“Balancing” your portfolio – wisdom or chimera?

Chimera at DeviantArt.net

Still giving advice to young investors here.

Longtime readers are familiar with this IFO theme: forget the advice from the smart guys who want to manage your money for you, because, you know, you are too busy, too ignorant, too scared, to do it for yourself.

If this attitude annoys you as much as it does IFO, you can use the article below to bolster your confidence, if you need it, or your in-your-face contradiction of the money managers, if you prefer that.

From the WSJ: Investors warned on Carlyle Hedge Fund:

Hedge-fund losses are causing more headaches for private-equity firm Carlyle Group CG 0.04 % LP.

Carlyle’s $4.9 billion hedge-fund firm, Claren Road Asset Management LLC, faces the prospect of investor withdrawals after an influential consultant advised clients who are invested in Claren Road to pull their money, according to people briefed on the matter.

The consultant, Cliffwater LLC, has clients with about $800 million invested in the firm, one of the people said, comprising 14% of Claren Road’s total assets under management. It wasn’t clear why Cliffwater made its recommendation, though the move follows a 4.9% loss in June by Claren Road’s flagship fund and a 10% loss by the fund last year. The flagship fund mainly invests in corporate debt and credit derivatives. [emphasis mine]

The market has been nasty lately. In my opinion and experience, when the market is declining, nearly every asset declines. “Balancing” is a chimera, as Wikipedia says:

The term chimera has come to describe any mythical or fictional animal with parts taken from various animals, or to describe anything composed of very disparate parts, or perceived as wildly imaginative, implausible, or dazzling.”

Or, a thing that is hoped or wished for, but in fact is illusory or impossible to achieve. illusion, fantasy, delusion, dream, daydream, pipe dream, figment of the/one’s imagination, castle in the air, mirage

Just get the assets you want, know and understand, and you’ll be fine.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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