Thu, Oct 8, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Diversification research introduces new explosive index

Tuesday, June 19, 2012

Beverly Chandler, Opalesque London: New research from Ineichen Research and Management AG examines diversity and introduces the Financial Explosivity Index. In a lengthy report entitled Diversification? What diversification?, Alexander Ineichen quotes everyone from Einstein to Oscar Wilde to Woody Allen and finds that the idea of diversification is very old and is essential to survival of wealth, life, and everything.

Diversification in terms of investment is a useful selling point, Ineichen says. "The institutional pioneers invested in the 1990s; early adaptors around 2000-2002; and then the institutionalisation of the hedge fund industry took off. The institutionalisation of hedge funds took place during a time where nearly any diversified portfolio of hedge funds had outperformed equities or a 60/40 equity/bond mix on a rolling five year basis. The main selling points were "absolute returns," or "alpha," or the hedge-funds-can-make-money-in-all-market-conditions argument. Diversification was an important additional selling point; it always is. Whether it is emerging market bonds, CDOs, wind parks, etc. the diversification argument is most certainly to enter the sales pitch".

Ineichen writes that the "buy low and sell high" adage is arguably overused and easily ridiculed. "The "buy low and sell high" adage is essentially the colloquial five word summary of value investing" ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. U.S. hedge funds prepare for worst finish this year since 2008[more]

    Komfie Manalo, Opalesque Asia: U.S.-focused hedge funds are preparing for their worst year since the 2008 global financial crisis, following a series of letdown including the market sell-off in August and the sell-off in healthcare and biotechnology sectors last month, reported

  2. Investing - AQR Capital and Renaissance Technologies raise stakes in Southwest Airlines[more]

    From In the previous part of this series, we saw how institutional investors played Southwest Airlines (LUV) in 2Q15. Now let’s move on to the trades executed by key hedge funds in Southwest Airlines over the same period. … Most of the hedge funds that had significant exposu

  3. Manager Profile - Pimco alternative funds flourish as 30-year bond rally fades[more]

    From Inside Pacific Investment Management Co., the bond behemoth that lost two chief investment officers last year and saw almost $500 billion of client money leave, a hidden profit engine is easing some of the pain. For more than a decade, Newport Beach, California-based Pimco has qu

  4. Niche Investing - Art investment funds: Attracting institutional and other new investors[more]

    From The Deloitte/ArtTactic Art and Finance Report 2014 (the "Art and Finance Report") noted that the "global art investment fund market was estimated to be worth at least $1.26 billion in the first half of 2014." This seems almost inconsequential when juxtaposed with the $54 billion of

  5. DoubleLine’s Jeffrey Gundlach warns of another round of market shakedown[more]

    Komfie Manalo, Opalesque Asia: DoubleLine Capital co-founder Jeffrey Gundlach is painting a bleak future as he warned that the U.S. equity market and other risk markets, such as high-yield "junk" bonds, are facing another round of selling pressure. Gundlach said in an interview with