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These Four Simple Principles Can Put Investors On The Path To Success (Vanguard)
Investors are worried about the impact that a Federal Reserve tapering of its $US85 billion monthly asset purchase program and rising rates could have on their portfolio. Many are tempted to time markets. Instead, Vanguard Chief Investment Officer Tim Buckley, says he always reminds his clients of four core principles that put clients on the path to investment success.
“I always come back to our four principles, which have served investors well regardless of the environment: Know your goals, set your portfolio allocation according to your goals, minimize cost, and have the discipline to rebalance.” He says investors that haven’t rebalanced their portfolio in the past six months or year should take another look at their portfolio. He also says investors should be “wary of strategies that are based on back-tested data with an expectation of outperforming the market in the future.”
Hedge Fund Holdings Surge Even As They Underperform The Stock Market (Financial Times)
Even has hedge funds have underperformed equity markets in 2013, the continue to draw investors. Hedge funds have pulled in $US360 billion this year, a 15.7% increase on their assets under management (AUM) at the end of 2012, reports Stephen Foley at The Financial Times. This is largely because investor expectations are changing. Investors no longer expect massive returns and are instead looking to diversify their portfolio with smaller and more stable returns, reports Foley. And this has hedge funds optimistic going into 2014. 25% expect to launch a new funds, according to a Prequin survey of fund managers cited by Foley.
Jim Rogers: Right Now, I’d Rather Buy Silver Than Gold (BullionVault)
Gold prices have been falling and Jim Rogers, chairman of Rogers Holdings, told BullionVault, that this was because India “which has been the largest buyer, has reduced its buying a lot.” Rogers added that if Indian politicians could get people to sell their gold, “Who knows how low gold could go?” Rogers said right now he isn’t buying silver or gold but if he had to buy one today, it would be silver because it has fallen more than gold. But he added that “With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction.”
It was earlier report that Fidelity, the world’s largest RIA provider, was letting its clients invest in Bitcoin through SecondMarket’s Bitcoin Investment Trust. “At this time, Fidelity does not allow investments in the Bitcoin Investment Trust through our retail platform, including in IRAs,” a Fidelity spokesman told Business Insider in an email. Accredited investors did have access at one point, but don’t anymore.
“The Bitcoin Investment Trust was previously approved by Fidelity as an eligible investment for accredited clients in their self-directed IRA accounts and investments began closing last week,” SecondMarket’s Barry Silbert said in a statement. “We understand that Fidelity has decided to reevaluate this decision.”
The latest Investors Intelligence poll has “hit an extreme” writes Gluskin Sheff’s David Rosenberg. And this acts as a contrary indicator. The bull share has climbed to 58.2% in the latest week, up from 57.1%, while the bear camp is at 14.3%. The correction camp is down to 27.5%, from 28.6%. “As such the bull/bear spread widened to a new high for the year (43.9 percentage points versus 42.8 last week) as bullish sentiment went to a new high for the year.”
“This index is at an extreme high and one that has more often that not, regardless of the macro or policy backdrop — ushered in a corrective phase, something we have not seen now in well over two years, which itself is highly unusual. The market is so strong that it could undergo a near-term 10% setback and none of the bullish technical deadlines would be violated.”
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