Investing and Portfolio Management

Has Gold Lost Its Shine? – 2014

Since last reporting on gold in our second quarter 2013 Wescott Investment Commentary article, “Has Gold Lost Its Shine?”, the price of gold bullion rose to $1,419.50 on August 28, 2013 before falling to $1,204.50 by year-end. In 2013, gold was down 27.3%, its biggest decline since 1981 (during which it was down 32.6%). Investors in gold-backed exchange-traded…

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Are ETFs Leading Investors Off-Track?

We thought it would be helpful to update our perspective of exchange traded funds (ETFs) and provide our top reasons why we do not directly employ ETFs in our model. It is important to note, however, that some of our managers use ETFs in their portfolio construction to gain exposure for an asset class that…

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The Secret Life of Bitcoin: From Seedy Past to Cloudy Future?

During the past several years, the world of virtual currencies has exploded, of which bitcoin has been the most popular. The growth in virtual currencies has been driven by a desire to avoid banks and regulators. The fist thing to know about bitcoin (and all virtual currencies) is that this is unregulated territory. There is…

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Effective Strategies for the Management of Concentrated Stock

There are some investors who feel that you have to “bet big” in the stock market to become rich. They are willing to put all their eggs in one basket by investing a large percentage of their investable assets in one particular stock. Others may not intentionally have made this “big bet”, but it just…

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Playing Defense with our Bond Portfolios’ Positioning

We believe that we are facing a treacherous time for bond investments that have been made without regard to pricing and interest rate sensitivity. The mad rush to bonds resulted from extreme risk aversion to stocks. After cashing out of stocks at the wrong time, investors rushed into bonds at a time of historically low…

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The Risks of the Fed’s Quantitative Easing and QE3

Since 1980, the policy of the Fed has been to avoid a repeat of the “Great Inflation” that gripped the U.S. economy during the 1970s. The political pressure to improve economic conditions has been a constant for the Federal Reserve throughout its history. Effective with the Employment Act of 1946, the Fed has been assigned…

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Market Impact – Wescott’s Perspective on ETFs

Since 1993, the Exchange Traded Fund (ETF) industry has grown to include approximately 1,100 products representing $1.1 trillion in assets. In 2007, there were approximately 430 products with $430 billion in assets. During 2011, fixed income ETFs have drawn the greatest cash flows within the ETF universe, with $16.1 billion added during the first half…

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The Development of Wescott’s Asset Allocation Policy

Wescott’s Asset Allocation Policy has been developed after years of research and observations, and is built upon a deep foundation of academic and economic research. We begin with an analysis of long term historical performance trends or the various asset classes, utilizing the University of Chicago’s Center for Research in Security Prices (“CRSP”). We then overlay…

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