My Alma Mater

By Aline Wealth Management on October 28, 2016

Around the nation this is graduation time and perhaps I became somewhat caught up in the emotions (my eldest graduated last weekend—it actually made the Sunday Talk Shows—check it out: https://www.youtube.com/watch?v=sZzZENMpEmk ) for I started to think of my “Alma Mater”.

While a count myself as a proud alum of some great institutions (The Bronx HS of Science, Stony Brook University and Baruch Graduate School) I really find my “professional school” to be that of a Value Style investor.  Partly due to my penchant for insuring a substantive margin-of-safety as well as my training as a Chartered Financial Analyst (CFA),  I am typically bowing down to the tenets of fundamental security analysis rather than momentum investing or trading. Value investing, as many of you know, has been out of favor for the last 5 years – growth and especially momentum investing have been the hot dot on the charts.  But with their stretched multiples and thesis based on hope rather than cold hard assets or earnings, I chosen not to chase these hot stocks.

But now the tide is turning.  Late last year I called for a “pivot to value” largely due to the huge dispersion of returns in 2015 (out of the 500 stocks in the S&P index 10 were up 10% and 490 were down on average 7%!) and the good news is that when value starts to get going it does so for a while and with strong out performance (see the chart below as evidence to this – using the lowest PE quintile as a proxy for value):

While it is important to have exposure to many different styles and asset classes it is even more important to focus on what you know well and to avoid what is likely exposed to excessive risks.

Staying on the brevity side of things – I thought to leave it there and simply offer the following link for your viewing pleasure:

We are pleased to announce the debut of Client First, an interactive website that highlights the strategic advantages and benefits of working with a HighTower partner, as well as how HighTower’s model supports the end-client’s financial well-being and best interests.

HighTower: Client First

Have a great long weekend—and always know that we appreciate your continued support and vote-of-confidence and are here for you to discuss your portfolio, comprehensive wealth management plan or the market environment.