Break from the Grind February 16, 2017

A Little Friday File Fun

Reported by

New versions of Monopoly will no longer give players the option of using a tiny silver-colored thimble as their pawn on the board, after fans voted to drop the piece that had featured in the game since its introduction in 1935, Reuters reports. Players also had the option to vote online on a new pawn to replace the thimble, with choices including monster trucks and flip-flops. Hasbro plans to reveal their choice next month.

In London England, a woman met a man on a dating site and they went out on a date. When he asked for a second date, though, she replied she was not interested. That’s when he sent her a message saying he was deeply disappointed and would appreciate it if she contributed to the amount he spent on her. He said he had saved up to give her a really nice date. The bill for the date was about $60 U.S. The UK’s Metro reports that she did refund him for the date, but also sent the same amount to a donkey sanctuary.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

In Meridian, Idaho, a teen broke into a home and was trying to get into a g.un safe when suddenly, a squirrel came flying out of nowhere and scratched him. The teen was frightened, took what he could, and left. Turns out the squirrel lived in the home as a pet, since it was discovered in a flower pot by a friend’s daughter when he was about one week old, the Associated Press reports.

In Munich, Germany, the driver of a $74,460 Tesla Model S spotted another car on the Autobahn driving erratically. He pulled up next to the car and noticed the driver was in trouble. “The driver had tipped forward and hung motionless in his seatbelt,” the man told German newspaper Munchner Merker. “His head and hands hung limply.” The Tesla driver moved in front of the other car and slowly pumped his brakes until both his Tesla and the Passat came to a stop. He got out of his car and went into the Passat to check on the man, who he determined had a pulse, but was also foaming at the mouth. The news report says the man had a stroke, but is now in stable condition. Tesla CEO Elon Musk wrote on Twitter that the company would cover the costs of repairs in appreciation for the driver’s actions.

This beagle gets distracted several times at the dog show. So cute.

If you can't view the below video, try https://youtu.be/BOsY6nZ4580

You’ve heard of golf-widows; this woman is a virtual-reality widow.

If you can't view the below video, try https://youtu.be/yAfbwpkrsI4

Investing February 16, 2017

Market Environment Means a New Take on Diversification

The holdings in your portfolio should fluctuate for different reasons and in different environments, Willis Towers Watson says.
Reported by

Considering the “combined expectations for low asset returns and the unavoidable reality of downside risk in a highly uncertain global political and economic climate,” investors of all types are looking for new ways to diversify their portfolios, according to a new analysis from Willis Towers Watson, “Breaking the Style Box.”

The research suggests institutional investors will likely only be able to achieve “low- to mid-single digit returns on traditional 60/40 portfolios of equities and fixed income” for the foreseeable future. This is driving many to consider new approaches and new exposures, particularly on the risk-asset side of the equation.  

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

But, as the research points out, there is a “common view that diversification is isolated to equities and means buying equities of different types such as value or non-U.S. This approach may have merit, particularly in a big equity market like the U.S., but in reality, all of those assets’ returns are highly related and tend to be caused by similar circumstances—corporate earnings growth.”

The research suggests a “total portfolio” must be “diversified through the use of multiple return drivers across markets and capital structures, not just multiple listed asset classes … The most prevalent asset classes in U.S. institutional portfolios are all macro sensitive. The problem is they tend to disappoint in stress episodes when they are needed the most.”

Researchers go on to suggest the “belief that a well-diversified portfolio requires several asset classes is another diversification misperception.”

“We’d argue that it’s the quality of your return drivers, not the quantity of asset classes, that makes a well-diversified portfolio,” the paper suggests. “Put simply, the holdings in your portfolio should fluctuate for different reasons and in different environments. This is accomplished by knowing the underlying return driver of a holding. Is it illiquidity, complexity or even implementation? Does the willingness to take risks, or make decisions others cannot or will not due to constraints, drive returns?”

The Willis Towers Watson researchers conclude “it is possible to meaningfully improve many institutional investor portfolios with a small number of liquid and low-cost strategies that, based on our experience, aren’t prevalent in many portfolios today.” These include strategies such as “holdings that simply take a quarter or two to liquidate—a far cry from the decade-long hard lock structures to which many investors are averse.”

The full research report can be downloaded here. 

«