.
SprinkleBit is rolling out a full-suite of research and trading tools, all centered around the social aspect of investment research. Founder and CEO Alexander Wallin joins us to talk about social investing, how to empower investors to make better decisions, and his product roadmap to roll-out social enabled trading.
Listen to the FULL episode
Alexander Wallin is the co-founder and CEO of SprinkleBit.
Continue reading “Using social and crowdsourcing to make better investment decisions – with Alexander Wallin”
The investing landscape has changed tremendously over the past few years — mostly in ways that directly benefit individual investors.
- Transparency is increasing
- Fees are decreasing
- Brokers are being phased out in favor of Registered Investment Advisors
- Assets are moving from expensive, actively managed mutual funds to low cost, passively managed exchange traded funds (ETFs)
It’s this last piece that is going to serve as the focal point for this post. In fact, assets invested in U.S. ETFs just exceeded $1 trillion.
ETFs growing like weeds, investors struggle to keep up
If ETFs have evolutionized (it’s not really a revolution) our investment choices, information and commentary on how to use ETFs haven’t quite kept pace. Investors struggle to understand exactly what an ETF’s strategy is and how it’s managed.
Heck, professionals are drowning in trying to make sense of all the new ETF offerings.
A new platform, called Motif Investing, may be changing all this…
Continue reading “Beginner’s Guide to Motif Investing”
I frequently meet people with really compelling investment strategies and ideas.
Hey, can you help me raise some money?
They’re looking for help putting together a fund to demonstrate exactly how good their strategy or stock picking really is.
Starting a fund is hard…and expensive
It’s not that I can’t really help them — it’s that starting a hedge fund or mutual fund is pretty complicated and expensive. You need to see significant growth in assets to be able to scale these things to profitability (once they achieve that, though, they’re pretty damn profitable).
Like any startup, the chances of these startup funds achieving escape velocity — getting enough traction to turn their good ideas into profitable ones — is pretty slim.
But, there are other ways of putting your investing talent to work and make money while doing it — all without the headache and onerous infrastructure needed to manage a fund or a regulated investment advisory.
How to make money from your investment ideas (without starting a fund or having $$)
Here are 5 ways to get started selling your portfolio strategies:
Continue reading “Sell your investment strategies (without the cost and burden of creating a fund)”
There’s no lack of good investing ideas.
We all come across good, compelling investment themes in our work lives, at home, at the store.
Where we struggle as investors is finding the appropriate investing vehicle to capture our ideas. That’s where Motif Investing comes in.
Join me and co-founder/CEO of Motif Investing, Hardeep Walia for a discussion of the new investment platform, idea-driven investing, and the future of finance.
Listen to the FULL interview
Hardeep is the cofounder and CEO of Motif Investing. He’s an successful entrepreneur and spent 6 years at Microsoft.
Continue reading “Investing in ideas – with Motif Investing’s Hardeep Walia”
What it does: Betterment has one of the easiest-to-use, slickest interfaces to manage a balanced portfolio for long-term investors. Fund your account (you can automate this) and dial in your preferred risk mix and Betterment chooses a basket of exchange-traded funds (ETFs) for your portfolio in accordance to Modern Portfolio Theory. You don’t ever need to decide on what to buy if that’s not your thing.
Particular strengths: For investors who don’t want to be overwhelmed with investing decisions or jargon about individual securities, Betterment has done a really effective job removing the confusing part by getting investors to focus on what really matters: setting goals, focusing on time-frame, and risk.
How popular is it: As of November 2011, Betterment reported that it had 10,000 accounts and $36 million under management.
Management: Betterment was founded by Jonathan Stein, an experienced professional on the technology side of the financial industry.
Company Size: Betterment has 10 employees (Source)
Outside Investors: Bessemer Venture Partners led an investment round of $3 million at the end of 2010.
Competitors: As an online investment advisor, Betterment competes with Personal Capital and Wealthfront.
I have to admit: investing in peer to peer loans didn’t initially appeal to me.
I thought it would be hard to assess the risk in lending to individuals — after all, that’s what banks get paid the big bucks for, right?
But 5 years after Lending Club first launched its website, the firm has pioneered a whole industry, not just to say a new asset class. There have been over $1B in p2p loans underwritten and investors like me are now using p2p loans as a core holding in the fixed income part of their portfolios.
Founder Renaud Laplanche joins me on Tradestreaming Radio to talk about how the p2p loan industry cures some major inefficiencies in the market for capital, does a better job sizing up and personalizing risk, and how his firm and industry might just eat the banking system’s future lunch.
Listen to the FULL episode
In investing, earnings drive stock prices. The thing is, though, for many higher growth firms, it’s really hard to determine just how likely a firm is to hit its stated targets.
An earnings miss — or even a hint of one – can be disastrous to share prices.
So, investors spend a lot of time listening to this analyst and that pundit explain his expectations for earnings.
The truth is, very few of these guys get it right.
A better way to get earnings estimates: crowdsource ’em
Most of the time we use analyst consensus earnings — an average of all the different Wall Street opinions.
The problem with using an average is that earnings estimates on certain stocks diverge pretty significantly and taking the average isn’t an entirely accurate way of trying to gauge earnings.
There are a couple of ways to do this better/smarter right now.
Continue reading “Dueling investing apps: How to best forecast earnings”
In a world without guaranteed pensions, responsibility for retirement planning falls on investors’ (not-wide-enough) shoulders.
Thankfully, the 401(k) account is a great way to save for retirement by delaying taxes and encouraging company matching programs (yep, that’s free money).
But, while investors have seen the options of what they can invest in improve over the past decade, it’s still somewhat hard to get professional advice for 401(k)s because your typical financial advisor doesn’t get paid for doing so (he can’t custody the assets and therefore, isn’t interested in helping).
So, where do you turn when you want more guidance on your assets in your 401(k)?
That’s where Kivalia comes in.
Continue reading “Review: Get professional advice for your 401k from Kivalia”