What's different a year after the wildfires? | SaltWire #novascotia #firefighting #wildfires #newsLONDON - Worried about a hawkish Fed, over-valued stocks, teetering debt piles, volatile currencies, cliffhanger elections or rancorous geopolitics? Relax and don't over-think it.
"Our main contention is not that KISS investing is absolutely optimal and doing anything else is irrational or a bad investment," Loeys and Wise told clients this week. What's more, they reckon the fewer the assets one has in a portfolio, the easier it is to judge risk on them.By way of example, Loeys and Wise examine 24 years of monthly hedge fund returns in excess of what that simple global equity/bond portfolio would have delivered, with weights to give the same return volatility on a rolling basis.
Other arguments include how longer-term"value" investors can struggle for years to beat the market, how"undervalued" stocks get whipped away quickly and how many index-leading stocks can remain overvalued for long periods.Despite a stellar 60-year sojourn for his Berkshire Hathaway vehicle's strategy of picking unfashionable and undervalued stocks, he can't find many left these days.
With total returns on MSCI's all-country world index topping 400% for the past 20 years - a middle ground between the 600% for the S&P 500 and 200% for the euro zone STOXX index - the passive equity ride's been pretty impressive even when you throw in seismic 2008 and 2020 drawdowns.