Practical analysis for investment professionals

Joachim Klement, CFA

16 Posts

Biography

Joachim Klement, CFA, is a trustee of the CFA Institute Research Foundation. Previously, he was CIO at Wellershoff & Partners Ltd., and before that, head of the UBS Wealth Management Strategic Research team and head of equity strategy for UBS Wealth Management. Klement studied mathematics and physics at the Swiss Federal Institute of Technology (ETH), Zurich, Switzerland and Madrid, Spain, and graduated with a master’s degree in mathematics. In addition, he holds a master’s degree in economics and finance.

Author's Posts
Corporate Taxes Matter, But Not in the Way You Think

The common assumption is that lower tax rates should increase corporate profits, share prices, investment, and consumption, and thus lift the entire economy. Unfortunately, this is not quite how it happens in the real world.

Politics Matters — Sometimes

Investors need to become experts in the rapid assessment of geopolitical events to be successful in the coming years.

Dumb Alpha: Dr. Quantlove or: How I Learned to Stop Worrying and Love the Stop Loss

Stop losses may not enhance returns, says Joachim Klement, CFA, but they enhance client well-being, and in the end, they may keep a client from selling what is otherwise a great long-term investment.

Dumb Alpha: Tactical Errors

If investors want to engage in tactical asset allocation, what would be the Dumb Alpha method of doing so? Joachim Klement, CFA, provides his advice.

Dumb Alpha: Do the Right Thing

One of the symptoms of middle age is that you start to give advice to younger people on what your experience has taught you about life. So Joachim Klement, CFA, puts his imaginary pipe into his mouth, adjusts his glasses, and explains why keeping it simple might be the most important "dumb alpha" lesson he has learned in his investing career.

Dumb Alpha: Don’t Just Do Something, Sit There!

Instead of being motivated by the rule “Don’t just sit there, do something,” investors might instead act based on the rule “Don’t just do something, sit there,” says Joachim Klement, CFA, in the latest edition of his Dumb Alpha series.

Dumb Alpha: Getting Rich Slowly

Instead of creating complex multilinear factor regressions, investors can outperform the market simply by selecting the stocks with the smoothest return profile — good, old, boring stocks that show no drama and a lot of stability, writes Joachim Klement, CFA.

Dumb Alpha: Trailing or Forward Earnings?

In the spirit of dumb alpha, we can say that simple trailing P/E ratios are far better value indicators than forward P/E ratios. Or as I tell my colleagues at work: Never ever use forward P/E ratios. Ever.

The Vagaries of Using CAPE to Forecast Returns

Historically the CAPE ratio has worked well in predicting the future real returns of stock markets. But recently the earnings side of the CAPE ratio has come under increased scrutiny.

Dumb Alpha: How to Build an Above Average Hedge Fund

Joachim Klement, CFA, demonstrates a method for beating average hedge fund returns — without the fees. It's the best dumb alpha can offer: a simple, low-cost investment strategy that outperforms more sophisticated and expensive alternatives.



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