Analyste de Boston

How Tactical Asset Allocation Will Transform Wealth Management

"more than 90% of investment returns come from asset allocation"
I think the author's referring to the widely misunderstood/ wrongly interpreted BHB study : tinyurl.com/lrsw2f

Given the apples-to-oranges comparison, I'm not sure we can say what %age returns "come from asset allocation" - as you and we WOULD think. That oversimplification is essentially meaningless - it's not helpful that "the answer" is misunderstood or convoluted by PhDs, even!

Gut instinct tells me that TACTICAL ALLOCATION can produce superior returns in the short-run (3-5 years), but over a medium term this is due entirely to the managers' discretion/freedom to REDUCE RISK. To paraphrase Warren Buffett, 'the secret to making money is not losing money.'

Managers handcuffed to rigid mandates (i.e. fully invested in risky asset-classes) will continue to lose big widely volatile markets. They carry too much risk! They're too slow to adapt! Identifying long-term skillful - as opposed to short-term "lucky" or favored managers - remains a real challenge, however.

FINRA Has Firms Scrambling: Morgan Stanley Next to Review Leveraged ETFs

"Is there some other underlying theme, other than investor education, that would warrant these firms to remove such a valuable trading tool from investor’s hands?"

Don't you mean to write "...other than CYA..." ? FINRA has all but encouraged investor lawsuits, with its highly prejudiced finding that oh-so-conveniently supports the biggest & baddest ETF critics: the Mutual Fund companies. This isn't an objective affair.

Please note that FINRA negatively commented on BOTH leveraged AND short ETFs. They conflated two separate strategies: why shouldn't an investor short the market with ETFs for "more than one day," again? Equity fund managers don't like these ETFs, that's why.