Why Do People Need Venture Capital?

　　 Finance After the crisis, the major Fortune Management Inc have adopted a conservative investment strategy, and then as the economy improves and interest rates rise, they can no longer tolerate the unyielding rate of return. In order to get more profits, they will not hesitate to take even greater risks.

According to the latest report, in the past five years, the largest 40 Fortune Management Inc in the United States have been carrying out defensive strategies. They either hold cash or buy bonds and stocks of large companies. Even so, some people criticize their investment instability, liquidity and economic environment.

We are not discussing how to increase investment risk. However, many investment types are indeed reappearing in the portfolios of large Fortune Management Inc customers: stocks in deep crisis European countries, such as Spain, sub investment European bank loans, sub prime loans and hedge funds, which use financial derivatives and others in 2008, 200 9 years of performance and liquidity problems, and investors scared of financial instruments.

What is even more interesting is that these wealthy clients are pushing more risky investment strategies in private. In May, the Bank of America's wealth management department, the US trust, surveyed 711 individuals with more than $3 million in investment assets. 60% of respondents said they valued asset value rather than asset maintenance. They had already had enough of the day that they could not get high returns.

This is a complete negation of the defensive strategy implemented since the outbreak of the financial crisis in 2008. The fact is very simple. In a low interest rate environment, the desire for high yields naturally leads wealthy investors and their financial managers to more risky investments.

Omega consultants (Omega) Leon Kuberman, of Advisors, said: "people who buy short-term treasury bonds can't get a return. They start to buy long-term treasury bonds. People who buy long-term bonds begin to invest in corporate loans. People who invest in corporate loans turn to high-yield products, and those who buy high-yield products start investing in structured loans. Finally, those who originally purchased structured loans. I turn my eyes to stocks, and everyone is taking a step in the risk curve.

At the same time, the way to reduce portfolio risk has become more complex and difficult to grasp. In the past, holding core bonds could effectively offset the risk. However, taking into account the rise in interest rates, fund managers try to reduce their holdings of bonds. In order to maintain asset safety, they are using alternative investment strategies.

Tobias Moskowitz, a professor of finance at University of Chicago's Booth School of business, said: "alternative investment strategies may be effective, but it may lead to two outcomes: balancing risk or expanding risk. Generally, alternative investment strategies can be used to manage risks. However, some alternatives can bring higher returns to investment products, which is very dangerous.

This is a fact. Then these purchases are more profitable. risk investment What do people think of products? That's exactly what we want to know from the 40 largest Fortune Management Inc this year.

The continuous expansion of stock exposure is the core issue. A year ago, Fortune Management Inc began to recommend investors to buy blue chips. There was no debt crisis at that time. The reason for this is because of the desire for more risky investments. Taking into account the frustrating rate of return and possible rising interest rates, they began investing in large companies offering dividends, and most of the stocks they bought were defensive. Now, however, the difference is that optimism is not confined to big cap stocks, but the 40 largest Fortune Management Inc are investing in various stocks.

Chris Hyzy, chief investment officer of the US trust, said: "for the more risky investments, the first stage is due to concerns about rising interest rates. Now it has entered the second stage. We have more solid reasons to increase risks."

A recent cover article in balun Weekly reported that the European economy is recovering, and the market in developed countries is improving. The assets of these countries are in good condition, and stock pricing is also very attractive.

After years of separation, the focus of global investment is again concentrated in the European, British and Japanese markets. Although Europe's GDP growth rate is still negative, it can not hide the fact that the second quarter growth is far better than expected. European stock markets have started to rise. In the past year, the MSCI Europe index has risen by 21%, but it is still 10% lower than the highest in 2007. The stock price of European enterprises is underestimated anyway.

Hans Olsen, chief investment officer of Barclays Fortune Management Inc, said: "generally speaking, European stocks will be sold at a discount compared with American stocks, but the discount rate is much lower now. It may be too early to say that the European economy is healthy, but I would rather start early."

Scott Clemons, chief investment strategist of Brown Brothers Harriman Ltd, said: "obviously, people's attention to Europe is changing from macro to micro. Maybe the macro situation is not good, but if you are specific to a European company, you can always find a bright spot."

