real steel

By “Real” They Mean Non-Emotional, Logical, Made Of Titanium Etc.

“Two of the largest computer-driven ‘robo-advisors,’ programmed to operate in a non-emotional, logical environment, are in fact engaging in a somewhat emotional, illogical catfight, ushering in a new era of the fighting robot stock broker.”  Read on to see Adam Nash, CEO of Wealthfront, accuse Charles Schwab of misallocating portfolios towards cash (i.e. “Schwab will sweep the cash allocation of client managed accounts into Schwab Bank and earn a net interest margin on this cash”) and smart beta ETFs with higher fees in order to benefit Schwab-bot’s bottom line.  Then!  Make sure you don’t miss out on the Charles Schwab blog’s response to blog!  Meanwhile…some perspective: “all of these robo-firms have grown up in a bull market.  Now, I know they’re all rolling their collective robo-eyes right now and anticipating what I’m about to say next — but when the next crash or correction happens…this will be the first real test on their service model, which is completely a different thing than actually investing.  Buying & selling is one thing — proactively servicing that client base is something completely different…A real adviser is a useful anchor to bring people back from the echo-chamber of their minds, and probably prevent them from biting off more than they can chew.”  Meanwhile, Brian Portnoy thinks that “for financial advisers as much as anyone, diversification almost always means having to say you’re sorry…Two things are clear.  One, a diversified portfolio will often have outright losers in it.  Two, the gap between the top dog and the mutt is often very wide.  The opportunity to feel regret is frequent.  Alas, diversification usually doesn’t feel very good.”  Meanwhile, here are the answers to 10 pressing investor questions, programmed to operate in a non-emotional, logical environment (good luck with that).

 

Dollar Noise Is Turnt Up

It had a great, big day yesterday!  But “unfortunately for investors with foreign-currency exposure, predicting the dollar’s direction is no easy feat…However, there is strong evidence that suggests currency markets exhibit certain tendencies that could help predict the direction of the dollar.”  “On the euro side of things, we knew that QE was going to happen, so the euro move is starting to be baked in.  On the dollar side however, there are still a lot of unanswered questions around the likely timing of a rate hike, meaning that there is still plenty of potential for the buck to rise.”  Jeffrey Gundlach, of “he KNEW what was going to happen with interest rates” fame, says “‘the consensus is right’ and a contrarian positioning could hurt a portfolio.”

 

WM: High-Yield Bonds Hit New Low In Covenant Quality

 

EU: Greece Isn’t Done Hogging Your Attention

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