Investing

Fund Ratings Might be Misleading You

 |  Monday, 08 February 2016 06:26  |  Published in Investing
Fund Ratings Might be Misleading You
(New York) The Wall Street Journal has published an insightful article about risk tolerances and mutual fund ratings. Most will be familiar with the popular mutual fund ratings from companies like Morningstar and S&P Capital IQ, however, this article discusses their weaknesses. The piece, written by an academic at UCLA, explains that one flaw of the ratings is that they assume all investors have the same mentality about risk. The article discusses how losses are much more painful for some than others, calling this a “loss-aversion coefficient”, and saying that this should be accounted for in investor decision-making. As such,…

Two Big Investment Ideas for 2016

 |  Friday, 11 December 2015 10:14  |  Published in Investing
Two Big Investment Ideas for 2016
(New York) Barron’s has published a piece covering two investment ideas for 2016. The first idea is a variation of the old “Dogs of the Dow” approach, where one would by the ten highest yielding stocks on the Dow. This variation includes buying the ten highest and ten lowest-yielding stocks, to create a mixed basket of winners and losers. The strategy is predicated on two things: mean reversion, where cheaper stocks will eventually improve, and momentum, where hot stocks will keep on moving higher. While relying on these two principles simultaneously seems a conundrum, the strategy has a favorable history,…
Headspinning Startup Valuations May Be Starting to Crash
(San Francisco) As anyone who follows financial news will now, over the last few years startup valuations have only gone in one direction—straight up. However, that trend may be starting to shift as sentiment begins to sour. In what could prove a turning point, Fidelity has just recently devalued its holding of Snapchat, a major “unicorn”, by 25%. Dropbox, another multi-billion Dollar high profile startup, also had its valuation cut by BlackRock earlier this year. Additionally, Square, the payments company may be set to IPO at a significantly lower price than its last private funding round. The piece says that…

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