The realities of diversification

Most investors purchase insurance for their homes, vehicles and health, but rarely expand the practice to their investment portfolios. At RBA, we diversify our portfolios using negatively correlated asset classes, but just like insurance, it comes with a premium.

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Looking for risk in all the wrong places

Investors seem overly concerned about equity market volatility, but ignore the growing risks in fixed-income and seem oblivious to the bonds’ already multi-year underperformance. One might say they are looking for risk in all the wrong places.

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Charts for the beach - 2018

Don’t leave home without your summer essentials: sunglasses, sunscreen, towel and RBA’s Charts for the beach.

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Overheating Ahead

Investors appear to remain oblivious to how high inflation already is in the US relative to inflation rates around the world. With Washington DC policy overtly pro-inflation, investors need to be positioned for the overheating ahead.

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Ignore the Tweet, Invest for the Meat

Investing based on short term-market gyrations and noise from the 24/7 business news cycle rarely drives alpha. At RBA, we’d rather invest dispassionately based on market fundamentals and focus on longer time horizons.  Remember to ignore the Tweet and invest for the meat.  

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Unicorns exist only when money is free

When the Fed instituted ZIRP, investors were overenthusiastic to invest in the next great Unicorn. Now that rates are rising and money is no longer free, investors are beginning to realize that rational investing and positive cash flows trump hype and speculation.

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Cryptocurrencies: It's just Candy Crush

If the only difference between playing for digital coins in mobile games and mining for cryptocurrencies is the ability to openly trade the coins for goods and services, one should wonder if the crypto frenzy is worth the hype and speculation. We think not.

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Income + Tariffs + Inflation = Underperformance

Many income-oriented investors may not be appropriately positioned for the current market environment, with increasing inflation and looming tariffs poised to lead to significant underperformance.

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