Quote:
Originally Posted by Irenicus
^Just an amateur's opinion but, aren't you pretty high on the fixed income and cash side? Is the Canadian bond market less wtflol than the US one, not as under the mercy of the US Feds? Or is it your choice and personal risk assessment?
Mind, I understand not committing heavily into US equities at this point, even blue chip ones, and if you are bearish on Europe/Asia I can see you'll have problems finding alternative asset classes. The S&P is at such a high that, while the US economy has sound fundamentals -- in the short term, and barring another political murder-suicide attempt -- it is not going to grow nearly as fast as the S&P and that means bubble. Bubble bad.
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1) I am very much overweight fixed income now. It's performed very well for me over the last 2.5 years but it is definitely a drag on performance currently. My strategy at the time was admittedly an asset allocation one.
2) My view on "alternative investments" and the like might be very different than other peoples.
For example, I work with colleagues who have connections to individuals that may require 2nd mortgages on their family home at 65-80% LTVs but are willing to pay >10% rates on that debt. They may need that money to renovate another home, put it into their business or other opportunities. Sometimes there's other things like multi-unit residential where they are levering the same amounts off base value but putting all the additional into renovations. We do our diligence, review the opportunity and put money into that.
At other times .. I sometimes develop short-medium term personal trading strategies (ie. bull-call spreads, bear-put spreads, bear put-forward spreads multi-leg short delta/theta). My most recent one was the aforementioned option strategy crafted to cover a large chunk of a stock's "downside" portion of it's cumulative probability distribution. I put money into that too (and have also lost money at times too).
Or sometimes I just do selective individual high variability stocks bets. These are probably my least quantitative investments and are based on "I think this segment, this company or this industry" is in for gains or a correction. Personal employee stock loan bets.. etc. I classify all of these things as "alternative" ..
Near-term, I view economic fundamentals in the U.S. are more positive, but my longer-term view is that the country is still in for a significant shock as grow will be much slower due to continuing consumer deleveraging. That's my thesis anyway.