by InteractiveAdvisors
by InteractiveAdvisors
Outlook Strategies

Be greedy when others are fearful

by |Published

I was definitely curious. When the absence of volatility we saw during the first half of 2015 ended, would the stock market correct or would the rally continue?

We now know the answer.

There is good news in my opinion.

Fear

Discounts Arise

I lack for a crystal ball to pick a bottom. But I do sense that the discounts broadly available in the market make the prospects for adding long term investments attractive.

When you buy closed end funds at wider-than-average discounts, there is a prospect to benefit when the discounts “normalize” to historical means.

That prospect can augment the long term benefits of net asset value returns in various asset classes.

Greed and Fear

I’m a believer in the old market adage: Be fearful when others are greedy and greedy when others are fearful.

I continue to favor using closed end funds in several Covestor models like Taxable Income, Long Short Opportunistic, and Well Intentioned Activism styles.

Photo Credit: Clause Reble via Flickr Creative Commons

AUTHOR

Dan Plettner
Dan Plettner
For more than 14 years I've focused my investing and research efforts on Closed-End Mutual Funds, called CEFs. They represent an alternative way to invest in stocks and bonds. CEFs frequently trade at a discount relative to the price of fund’s underlying portfolio, which I personally see as a way to own stocks and bonds at a discount to their underlying value. I previously worked as a closed-end fund product specialist at Morgan Stanley. More recently, I provided independent closed-end fund research to institutional investors. I have written more than 50 articles regarding closed-end funds and am frequently quoted in the media. My goal is to invest in funds that I believe offer a favorable mix of risk versus potential reward. I attempt to earn a profit when the gap between the market price and the net asset value of a fund narrows.

You may also like