Latest Blog Posts

Income Investing in an Uncertain World | Part 4

Author: Nathan J. Rowader
Date: March 10, 2017
Category: Alternatives, Financial Planning
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In the third part of this series, we extended our simple ranking system to include risk targeting. This extended analysis produced a portfolio that could deliver higher risk-adjusted returns than a simple ranking system and still deliver a yield in excess of the Bloomberg Barclays Global Aggregate Bond Index. In the final part of this series we will look at the same strategy and examine its sensitivity to changes in interest rates.

Income Investing in an Uncertain World | Part 3

Author: Nathan J. Rowader
Date: March 10, 2017
Category: Alternatives, Financial Planning
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In the second part of this series, we outlined how a simple ranking system, using yield and momentum as ranking data points, can provide current income in excess of Bloomberg Barclays Global Aggregate Bond Index with a level of risk similar to the index. This process solved the problem of excess risk in a simple buy and hold strategy of high current income asset classes. For the most part, an investor could simply stop at the ranking system and likely get what they need to achieve their financial objectives. But can we improve on the simple ranking system? Yes we can!

Income Report Card | March 2017

Author: Nathan J. Rowader
Date: March 8, 2017
Category: Asset Allocation, Financial Planning
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U.S. stocks led global markets in February with the S&P 500 Index increasing by 3.97% and the Russell 2000 Index gaining 1.93%. This disparity could mark the end to a period of very strong relative performance for small-cap stocks versus large-cap stocks, or it could just be a lull in an otherwise strong trend.

Income Report Card | February 2017

Author: Nathan J. Rowader
Date: February 16, 2017
Category: Asset Allocation, Financial Planning
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Emerging market (EM) stocks increased by 5.48% during the month of January, as measured by the MSCI Emerging Markets Index. This gain is a continuation of the strong performance in 2016 and helps bolster the case that the emerging markets may be heading toward a better return cycle relative other markets.

Income Report Card | January 2017

Author: Nathan J. Rowader
Date: February 10, 2017
Category: Asset Allocation, Financial Planning
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Assuming you believe the case for economic growth highlighted above then which markets should benefit? As of right now, the least expensive markets are in the emerging markets including Russia, China, South Korea and India. Additionally, many of these same countries have the wind at their back with strong momentum. Meanwhile, some of the most expensive markets are developed countries such as the United Kingdom, France, Canada, Italy and Spain. Which are also exhibiting very weak momentum. A combination of poor valuation and a lack of investor enthusiasm usually spells trouble.

Income Investing in an Uncertain World | Part 2

Author: Nathan J. Rowader
Date: January 20, 2017
Category: Alternatives, Financial Planning
Tags: , , ,

In the first part of this series, we outlined the risks associated with achieving long-term investment objectives in a low interest rate world. The solution we outlined increased exposure to higher income assets such as high yield or emerging market corporate bonds. As we indicated however, increasing the exposure to these asset types indeed increases the risk of the overall portfolio in terms of volatility and maximum drawdown. This presents a conundrum: Should an investor merely accept more risk or is there a better way to manage the increased level of risk and still increase the overall income from the portfolio?

End of Year MLP Update: Positive Outlook

Author: Ted Gardner, CFA
Date: December 20, 2016
Category: MLPs
Tags: ,

This quarter has been a whirlwind for the energy space. Among the notable events were the surprise presidential election of Donald Trump and the agreement to cut oil production by the Organization of the Petroleum Exporting Countries (OPEC), both of which have been positive for global energy markets thus far. The Salient MLP team believes that these key events may continue to bolster the energy recovery into 2017.

Income Investing in an Uncertain World | Part 1

Author: Nathan J. Rowader
Date: October 11, 2016
Category: Alternatives, Financial Planning
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As the recession of 2008/2009 wound down, many investors began to survey the wreckage of the financial markets and shift their attention from asset preservation to capital appreciation. Traditional fixed rate bonds, particularly sovereign bonds such as U.S. Treasurys, appeared to be grossly overvalued thanks to aggressive monetary stimulus from nearly every central bank.


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