Of the ten overseas stocks held by Brown Brothers Harriman Ltd, the company has more than half of its revenue from its domestic market, with a P / E ratio of only 10 and a dividend yield of 4.2%.

Goldman Sachs has been strong in Spanish Company's stock market, and even in many stock valuations rising rapidly. Sharmin Mossavar-Rahmani, chief investment officer of private wealth management at Goldman Sachs, said: "we like to buy European stocks, especially in Spain, where structural reforms are effective."

Despite starting to build stocks in Europe, Geoff, Vee Nigel, a senior investment analyst at private bank in Montreal, said that he should be careful in dealing with exchange rate risks. He said: "after a year of strength against the dollar, the euro will be self correcting at some point, and you will never want to lose anything because of the depreciation of the euro."

Investing in the Japanese market also needs to be careful about the exchange rate. For the first time in many years, many fund managers suggested buying shares of Japanese companies. They believed that Abe Shinzo's reforms could stimulate the long-term economic growth. The second quarter GDP growth rate of 3.8% is equally encouraging. "Exports begin to grow and profits begin to materialize," said Olsen. "If we deal with the problems of exchange rate and labor market, Japanese enterprises will have a lot of room for profit growth."

However, he said he must pay attention to exchange rate risk. The MSCI Japan index surged 17% between April 2nd and May 21st, but the fund companies and ETFs that hedged the yen risk were the biggest winners. The iShares MSCI Japan ETF did not adopt a hedging strategy. During this period, the yield was only 17%, and in the last four quarters it rose by only 21%. However, the DBX Strategic Advisors fund's MSCI Japan Hedged Equity fund rose by 26% over the past 45% days, up 45% in June.

As for emerging markets, fund managers spent a year building positions in 2012, and in the end they were worried about the economic slowdown. MSCI Emerging Market index fell 4% this year, but some fund managers still have confidence in emerging markets. They think it is a good time to buy these market shares because they are cheap.

Leo Grohowski, chief investment officer of New York Mellon Fortune Management Inc, said: "the MSCI Emerging Markets index has a P / E ratio of only 11, while standard & Poor's 500 has 15, so I think it's a good opportunity to enter the market."

But a better investment in emerging market equities cannot simply refer to indices. Chris Wolfe, chief investment officer of the Merrill Lynch group's wealth management division, said: "the reason for investing in China's stock market is that after that growth, we should be more active in emerging markets, not just focus on stock index. Now we should choose opportunities by region or enterprise alone."

Of course, goods are always better than three. Wilmington Trust's Rex Macey said: "emerging markets will still rise in the future, but now there are more opportunities in developed countries."

The Wolfe of Merrill Lynch has attracted our attention. He said there are many opportunities in some of the more marginal markets. The capital system of these countries is still in the embryonic stage, such as Bangladesh, Lithuania and Albania, which are at least 15 years later than the development level of the emerging market economy. With the growth of the global economy, most of these markets will benefit.

Why is this happening? China's manufacturing capacity is shifting to other Asian countries due to wage increases and other factors, and it also increases investment expectations of Mara Thea, Vietnam, Indonesia and Philippines. "These countries have made great progress, but they still need time," Wolfe said. The investment there is unlikely to get short-term returns. This is a long-term plan. It may be full of variables, but opportunities are limitless.

In addition to investing in stocks, rich investors are more interested in alternative investments. The Northern Trust Company conducted a survey of 1700 wealthy Americans. The results show that more than half of them consider taking higher risks. They are more interested in alternative investments than before 2008.

Fund managers have many ideas, some of which involve high-risk areas. Bill Stone, chief investment officer of PNC asset management group, said he took advantage of absolute return to return the fixed income strategy and hedged interest rate risk through BlackRock Strategic Income Opportunities, Pimco Unconstrained Bond fund and Driehaus Active fund three funds.

These funds are all guaranteed investment products. In order to achieve their goals, they will also buy high-yield credit products and financial derivatives. These are the products that led to the collapse of the financial system in 2008, or almost collapse.

Many fund managers continue to expand private placement. stock right This trend has lasted for a year and has recently increased investment in hedge funds. Joe Kenney, director of investment management at JP Morgan chase, said: "investors have abandoned liquidity, but as interest rates rise, bond prices will fall, and hedge funds will generate positive returns."