As fearful investors have settled for lower yields to reduce risk in recent months, they've poured more than $293 billion into bond funds in teh 12-month period preceding September of 2019. However, in their flight from stocks, many investors are overlooking a practical alternative to bonds that typically pays higher yields: preferred stocks.
Sheaff Brock Chief Investment Officer Dave Gilreath explains the potential advantages of preferreds—better yields and reduction of risk from both common stock and bond holdings. Read more here.
Abundant data suggest that a recession isn’t just around the corner, but expectations of near-term economic and market doom have many individual investors fearful for the fate of their portfolios.
Managing clients in this state is a difficult advisory challenge. But what if you could adjust client portfolios in a way that might assuage their fears, provide some protection in a slowing market, and still position them well if the bull continues? Sheaff Brock Managing Director Dave Gilreath shares potential opportunities in a recent article for Financial Advisor magazine.
An established investment advisory firm, Sheaff Brock manages the wealth of high-net-worth individuals using a “core and satellite” investment approach.
The core and satellite strategy combines active and passive investing. The core involves investing passively in asset classes that follow indexes with the aim of replicating overall market returns, while the satellite aspect involves actively investing a percentage of managed assets with the goal of outperforming the market.
Many investors often wonder which is the better approach to investing, passive or active. Passive investing focuses on the long term. Investors buy into an index fund that tracks a major index such as the S & P 500. These funds deliver returns that mirror the overall index performance.
Active investing is quite different. Investors focus on shorter-term trades with the goal of achieving higher-than-market returns. It involves much deeper analysis into qualitative and quantitative data to take advantage of trends, irregularities, and anomalies in the markets.
Through the core and satellite strategy, investors can enjoy the best of both investment approaches.
Independent investment management firm Sheaff Brock utilizes an approach to money management that challenges traditional presumptions about investing. Beyond its everyday operations, the company provides support to the Susan G. Komen Foundation; best known for its annual "Race for the Cure." The Susan G. Komen chapter in Central Indiana, where Sheaff Brock’s is headquartered, administers the Sisters in Pink program for African-American women.
Sisters in Pink addresses a startling statistic that although African-American women are less likely to develop breast cancer, the risk of death increases by 40 percent for those diagnosed with it. A peer-to-peer education program, Sisters in Pink teaches women about breast health and breast cancer, in addition to providing accessing to life-saving screening and diagnostic services. The program is open to African-American women throughout Marion County.
Members of the Marion County community who feel passionate about breast cancer can join the program’s team in delivering educational sessions. Educators will receive training on breast cancer information and how to host good educational sessions prior to hosting their first session. Furthermore, they will receive monthly stipends depending on the number of completed sessions. Sister in Pink sessions will begin in late summer 2017.
From its headquarters in Indianapolis, Sheaff Brock provides portfolio management services in line with its clients' risk tolerance and financial objectives. Focusing primarily on high net worth individuals, the firm combines no-load mutual funds with exchange-traded funds (ETFs) to allocate assets. Beyond its work, Sheaff Brock supports several local organizations, including the nonprofit Susan G. Komen.
In addition to its Race for the Cure event, Susan G. Komen operates the 3-Day, a 60-mile walking event that takes place over the course of three days. Participants have the opportunity to camp together for two nights as part of the 3-Day community and receive full support from a roadside crew that ensures all walkers stay safe during the event. Each walker raises $2,300 for the organization upon completion of the 60 miles.
Since its inception in 2003, the 3-Day has raised over $820 million due to the dedication of more than 500,000 walkers. This money has funded over 2,500 research projects and more than 460 clinical trials, all with the aim of putting an end to breast cancer.
Sheaff Brock is a registered investment advisory firm located in Indianapolis, Indiana. While offering a variety of traditional investment portfolio options, Sheaff Brock also offers alternative portfolios.
While the major US equity markets continued their strong performance into the first quarter of 2017, there are indications that alternative investment asset classes are growing in popularity. In fact, according to Preqin’s Investor Outlook: Alternative Assets, H1 2017, the hedge funds and the private capital market are the largest they have ever been at a combined $7.7 trillion assets under management.
Investment in alternative assets grew by more than $300 billion in 2016, with Preqin attributing this to further diversification by existing investors rather than new inflows of capital. In the Investor Outlook, Preqin outlined six alternative investment classes and listed the proportion of institutional investor involvement in each one:
1. Real Estate - 61 percent of institutional investors have a portion of their portfolio invested in real estate
2. Private Equity - 57 percent
3. Hedge Funds - 51 percent
4. Natural Resources - 40 percent
5. Private Debt - 37 percent
6. Infrastructure - 36 percent