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Finance and Financial Management

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2012

Chapter 11

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Full-Text Articles in Business

"Alternative" Alternative Investments, Steven D. Dolvin Oct 2012

"Alternative" Alternative Investments, Steven D. Dolvin

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Typical Alternative Investments include such categories as commodities and real estate. However, some investors have branched out into more esoteric assets such as cars and collectibles. As such, there is a growing category of managers offering such funds. See the article here, Wall Street Journal.


High Yield Debt, Steven D. Dolvin Sep 2012

High Yield Debt, Steven D. Dolvin

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High Yield Debt is a nice way of saying "junk" debt, i.e., debt that is considered speculative grade. As you would expect, the yield on such debt, due to higher default risk, is higher than standard investment grade debt. However, with historically low interest rates, even the yields on "high yield" debt don't look so high any more. See article here, International Financing Review.


Is Diversification Dead?, Steven D. Dolvin Jun 2012

Is Diversification Dead?, Steven D. Dolvin

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Diversification (primarily based on asset correlation) is a key component of Modern Portfolio Theory (MPT). However, the recent financial crisis illustrated an increase in correlation across asset categories. Thus, many debate whether diversification still helps. Even with increasing correlations, diversification still provides benefit (possibly just not as much). However, the more relevant issue is that increasing correlation across the typical asset categories suggests that diversification is now more critical across "non-typical" categories -- such as commodities, hedge funds, and private equity funds. .