Cambria Investment Management & The Ivy Portfolio
On April 15, I posted a blog entry entitled "What You Can Do To Make Money In Any Market." In that entry, I disclosed that I'm an investor with Cambria Investment Management, and posted a Businessweek review about the book, The Ivy Portfolio. Below is an article published in Barron’s on Monday about money manager Mebane Faber and his partner, Mazin Jadallah. This article is further proof that if you want to not only survive but thrive in this economy, it’s time to switch to Cambria Investment Management.
Timing Is Everything
A Twist on Allocation
MONDAY, APRIL 27, 2009
Edited by ROBIN GOLDWYN BLUMENTHAL
MARKETS LEFT INVESTORS ALMOST NO PLACE to hide last year, with nearly every asset class heading south. Money manager Mebane Faber of Cambria Investment Management outperformed by a mile, however. Faber, author of the 2006 paper "A Quantitative Approach to Tactical Asset Allocation," combined strategic asset allocation in exchange-traded funds with market timing to produce an average return of negative 2%. That looked mighty attractive next to the Standard & Poor's 500, which plunged 37%.
Faber chooses among five asset classes -- U.S. stocks, foreign stocks, bonds, real-estate investment trusts and commodities -- with cash as the default position. He buys ETFs invested in asset classes trading above their 10-month moving averages at the end of each month, and sells them when the underlying indexes fall below the 10-month trend. Since September, Faber has invested 80% of his assets under management in cash and 20% in bonds.
Faber is co-author of the The Ivy Portfolio, which details his approach. Following the investment tenets of the Harvard and Yale endowments (which until last year both had sterling performance) but without using their riskier alternative assets, he demonstrates how to outperform with lower volatility.
He and partner Mazin Jadallah recently started Alphaclone.com, which piggybacks on the portfolios of 250 of the world's best managers. One strategy has produced a 12.7% total return this year, far outpacing the S&P 500's negative 5.1%.
©2009 Angel Reyes
www.ReyesLaw.com
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