Archives for July 2014

Blumenthal On Zweig Bond Model In Forbes

Posted on 07.31.14 |

Steve Blumenthal, CEO, CMG Capital Management Group

CMG Capital Management Group CEO Steve Blumenthal initiated his monthly analysis of the Zweig Bond Model in Forbes. See Zweig Bond Model Remains Bullish.

Created in the mid 1980’s by famed investor Marty Zweig, the Zweig Bond Model’s objective is to invest in bonds with longer maturities when interest rates are declining (a good environment for bond investments) and to invest in shorter-term instruments when interest rates are rising (a bad environment for bond investments).

It’s a mathematical and unemotional process. While Wall Street was saying interest rates will head higher in 2014, this process stayed invested in longer-term bond funds and bond ETFs. So far, year-to-date, that has been the right move (bullish buy signal for bonds).

Keep Up With CMG On Social Media

Posted on 07.29.14 |

CMG Capital Management Group is on the move, leading the investment management business in tactical investment strategies. We are constantly producing intelligence that can help advisors better understand diversified portfolio construction, the markets, and how to develop a more productive practice.

What better way to access that intelligence than through social media?

Blumenthal on High Yield Bonds in Forbes

Posted on 07.28.14 |

CMG Capital Management Group CEO Steve Blumenthal sounds the alarm on high yield bonds in his latest Forbes article (excerpt below). See the whole article here: Code Red In High Yield.

Steve is off this week, enjoying a vacation in Nantucket. Read about that and his further discussion of the dangers/opportunity in the high yield market in his 7/25/2014 On My Radar: “Seen through my lens, another “once in a generation” buying opportunity is fast approaching. I remember saying the same thing in 1999 and 2007. The lines between generations must be shrinking as such opportunities seem to appear about once every seven years or so.”

In my 20 years of managing high yield bond investments, I’ve never seen so many signals that scream caution. Desperate to find yield, investors have poured billions into high yield bond funds and ETFs driving the yield on the Barclays High Yield Bond Index to just 5.54% — the lowest level in history. Investors are positioning in a risk they may not fully understand.

Let’s look at what will lead to the next default wave and discuss a tactical strategy that may help you further participate in price gains and also protect your wealth during periods of significant price loss.

– Forbes Code Red in High Yield.

Considering Risk & Return in Choosing Investment Options

Posted on 07.25.14 |

Michael Hee
Managing Director, Investment Research
CMG

In our previous posts on risk we examined the definition of risk and how to measure risk. In this post we will examine how to measure risk and return through statistics by examining ways to compare the risk-adjusted performance of investments with differing risk and return profiles. Incorporating these ideas will help you determine the most appropriate investment choices for your clients.

The Sharpe ratio, developed by Nobel Laureate William F. Sharpe, is a statistic which measures risk-adjusted performance. The ratio expresses how much additional return is received from an investment portfolio for each additional unit of risk taken on. It is calculated by subtracting the risk free rate of return, such as the 3-month T-bill rate, from the rate of return for an investment and dividing by the standard deviation of the portfolio returns.

World Class Preparation

Posted on 07.22.14 |

…Tips for successful seminar selling

Michael F. Sciortino, Sr.
Executive Vice President, Managing Director, Head of Distribution
CMG

Luck is where preparation and opportunity intersect. The sky’s the limit…really! So why not adequately prepare? Have you ever attended a Broadway play? If so, you know the quality of these productions. What you may not have realized is the hours and hours of preparation and practice that go into the production. This is a proven formula for success.

Pro Tip: Rehearse in front of the mirror
to improve your technique

In our business, those who successfully market using seminars prepare as well. The best I have seen have a way of conveying enthusiasm and passion for their topic. I remember early on in my career asking a successful advisor how he became such an accomplished speaker. His formula was simple. Prior to the evening of the seminar, it was not uncommon for him to deliver that presentation numerous times to an audience of one, his mirror. That enabled him to work out the proper pauses, correct voice inflections and practice necessary mannerisms to connect with his audience.

“What’s the most important word in marketing?”

Posted on 07.18.14 |

Michael F. Sciortino, Sr.
Executive Vice President, Managing Director, Head of Distribution
CMG

You is the most important word!

On a recent Southwest Airlines flight, as I was served my cup of coffee, as usual I received a Southwest napkin. On one side was a map of the United States and all the places they fly. What struck me was the headline…”We’re America’s largest domestic airline for one reason: You.”

This indeed is why they are the largest. They get it! They go out of their way to serve you, their customer. They also focus their marketing on you, their customer. As I have flown this airline over the last 25 years, I have witnessed countless examples of world class service and marketing. From the ticket agents to the baggage handlers, from the flight attendants to the pilots, they all realize that their number one mission is to serve you, their customer.

CMG In Chicago At BCM Annual Conference

Posted on 07.16.14 |

The CMG team is in Chicago this week at the historic Drake Hotel for the 2014 Brookstone Capital Management Annual Conference. We are thrilled to partner with Brookstone and to have the opportunity to spend time with the advisors and the home office staff.

CMG Capital Management Group CEO Steve Blumenthal will speak at the conference on tactical investing strategies as well as offer some insight on the equity markets, the likely direction of interest rates and important lessons learned over the last 30+ years on Wall Street.

Week In Review

Posted on 07.11.14 |

Summer is Here The big news of the week, of course, happened a few hours ago when LeBron James announced that he was taking his talents back to Cleveland. Now that the most important event in sports has been decided, we can examine the financial markets, which are not as clearly defined as the future of the King of Basketball.

This was a week when the high valuation of virtually everything has been examined and analyzed. In his 7/7 article in The New York Times, Neil Irwin writes Welcome to the Everything Boom, or Maybe the Everything Bubble. Nearly every market and every asset class is highly valued according to historical standards.

What does that mean for an investor today?

Forward P/E Is Poor Investment Valuation Tool

Posted on 07.09.14 |

By Steve Blumenthal, Chief Investment Officer, CMG Capital Management Group

I cringe when I hear someone on Wall Street say that the market is cheap based on forward P/E (price-earnings ratio). Unfortunately, profit margin cycles change (revert back to trend) and those lofty earnings estimates get revised lower, making forward P/E a poor valuation tool. I came across this chart this week. Note where forward P/E was in October 2007 (15.2) and where it is today (15.6).

Happy 4th of July

Posted on 07.03.14 |

Fireworks Statue of Liberty 4th of July The New York Stock Exchange and Nasdaq close at 1 p.m. ET and all markets are closed on Independence Day, July 4th.

Comex floor trading for metals futures and options will end at 1:30 p.m. today, while Nymex floor trading for oil will at 2:30 p.m. Floor trading won’t re-open until Monday. All trades on CME’s electronic Globex platform after 5 p.m. will not be cleared until Monday.

We’d like to wish all our friends, associates and partners a happy holiday weekend. Since we are serious numbers crunchers and passionate about data here at CMG, we think the occasion calls for some good old 4th of July trivia! Enjoy.