The Alternative Answer: The Nontraditional Investments That Drive The World's Best-Performing Portfolios

The Alternative Answer: The Nontraditional Investments That Drive The World's Best-Performing Portfolios

Book Review: The Alternative Answer: The Nontraditional Investments That Drive The World’s Best-Performing Portfolios by Bob Rice.

Bob is the Alternative Investments Editor for Bloomberg TV and is the Managing Partner of merchant bank Tangent Capital, and serves on boards of investment management firms with over $2 billion of ‘Alternative’ assets under management.

The Alternative Answer is divided into multiple sections:

The Alternative Manifesto
Major Alternative Strategies
Major Alternative Structures
Higher, Inflation-Protected Income (Job 1)
Broadening the Base for Risk Reduction (Job 2)
Long-Term Growth Enhancement (Job 3)
Purchasing Power Protection (Job 4)
Big Picture
At the Dealership
References/Glossary

Manifesto:  There are four mandatory tasks for investments:

  • Job 1: Generate income that is greater than typical fixed income (bonds), with focus on income that rises with inflation.
  • Job 2: Reduce overall risk by diversifying broadly across different strategies and asset classes.
  • Job 3: Enhance long-term growth with opportunities that have more upside than traditional investments (stocks).
  • Job 4: Protect Purchasing Power from inflation, currency devaluation and panics.

Continue reading


[RANT]

Health Care rationing is in everyone’s future- The only question is whether or not the rationing will come via nationalized/socialized medicine (a “Single Payer” system like Medicare), or if the health care rationing will come via self-discipline (Consumer-Driven or High Deductible Health Plans).

I’ve read a few decent books touting the virtues of High Deductible Health Plans with Health Savings Accounts. The first book is “Skin in the Game” by  McKesson CEO Paul Hammergren.  Hammergren’s key point is that there is zero transparency in true health care costs under the current system, and that consumers have no ‘skin in the game’ unless they are on a high-deductible health plan or consumer-Driven health plan. Continue reading

Carl Loan versus Depreciation

File under: Personal Finance for Everyone.

I read a disturbing article during the past week.  Reuters and WSJ reported that the average length of a new car loan is now 65 months(!).

Many personal finance experts like Clark Howard state that you should not go past 40 months on the length of a new car loan.  Why?  For longer loans, you’re what’s known as ‘upside down’ on your loan- You owe much more on the loan than your car is worth.

In spite of this, banks are now writing 7 and 8 year car loans. Continue reading

Aetna High Deductible Health Plan FEHB Federal Employees

Let’s say you are shopping for Health Care Plans during FEHB Open Season, and are considering switching to a High-Deductible Health Plan/Health Savings Account.   You’re curious about the ‘real’ cost of your prescription Meds under a High Deductible Plan and want to find out more.

Aetna has a tool for this, a website advertised for Federal  Employees at Aetnafeds.com.  There is even a ‘test drive’ password, ‘federal3’ that you can use to check the list of doctors and estimate the costs of prescription drugs under their plan.  Performing your due diligence, you login with username and password  ‘federal3’ and take it for a spin:

Aetna High Deductible Health Plan FEHB Federal Employees

You Click on “Estimate Drug Costs” and continue with pricing your drug. Continue reading