David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management
Global equity markets, buoyed in large measure by expectations of continued central bank accommodation, have continued their advance in the second half of 2012, with markets in Japan and the most financially stressed eurozone countries notable exceptions. Economic news, however, remains lackluster, prompting caution among risk-averse investors.
In a poll conducted earlier this week, CFA Institute asked its members if tighter regulation of high-frequency trading would meaningfully reduce technical glitches in the stock market. Not surprisingly, nearly two-thirds of respondents thought that tighter regulations would indeed be effective.
Manchester United, the acclaimed soccer club of the English Premier League, is planning to sell shares to the public in an offering to be priced August 9, 2012. While its iconic brand and loyal following are probably unsurpassed in professional sports, the valuation attached to Manchester United's shares and the risk factors associated with ownership make this an investment to avoid, unless you are just looking for bragging rights at your local pub.
Today’s historically low interest rates and investors’ flight to safety have combined to raise interest in dividend-paying stocks. And while studies of the efficacy of dividend-investing strategies have been mixed, dividend investing remains a popular strategy. As such, it only seems appropriate to revisit an investing classic that first provided investors with a theoretical framework for determining the intrinsic value of stocks based on their dividends: John Burr Williams’s The Theory of Investment Value.
Sebastian Mallaby makes the case that hedge funds are important providers of liquidity to financial markets and not a destabilizing threat to the financial system.
At a recent conference, investment professionals from Fidelity Investments, Goldman Sachs, and the State of Wisconsin Investment Board shared their frameworks for decision making and presented competing visions for how the next 12 months are likely to unfold. They also hinted at how they would position portfolios for optimal advantage.
Can a better understanding of behavioral finance, that is, behavioral intelligence, translate into improved investment returns? Opinion may be divided, but research suggests that it can.
Investors who bought shares in the recent public offering should have first consulted the authors of Security Analysis, who wrote that the intrinsic value of a security is “that value which is justified by the facts . . . as distinct, let us say, from market quotations established by artificial manipulation or distorted by psychological excesses.”
A detailed review of 13F filings for the first quarter of 2012 reveal that, as a group, portfolio managers moved out of energy, utilities and consumer staples stocks and beefed up their holdings of technology, financial, and consumer discretionary stocks.
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