Jeff Benjamin

Investment Insights: The Blogblog

Jeff Benjamin breaks down the game for advisers and clients.

Jul 11, 2016

The safe-haven utilities sector has become extremely overextended

By Jeff Benjamin

There is something amiss when safe-haven investments move into bubble territory. The utilities sector is up 21% so far this year. The category is being described as extremely overextended and valuations look dangerously high. Seems like we've heard this story before. At least one trader says gold has unlimited upside. Up 28% this year to a two-year high. There are ways to advise clients through turbulent times. Focusing on the outcomes. The case for paying two months' worth of rent for a piece of art. Instagram is changing the art-buying game. ... Read full post

Jul 8, 2016

Moore Capital tells hedge fund manager to pound sand after raucous Hamptons party

By Jeff Benjamin

Moore Capital Management has sent hedge fund manager Brett Barna packing following a raucous Fourth of July party at a $20 million rented mansion in the Hamptons. The saga involves a $27,000 Airbnb rental, a $1 million lawsuit, and “dwarfs with Champagne guns,” whatever that means. Why the heck is utilities such a hot sector? We're in neutral territory. The safe-haven play gains momentum as more investors pile into gold. Global gold holdings top 2,000 metric tons. In the spirit of summer, here are some tips for grilling portfolio managers. And by grilling, we mean due diligence, not actually cooking them on a grill. That would be wrong. Looking at the investment process. ... Read full post

Jul 7, 2016

DoubleLine's Jeffrey Gundlach says gold is the place to be

By Jeff Benjamin

DoubleLine's Jeffrey Gundlach is embracing the safe haven of gold. “Things are shaky and feeling dangerous.” Seven years into an economic “recovery,” the U.S. economy is more fragile than it was during the financial crisis. Wonderful. Nobody should be surprised that the Fed can't raise interest rates. For being so young and adventurous, millennials sure are cautious when it comes to investing. Many say they can't afford to invest in stocks. This is probably not the case for anybody who regularly reads InvestmentNews, but you might know somebody who is guilty of misusing some of these common financial terms.The difference between fee-based and commission-based. ... Read full post

Jul 6, 2016

Morningstar brings smart beta into the active-passive debate

By Jeff Benjamin

Morningstar has just reshuffled the deck in the active-versus-passive debate. The passive-active duo becomes the passive/strategic beta/active trio. The expanded framework folds in strategic beta. With the stock and bond markets showing an unusual level of disconnect to kick off the summer, the case for just sitting in cash is starting to make more sense. Heading into fall with a 20% cash cushion. Millionaires under age 40 are more likely to hold cash, and they aren't afraid of alternative investments. Can we learn something from these folks? They spread their bets around. Summer is in full swing, and to help offset the impact of all the fun you're having, there are some healthy eating habits that will help keep you in the game. From arugula to zucchini. ... Read full post

Jul 5, 2016

Bond market is signaling it's time to sell stocks

By Jeff Benjamin

The direction of bond yields does not bode well for the equity markets. This looks like a dangerous disconnect. All the reasons you need to stay bullish on the U.S. economy. Home to the world's top brands. Making the case for not abandoning bonds. Learn from past mistakes. Being irrational about money is being human. Tossing away the advantages of low-cost products by trading rapidly. ... Read full post

Jul 1, 2016

A hedge fund manager's view of liquid alternative funds

By Jeff Benjamin

Liquid alternative strategies are growing up, and that means some growing pains. There's asset allocation and there's chasing returns. It's finally good to be an investor in commodities. A turnaround for the asset class. With history as a guide, the S&P 500 looks poised for a bullish run. A rare signal. Did U.S. bank execs jump the gun on Brexit? Missing the “leave” mark. ... Read full post

Jun 30, 2016

The markets brace for Puerto Rico's default

By Jeff Benjamin

The markets are bracing for the next shoe to drop in the form of a default by Puerto Rico. The plan to default on $1 billion worth of general obligation bonds. With GE Capital now off the list of financial institutions the government considers too big to fail, the complete list is still pretty lengthy. From American International Group to Zions. Even with the S&P 500 hovering near all-time highs, there are still some stocks that are poised for big run-ups from here. Beaten-down stocks with big upside potential. The numbers on the 4th of July holiday. In 2014, thirsty patriots bought 22.8 million cases of beer. ... Read full post

Jun 29, 2016

Unlike other active funds, First Eagle's fund champions its passion for cash

By Jeff Benjamin

Financial advisers are often critical of mutual funds with large cash positions, based on the argument that investors don't want to pay an active-management fee for idle cash.The flipside, however, is that in times of sudden market pullbacks those cash-heavy portfolios are best positioned to weather the storm, either by having enough cash to meet redemptions, having ready cash to buy into the market dip, or just letting the cash hedge the downside exposure of stocks in the portfolio.The case for cash is always easier to make when markets turn volatile, as they did with a vengeance following last week's vote in the United Kingdom to leave the European Union. “Typically, people tend to think of cash on a fund's books as a negative, but in times of volatility it gives those portfolio managers a potential leg up,” said Todd Rosenbluth, director of mutual fund and ETF research at S&P Capital IQ.“Those managers with a lot... Read full post

Jun 29, 2016

Stocks rebound from the Brexit vote in a show of resilience that should be alarming

By Jeff Benjamin

What does it say about the U.S. equity markets when stocks react so violently to a Brexit vote that had a 50/50 chance of happening, and then just puff right back up again three trading days later? No offense to dead cats, but this is not a dead-cat bounce. The steep drop in corporate profits has economic forecasters freaking out. “There have been only two prior episodes of profits falling that much with no economic recession, in 1986 and 1951.” Why are there so few women in fund management? At the 20 largest U.S. asset managers, only 11% of portfolio managers are female. The Brexit dust may be starting to settle but the issue will be with us for at least a couple of years. Here are some things worth understanding about the U.K.'s big decision to ditch the EU. What is all this Brexit business about? ... Read full post

Jun 28, 2016

Brexit forces a dovish Fed into cowering mode

By Jeff Benjamin

A Fed rate hike this summer? No, no. You've got it all wrong. The Fed is now sheepishly tilting toward a rate cut. The July outlook is now for 0.25% cut. The big bets being made to hedge the Brexit and bank on the looming fallout. The potential for bad things to happen from here. This is where that pesky Brexit will hit retirement savers. Don't let your clients act on impulse. Making the case for voting to exit the EU. Sometimes the truth hurts. Shouting 'fire' because the house is ablaze. Just because you happen to reside in big, noisy, smelly city doesn't mean you have to give up the peace and tranquility of a picnic. Hidden picnic spots in seven big cities. ... Read full post

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