Active investment management’s weekly magazine for fee-based advisors

Linda Ferentchak

Linda Ferentchak is the president of Financial Communications Associates Inc. Ms. Ferentchak has worked in financial industry communications since 1979 and has an extensive background in investment and money-management philosophies and strategies. She is a member of the Business Marketing Association and holds the APR accreditation from the Public Relations Society of America. Her work has received numerous awards, including the American Marketing Association’s Gold Peak award.

Investors looking for answers

Investors are demanding increased risk management for their investments, representing an increasingly growing market for actively managed strategies. Surveys  of investor attitudes typically fail in one major way: They start with an agenda that often...

The power of investing with the trend

A timeless read on understanding and implementing trend-based active investment management strategies Regardless of how firmly you believe in active management, how long you have been managing investments, or what system you use, Greg Morris’ latest...

Active management reflects market reality

“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” – William Arthur Ward To be a buy-and-hold investor, one must be an optimist, trusting in the market’s upward direction and...

Gaining the peer-to-peer advantage

The 2015 NAAIM annual conference highlighted the importance of collaboration. The investment advisory industry can be a very challenging environment for established advisors, let alone new entrants. By taking an active management approach, financial...

The efficient frontier fails the test of time

Like so many simplistic approaches to the financial markets, the efficient frontier fails to reflect market reality. To understand the investment efficient frontier, it helps to go back to its origin. In 1952, economist Harry Markowitz published an...

Active managers debate: ETFs vs. mutual funds?

ETFs continue to gain popularity with fund managers, investment advisors, and investors—reflecting ever-increasing familiarity and diversication—but they also have their drawbacks. The mutual fund industry is still the 800-pound gorilla of the financial...

Dissing the investor

The dismaying trend of behavioral finance experts and business media of looking down on investors is unwarranted and counterproductive. Popular financial advice all too often can be summed up with the statement that the average person is incompetent...

Swimming with the sharks

15 developers of active investing strategies faced erce competition at the NAAIM 2014 Outlook Conference. Since the formation of the first financial markets, investors have sought to find the edge—the strategy or insight that blunts the pain of market...

Diversification and the active manager

“It is the part of a wise man to keep himself today for tomorrow, and not venture all his eggs in one basket.” – Sancho Panza Don Quixote, by Miguel de Cervantes [1547-1616] Diversification may well be the oldest risk-management strategy in the...

Tracking the herd through sentiment indicators

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” – Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds One of the more fascinating...

Is modern portfolio theory seriously flawed?

According to modern portfolio theory (MPT), investors are risk-averse: They are willing to accept more risk only for potentially higher payoffs, and will accept lower returns for a less volatile investment. It’s an extraordinarily elegant theory that...

Supporting the turtle

Reducing volatility to improve long-term returns. The investment world is all about returns. Is the S&P 500 up or down for the day? What is the top-performing stock or mutual fund this month, this quarter, or this year? How have the top managers...

But does it work?

Does active management work? It’s easy to find arguments against it, whether from John Bogle, of Vanguard fame, or other market observers maintaining that (a) it is impossible to actively manage a portfolio and (b) the best investment approach is to buy...

Creating investment strategies for real people

Each spring for the last 20 years, DALBAR, Inc., has released its Quantitative Analysis of Investor Behavior (QAIB) study, and each year the conclusion is much the same. According to the study, individual investors underperform the market’s return based...

The lure of the bubble

Stock market bubbles and crashes are nothing new. There seems to be something in human nature that predisposes us to them. If bubbles are just another part of the natural cycle, why do we care so much about them? The greatest destroyer of wealth over...

Granddaddy of all market indicators

The 200-day moving average. Active management at its most basic is the attempt to position a portfolio on the right side of the market’s moves to capture a fair share of gains while minimizing portfolio losses. While today’s active management systems...

The different faces of active management

Exploring the varying definitions and strategic approaches. In portfolio management, two basic but disparate theorems hold court. The first is passive, or buy-and-hold, investing. Passive investing maintains that successful investing results from...