Flirting with Models
Talk Your Book: Return Stacking [REPLAY]
Aug 20, 2024
Corey Hoffstein, a specialist in managed futures from Newfound Research, joins the discussion on innovative investment strategies. He dives into return stacking, revealing how it enhances capital efficiency in portfolios. The conversation touches on the complexities of diversifying beyond traditional methods, the impact of high-interest rates, and leveraging alternative assets. Hoffstein also navigates the evolution of investment strategies post-2008 and shares insights on the role of personality in successful asset management.
37:19
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Quick takeaways
- Return stacking effectively enhances portfolio diversification by incorporating alternative assets like commodities while maintaining existing stock and bond positions.
- Managed futures strategies are crucial for performance during market volatility, capitalizing on trends and providing positive returns when traditional investments struggle.
Deep dives
Return Stacking as a Diversification Strategy
Return stacking is primarily aimed at addressing diversification issues within investment portfolios. Traditional approaches often default to a 60% stocks and 40% bonds allocation, which lacks exposure to alternative assets like commodities or gold. The concept emphasizes adding alternative investments without needing to sell existing positions in stocks or bonds, thereby overcoming the high hurdle of making room for these diversifiers. This addition allows for greater consistency in achieving desired investment outcomes while ensuring emotional factors in investment decisions are taken into account.
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