Gary Allen on Business, Sunday, August 16, 2015 – Podcast Now Available

Silver and Gold! Hedge Fund Performance and More

Yukon CorneliusYukon Cornelius is one of my favorite characters from the childhood classic, Rudolf the Red Nosed Reindeer. Yukon is the ultimate prospector always looking for silver and gold with his trusty pickax. Unfortunately… his most famous line from the movie is… nothin!

As a child I loved the song Silver and Gold sung by Burl Ives. But as an investment professional, I am not a big fan of silver or gold. There are several potential reasons to invest in silver and gold but alas the evidence points out they have not done so well for most folks.

In segment one of the program, I cover what is called a pre-mortem investment exercise. In simple terms, it is to imagine what would happen if your portfolio blew up before it happens. It is something similar to what I call the fire drill exercise.

Instead of waiting to conduct a postmortem exercise after your portfolio blows up, it is better to plan in advance for the worst and make any corrective actions necessary to beef up your portfolio risk management.

Segment two is all about Silver and Gold… see above.

Segment three is a look at hedge funds and their long-term performance. You may want to seriously look at those fancy numbers that hedge fund salespeople are showing you. It may be surprising just how poorly they have done in recent years. In fact, many hedge funds had only a few years of great performance early on… and then lots of lean years since then.

Segment four is a quick discussion on the idea of focusing your investments on a final goal of income instead of wealth. There are a lot of implications if you focus on income versus wealth.

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