Asset allocation is important to reduce risk.  Approximately 90% of portfolio total return comes from the asset classes you select and the relative weights you give them.

The word “never” is a dangerous term to use, particularly with respect to investing, but we believe it is probably safe to say that an allocated portfolio will never return as much as the best performing asset class, and it will never perform as badly as the worst performing class.

The important assumption is that an allocated portfolio is “expected” over the long-term to produce the blended mean return of the asset classes in the portfolio, and to do so with less volatility and less extreme draw-downs than the more volatile classes in the portfolio.

Unrealistic Expectations:

“Expected” is a tricky operative term.  We always ask new clients to indicate what returns they expect from their portfolio.  The answers are often way out of line with practical

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Hello Friends!  Thanks so much for stopping by and visiting my blog, Stock Picks Bob’s Advice!  As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisers prior to making any investment decisions based on information on this website.

I wanted to try to briefly review a stock today and looking through the list of top % gainers on the NYSE, I came across Ensco (ESV) which as I write is trading at $78.65, up $4.21 or 5.66% on the day.  I do not own any shares nor do I have any options on this stock.  However, I would like to share with you briefly why

ENSCO (ESV) IS RATED A BUY

First of all, what do they …

Knock on wood but we continue a strange streak of no major earnings blowouts from the myriad fund holdings. I had reduced both positions going into earnings to reduce risk, but looks like both came through quite well. As opposed to Huron Consulting (HURN) which we sold out of yesterday, peer FTI Consulting (FCN) just continues to execute quarter after quarter; beat estimates and raise guidance - par for the course for these guys. All the drivers that should be driving HURN are in fact driving FCN. All this earnings growth even with a large share count increase (nearly a quarter) - even more impressive. Business advisory firm FTI Consulting Inc. said Wednesday its first-quarter profit more than doubled, surpassing Wall Street's expectations, as fallout from the subprime mortgage mess spurred strong revenue growth across all business segments. For the three months ended March 31, the company reported income ...

At Peridot Capital, I tend to ignore insider selling completely. Sure, a lot of sales inside a company can indicate management feels their stock is overpriced, but there are dozens of other reasons top brass sell stock, and they are never required to give the reason for their actions. Investors should be able to tell if a stock is grossly expensive or not on their own, if they indeed manage their own money, so insider selling data really can’t be relied upon.

Insider buying, however, I believe is crucially important. While I can make a laundry list of reasons why someone chooses to sell a stock, the reasons to buy are much fewer in number. In fact, there’s only one (to make money). It’s not surprising that studies have shown much more meaningful correlation to stock performance

The fundamental question in buying stocks is the expected earnings (or cash flow, depending upon the sector) compared to the stock price. One compares this to alternative choices like bonds or real estate or foreign markets. On a risk-adjusted basis, one’s asset allocation should favor the undervalued asset classes.

At “A Dash” we believe that U.S. equities, despite a multi-year, double-digit profit expansion, and some market reaction, still reflect intense investor skepticism about future earnings. The biggest cloud over the earnings picture is the continuing (and so far incorrect) forecast of a recession by bearish pundits, mostly non-economists.