Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| Benchmark |
What It Is:
In the finance world, a benchmark is a feasible alternative to a portfolio
against which performance is measured
How It Works/Example:
Let’s assume you compare the returns of your stock portfolio, which is a
broadly diversified collection of small-cap stocks and is managed by XYZ Company, with the Russell 2000 index, which you feel is an accurate universe of
feasible alternative investments. If your XYZ Company portfolio returns 5.5% in
a year but the Russell 2000 (the benchmark) returns 5.0%, then we would say that
your portfolio beat its benchmark.
Benchmarks help an investor communicate his or her wishes to a portfolio
manager. By assigning the manager a benchmark with which to compare the
portfolio’s performance, the portfolio manager will make investment decisions
with the benchmark’s performance in mind.
The most commonly used benchmarks are market indexes such as the Dow Jones
Industrial Average, the S&P 500, or the Russell 2000. However, there are dozens of other
market indexes out there that focus on specific industry sectors, security
classes, or other market segments. Investors also use other portfolios, mutual
funds, or even pooled accounts to construct benchmarks. LIBOR is one of the most
widely used benchmarks for short-term interest rates, and the Fed controls
another common interest benchmark known as the Fed Funds rate.
A good benchmark should appropriately reflect the portfolio’s investment style
and strategy as well as the investor’s return expectations. For example, the
Russell 2000 may be an appropriate benchmark for a portfolio investing
exclusively in small-cap domestic stocks, but it may be inappropriate for a
portfolio investing in bonds and international REITs. Comparing a portfolio to
an inappropriate benchmark could yield misleading information. The portfolio may
look fantastic compared to one benchmark but lag considerably behind another. It
is difficult to benchmark some portfolios effectively, especially real estate
portfolios, where each asset is unique. Further, it is important to compare a
portfolio with its benchmark over a long period of time.
Portfolio managers vary in their benchmark strategies. For example, passive
managers seek to replicate their benchmarks. This is the strategy
behind index mutual funds, which replicate broad market indexes or indexes of
securities with special characteristics. Actively managed portfolios on the
other hand, seek to beat benchmark returns but generally require added risk and
expertise to do so.
Portfolio managers frequently receive incentive fees if their portfolios exceed
the benchmark return. However, it is important to structure these incentives in
a manner that does not motivate a manager to unduly increase the portfolio’s
risk.
Why It Matters:
Comparing a portfolio’s returns to a benchmark is a way to measure a portfolio
manager’s skill. It answers the question, “What value was added by the
manager’s decisions?” The difference in the portfolio and benchmark returns,
called tracking error, quantifies this. Tracking error gives investors a sense
of how “tight” the portfolio in question is around its benchmark or how
volatile the portfolio is relative to its benchmark. As a result, benchmarks not
only measure returns, they help measure risk and help the investor determine
whether the added return adequately compensates for the risk involved.
Benchmarking lies at the heart of the controversy between passive and active
management. Passive managers often note that active managers frequently fail to
match or beat their benchmarks, and they question the reliability of active
managers’ methods for recognizing and predicting trends. Many passive managers
espouse the efficient market hypothesis, which says that stock prices are random
and already reflect all available information (thus concluding that it is
impossible to always beat a benchmark).
Regardless, active managers who have beaten market benchmarks often enjoy a
large and loyal following among investors. However, consistently beating those
benchmarks remains a big challenge as does defining what they should beat in the
first place.
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Who Cares What the Market is Doing When You're Pulling in $28,900 a
Year in Dividends?
With the safe, growing, high-yield picks that Editor Carla Pasternak
recommends every month you don't have to worry whether or not the
market has bottomed. You can sit back and collect annual dividend
paychecks of $16,300, $19,900 or even $28,900!
You can't go wrong looking into Carla's recommendations. A year from
now, when you've collected as much as $28,900 from dividends alone
you'll be glad you did. Take the first step and,
read this report now.
Seven "Yield Doubler" Stocks That Are Clobbering The Dow
Just 12 trading days before the market hit its 6,500-point low this
year, the "Yield Doublers" portfolio was born. That was
almost 4 months
ago. The Dow has rebounded +12% since then -- but our seven "Yield
Doublers" have clobbered that figure by a factor of up to 9-to-1...
delivering up to +144.2% gains to boot!
Go here to see why you should add these "Yield Doublers" to your
portfolio today.
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We're
Putting $50,000 on the Line in Our NEW Stock of the Month Portfolio
We're SO confident in this strategy
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Two
Infrastructure Stocks That Are Profiting From Massive Government
Spending
Since the stimulus package was signed into law on
February 17th, these two infrastructure picks have moved up quickly.
One's a worldwide construction company that's already gained +32% to
date. The other makes critical copper, aluminum and fiber optic
cables... and shot up +41% in a matter of just weeks. Both are headed
higher. You’ll find their names in this special report. |
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3
Penny Stocks Poised to Soar 300%
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Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
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get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
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