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I appreciate the sentiment. Different situations require different approaches. But I’m wondering if, perhaps, we’ve been around “different blocks” over our lifetimes? I’ve always associated increased risk with increased potential reward. Over my 50 years investing (my “block”, so to speak), I’ve witnessed the following:I would be on suicide watch if I was down 4.6% YTD (or for that matter 1% or 2%). and I have definitely been around the block a few times.
I would be on suicide watch if I was down 4.6% YTD (or for that matter 1% or 2%). and I have definitely been around the block a few times. My nest egg is about all I have. No pension and minimal SS benefits of only $1076 monthly of which they deduct $189 for my Part B premium. And now next year they are deducting another $12.40 for something I don’t quite understand. So $874.60 next year is all I will receive. So I have no choice but to live by two rules. - #1 Don’t lose and # 2 Don’t forget Rule #1.Dark humor.
My math shows the S&P off 17.5% since its high in late summer. Not cheap - but “cheaper” than during the most recent euphoria. To me that implies valuations are heading in the “right” direction. I’m most curious when the report was actually penned. Dated December, 2018 - but likely drafted sometime in November before the steepest losses of the current bear market. The 15+% YTD drop as of today (much greater in some segments) might have been enough to mitigate the paper’s bear case.
If I’m reading GMO’s “Executive Summary” correctly, it is suggesting “0” exposure to U.S. equities. I’ve been slanting more towards global equities (and currencies) due to the increasingly unstable and chaotiic U.S. political / governmental structure. Certainly bears consideration.
However, the report makes one wonder: Whatever happened to the diversified portfolio - long hearlded as the safest, steadiest approach to investing? Throwing all your marbles into one basket or another is one way to garner outsized reward - if you happen to get it right. But it also opens the door to huge losses if you’re wrong or decide to exit when the pain becomes greater than you can bear.
How bad are things? Price’s TRRIX, a well diversified conservative balanced fund targeted toward retired individuals and having near 60% exposure to fixed income, was off only 4.6% YTD. Their slightly more aggressive TRRFX - targeted towards those near retirement was off a bit less. For those who have been around the block a few times, these are not staggering losses or something one should lose much sleep over.
That's an excellent point. Approval ratings are always tied to stock/economic performance.. There may be hell to pay when Joe and Jodie 6-pack get their 401k statements at year’s end. There go 3-5% of his stalwart 38%.
More likely, I think, the Syria game is intended as a diversion away from the dismal stock market. While I’m at it - commodities and bonds haven’t exactly shone lately either. The big winners are folks like Fleckenstein (Maybe Dalio?) who have been shorting tech. Not a lot else working. There may be hell to pay when Joe and Jodie 6-pack get their 401k statements at year’s end. There go 3-5% of his stalwart 38.At least it would be a diversion from Russia collusion and Mueller issues for lil Don.
So you too are disagreeing with the cited page. It says that "institutional investors ... buy and sell securities on behalf of their members." Not on their own behalf for their own balance sheets.Commercial banks only fit the category [of institutional investors] when they buy treasuries or other IG bonds for their balance sheet.
A financial institution, such as a bank, pension fund, mutual fund and insurance company, that invests large amounts of money in securities, commodities and foreign exchange markets, on its own behalf or on the behalf of its customers.
Yes it's confusing because (a) this is more a simple rule of thumb than an inviolate requirement and (b) because there's rarely a clean dichotomy between buy side and sell side. From a then (2013) SEC commissioner:Only buy side qualifies as an investor. I know it's confusing.
One way of viewing institutional investors is any entity with enough heft and buying discretion to move markets. That's the view you expressed: "they have the ability to move the markets", and the view echoed in part of the cited article "Due to the size of their holdings, institutions exert the largest impact on the financial markets."Market participants are often described as either “buy-side” or “sell-side”. Buy-side firms, like asset managers, buy financial products and services; while sell-side firms, like broker-dealers and investment banks, create and sell those products and services. When viewed in these simple terms, institutional investors are generally considered to be on the buy-side. However, mutual fund and asset management companies can also act like sell-siders when they market their own pooled-vehicles, whether directly or through broker-dealers.
Institutional Investors as Owners: Who Are They and What Do They Do?There is no simple definition of an “institutional investor”. The closest we get to a common characteristic is that institutional investors are not physical persons. Instead they are organised as legal entities.
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