Diversification Archives - Page 2 of 6 - Acropolis Investment Management

10 Jul 2023

Lessons from the Land of the Rising Sun

When I was in high school, Japan Inc. seemed invincible. Their economy was booming, which pushed up their real estate and stock markets, and a handful of over-the-top events like the purchase of Rockefeller Plaza by Japanese investors and the sale of Van Gogh’s Portrait of Doctor Cachet sold for $82.5 million (or $189.5 million in today’s dollars). From 1970-1989, the Japanese stock market, according to MSCI, gained 16.9 percent… Read More

By David Ott Tags: Diversification, Economy, International Investing, Markets, Recession, Stocks, Volatility, Wall Street

22 May 2023

Debt Ceiling Crisis in Perspective

Chris and Cliff forwarded me an article last week asking: what would you do with your portfolio if you knew what was coming? The article referenced the still unresolved debt-ceiling situation and proceeded to list many pretty lousy events over the past 30 or so years. It made me think of a chart we made when we started Acropolis with small images depicting awful news with the growth of a… Read More

By David Ott Tags: Bonds, Debt Ceiling, Diversification, Economy, International Investing, Investing, Markets, Stocks, Wall Street

1 May 2023

How to Avoid Disaster

September will mark the 25th anniversary of the failure of the massive hedge fund, Long-Term Capital Management (LTCM), and my podcast feed is filling up with retrospectives. One podcast featured Roger Lowenstein, the author of When Genius Failed, which is considered the definitive work on the subject. I read it when it came out in 2000 and once again in subsequent years, and it’s a great book that I thoroughly enjoyed…. Read More

By David Ott Tags: Credit Risk, Diversification, Economy, Investing, Markets, Portfolio Strategy, Stocks, Volatility, Wall Street

17 Apr 2023

The March Towards Exchange-Traded Funds

Acropolis was an early adopter of exchange-traded funds (ETFs). As the name implies, an ETF is a fund that trades on an exchange. It’s like a mutual fund in that it is generally diversified, but like a stock, it trades throughout the day. When we got going in 2002, ETFs were about ten years old. The first version was State Streets Spyder, which still trades today with the ticker SPY…. Read More

By David Ott Tags: Diversification, Economy, ETFs, Mutual Funds, Portfolio Strategy, Wall Street

12 Dec 2022

Let Private Investments Stay Secret

Over the past five years, the hottest investments have all had the word ‘private’ in front of them: private equity, private credit, and private real estate. Private investments, or ‘privates’ as they are colloquially known, buy whole companies or properties or make direct loans to companies. When they buy companies or properties, the private fund managers can change management, business strategy, capital structure, or anything else that will allow them… Read More

By David Ott Tags: Alternative Investments, Diversification, Investing, Markets, Private Equity, Wall Street

21 Mar 2022

Visualizing Market Losses Today

I’ve been accused of repeating myself, and, in truth, it’s a fair accusation. Today I want to show a chart that I’ve shown before. Instead of showing the total growth of the stock market over time, where the good drowns out the bad, I want to highlight the bad. I don’t want to scare anyone; I actually think it’s reassuring. The measure I’m showing is called a drawdown, which shows… Read More

By David Ott Tags: Diversification, Economy, Markets, Portfolio Strategy, Risk, Stocks, Volatility, Wall Street

7 Feb 2022

The S&P 500: An Increasingly Concentrated Bet

Over the weekend, I was looking at some research from JP Morgan that showed the percentage weight of the top ten stocks in the S&P 500 over time, and I admit that I was surprised. When we started Acropolis, 20-years ago in August, the top ten stocks made up about 24 percent of the index. I thought that was pretty high back then and was one of the reasons that… Read More

By David Ott Tags: Diversification, Economy, Investing, Markets, Portfolio Strategy, Volatility

24 Jan 2022

Big Bets Prove Costly

The stock market is suffering a setback, mostly due to the change in tone from the Federal Reserve. That isn’t the whole story, in my opinion, however, because I don’t think it fully explains why the worst returns have been in the hottest part of the market, as I outlined last week. Although I don’t have any particular evidence, I think that the selloff is related to deleveraging by hyper-aggressive… Read More

By David Ott Tags: Diversification, Economy, Markets, Volatility, Wall Street

25 Oct 2021

I Finally Bought Bitcoin

Several years ago, I went to the movies and noticed a machine selling Bitcoin in the lobby. I’d read about Bitcoin and thought about buying one just to keep an eye on it. Then, I thought that $3,500 was an expensive night at the movies and just enjoyed the show. A year later, I went back, and the price had risen to $16,500 per coin, and I realized that night… Read More

By David Ott Tags: Bitcoin, Crypto, Diversification, Investing, Markets, Risk, Wall Street

11 Oct 2021

Before You Invest in Alternatives

Over the past few years, one of the more popular categories of mutual funds has been so-called ‘alternative’ funds. Alternative investments, broadly defined, are strategies that seek returns that are uncorrelated from traditional investments like stocks and bonds. While alternative investments were once largely confined to private partnerships, they are now popular in mutual funds, or what the industry refers to as ’40 Act Funds. Following the 2008 financial crisis, alternative mutual funds… Read More

By David Ott Tags: Alternative Investments, Diversification, Economy, Investing, Markets, Volatility

Insights

Our Knowledge, Straight to Your Inbox