Leaving Style Boxes Behind

Recently I was interviewed by Money Magazine on the topic of Exchange Traded Funds (ETFs). I pointed out that ETFs are an excellent investment tool to implement a sector rotation strategy, and that sector rotation was completely different from the Morningstar Style-Box approach to equity selection. Morningstar is perhaps the best-known research firm specializing in…

A New Way to Describe What We Do

I am often surprised at how the investment industry media finds ‘news’ in investment methods that Pinnacle has been employing for years. This weekend’s Wall Street Journal offered a wonderful example. In a Saturday article entitled, “Same Returns, Less Risk,” Ben Levisohn and Joe Light describe a new investment strategy where portfolio managers handle risk…

Managing Different Kinds of Risk

Buy and Hold investors tend to view risk as ‘tame’ rather than wild, and often believe it can’t be managed. In this view, risk (defined as volatility) can be measured by a standard bell curve or normal probability distribution, where unexpected events are highly unlikely. Also, market movements are assumed to be completely random, so…

Our Journal of Financial Planning Study, Translated into English

Readers who visit the Pinnacle Advisory Group website (pagmain.wpengine.com) will note that a paper by Solow, Kitces, and Locatelli, entitled “Improving Risk Adjusted Returns Using Market-Valuation-Based Tactical Asset Allocation Strategies,” was published in the December issue of the Journal of Financial Planning (JFP) – the most distinguished journal in the profession. The paper itself is…

The Real Clowns

I was recently quoted in a Diana Britton article in Registered Rep. magazine entitled, “Is Tactical Investing Wall Street’s Next Clown Act?” As you might guess from the unfortunate title, the writer trots out the familiar and tired arguments for buy and hold investing. In a nutshell, you should buy and hold because: