Blending Strategies to Reduce Volatility and Boost Results

No single investment strategy ensures success and, as we have emphasized time and again, zig-zagging from one to another is a futile (and often costly) exercise. In a recent article for Nasdaq, Validea CEO John Reese explains how combining different investment methodologies can reduce overall volatility in a portfolio and lead to improved long-term results. Since inception (in 2003), Validea’s Momentum Investor portfolio has returned 192.2% and our Value Investor portfolio has returned 238.3% (outperforming… Read More

Bargain Shopping in Europe

When considering shopping for “cheap” stocks that have emerged post-Brexit, keep in mind that this group of stocks has offered bargains for quite some time. In a recent article for Forbes, John Reese, CEO of Validea, explains that while investing overseas may seem smart due to the current political and economic turmoil, investors may be better served by focusing on company-specific financials and fundamentals. Here are five European stocks that get high marks according to… Read More

Greenblatt’s Magic + 5 Value Stocks that Make the Cut

Hedge fund manager Joel Greenblatt, author of The Little Book that Beats the Market, uses what he calls a “magic formula” to earn returns that outperform the market. In a recent article for TheStreet.com, John Reese, CEO of Validea, explains Greenblatt’s strategy of focusing on return-on-capital and earnings yield to find “good companies at bargain prices.” But this straightforward, seemingly simple strategy is no magic bullet. It is based on a long-term view (3 to… Read More

Making the Most of Market Anomalies

David Larrabee, Director of Member and Corporate Products at CFA Institute, gave investors an insider’s thought from the 69th CFA Institute Annual Conference in his latest article. Empirical data suggests that there are a number of opportunities for disciplined investors to take advantage of market anomalies in a “meaningful and profitable manner”. Larrabee reminds investors of the macroeconomic picture by discussing chief strategist at BCA Research Peter Berlin’s key advice of what to do in… Read More

David Wallack on Attractive Value Stocks

Value stocks seem to be staging a comeback, but many are still trading at 30%-40% below their highs, and a significant opportunity may still exist. At least that’s the view outlined in a recent Barron’s interview with fund manager David Wallack of T.Rowe Price Mid-Cap Value Fund. “We’re finding more places to put money to work in the last five to six months than in the previous five to six years,” Wallack contended. Wallack said… Read More

Follow Buffett’s Lead and Focus on Value + Quality

Investors might be surprised to know that Warren Buffett, perhaps the greatest investor of all time, is a big fan of indexing. For instance, “He has already declared that 90 percent of the money he leaves to his wife will be invested in Vanguard’s S&P 500 index fund.” But as Nir Kaissar, a Bloomberg Gadfly columnist points out, investors can glean insight into Buffett’s high quality and value portfolio at Berkshire. For example, the chart… Read More

Is The Growth/Value Pendulum Swinging?

After a lengthy period of underperformance, value stocks have started to rebound. And in a recent piece for Proactive Advisor, Validea CEO John P. Reese says they are now poised to outperform their pricier growth stock counterparts. Reese talks about some of the reasons value stocks have struggled over the past decade, saying that investors have been incredibly risk-averse in the aftermath of the financial crisis and Great Recession and thus very hesitant to buy… Read More

Murky Outlook Suggests Selecting Value Stocks Says Dreman

David Dreman of Dreman Value Management says, “the outlook for the market couldn’t be murkier” in a Forbes column. He notes that corporate revenues and profits for the S&P 500 are slightly down from 2014 to 2015, but that the P/E ratio for the S&P 500 is above its long-term average. Overall, he predicts “that 2016 will be a year without significant movement up or down.” Further, he recommends value stocks, particularly in cyclical, energy… Read More

Blending Growth and Value Type Strategies Could be Best

Investment firm Gerstein Fisher suggests that “blending Growth and Value [approaches to investment] even in a simple 50/50 split generally offers more stable returns than either a 100% Growth or 100% Value portfolio.” They note that value has clearly outperformed over a 90-year time-horizon and that growth has provided significantly better returns over the last 9 years, while also drawing on behavioral finance literature to remind readers that “investor attempts to time markets and cycles… Read More

Positioning for 2016

  Patrick O’Shaughnessy of O’Shaughnessy Asset Management says “if you look historically at what broad categories do well during period of rising rates . . . value stocks tend to do well.”  He notes that “this year has been the opposite story,” but with Fed rate increases widely anticipated, O’Shaughnessy says, “we would recommend that people re-position towards value stocks.” Andrew Slimmon of Morgan Stanely Investment Management says he anticipates stocks will do “modestly better”… Read More