Perspectives

Advice to the Advisors

Sheaff Brock Institutional Group | Option Overlays may be Misunderstood

Diversifying Income Sources with Option Overlay Strategies

In a 2010 Songfacts interview, rock songwriter Eric Burdon complained that he’d really been misunderstood: “by my mom, my dad, school teachers, a couple of the women that I married. I’ve been misunderstood all of my life.”In a 2010 Songfacts interview rock songwriter Eric Burdon complained that he’d really been misunderstood: “by my mom, my dad, school teachers, a couple of the women that I married. I’ve been misunderstood all of my life.” Options, Sheaff Brock Managing Director Dave Gilreath laments, [...]

Advice to the Advisors

Sheaff Brock Investment Advisors | compliance, operations, financial planning, portfolio management & trading, sales & marketing and more

Outsourcing may be Key to Your Growth as an Advisor

Since, in the volatile market environment of this decade, it’s much more difficult to add value in the investment management area than it was during the previous 20 years, as thewealthadvisor.com points out, it may make sense for advisors who are pressed for time and want to focus on their core competencies to consider outsourcing options. At Sheaff Brock, we’ve found that very truth to be self-evident. Advisors with an orientation towards practice growth must keep time free for community [...]

Advice to the Advisors

Sheaff Brock Institutional Group | Investment portfolios | Preferred Income Portfolio | portfolio workhorse

Harnessing Twin Risks can Turn Preferreds into Portfolio Workhorses

In any income portfolio, two “bug-a-boos” are credit risk and call risk. When it comes to preferred stocks, interest-yield-hungry investors tend to over-emphasize the former, even as they devote less than due attention to the latter, observes Sheaff Brock Senior Portfolio Manager JR Humphreys. “Investors in search of solid income from their portfolios often select preferred stocks rather than Treasury securities or ETFs based on Treasury bonds. One reason behind this decision is that preferred stocks generally pay dividends of [...]

Advice to the Advisors

Sheaff Brock | Preferred Stock portfolio strategy | cat between dogs

There’s a Method to Dealing with Preferreds

Think of preferred stock as “middlers,” Sheaff Brock Senior Portfolio Manager JR Humphreys advises. Preferred stocks are income enhancers, yes, but they may have a higher return potential than bonds. At the same time, preferreds don’t act like other stocks, and, in fact, can carry less risk than their common cousins. In speaking with our Institutional editor, Humphreys outlined the five basic considerations he uses in the selection process when building a preferred portfolio: Liquidity—Many preferred issues are small, making [...]

Advice to the Advisors

Sheaff Brock Institutional Group | REITs investing | real estate income and growth portfolio

Why the Timing’s so Right for REITs

There’s nothing “new” about Real Estate Investment Trusts, companies that own and manage income-producing real estate. In fact, REITs came on the scene more than sixty years ago and have increased in popularity with income-seeking investors. Since, by law, REITs are required to maintain dividend payout ratios of at least 90%, the dividend yield can represent a strong advantage over both equities and bonds. Investing in REITs also offers simplified tax treatment as compared with direct ownership of income-producing [...]

Advice to the Advisors

Sheaff Brock Investment Advisors | Risk Management for Performance Outcomes

Risk Management as Important as Return on Investment

You might say risk management is even more important than return, asserts Sheaff Brock Managing Director Dave Gilreath. In the long run, he believes, risk management can lead to good investment outcomes. And, while nonprofessionals invariably focus on return, expecting their advisors to “beat the market,” that expectation, he feels, is essentially flawed. As a recent BlackRock study on market upside/downside demonstrates, “the preponderance of evidence suggests that market timing is difficult and rarely adds value.” Instead, emphasizing “low capture [...]

Advice to the Advisors

Sheaff Brock RIA partner investment business performance and growth

Outsourcing Portfolio Management—A Partner, Not a Product

As a Registered Investment Advisor, you’re dedicated to growing and preserving your clients’ wealth, helping them protect their families, and define their goals. Simultaneously, of course, you’re dealing with all the nuances of running a business and of meaningfully participating in your community. As Tevye observed in Fiddler on the Roof, “It isn’t easy…” In many areas of life, even people accomplished in their fields leverage the additional knowledge and skills of others—as valued coaches, consultants, and advisors. At Sheaff [...]

Advice to the Advisors

sheaff brock investment advisors dave gilreath downside risk protection investment risk measurement

Downside Protection in an Equity Portfolio

“Downside risk is an estimation of a security’s potential to suffer a decline in value if the market conditions change,” is the way Investopedia.com explains what no investor wants—the chance to lose money. “In general,” Investopedia authors observe, “many investments that have a greater potential for downside risk also have an increased potential for positive rewards.” In an interview with our Institutional editor, Managing Director Dave Gilreath explained key risk management tactics employed by the firm’s portfolio managers. In fact, [...]

Advice to the Advisors

Sheaff Brock Institutional Group put options index income portfolio strategy investments

With Put Options, Portfolio Strategy is of Premium Importance

While put option buyers are interested in insuring their risk, put option sellers (also called put writers) are willing to take on that risk in exchange for additional portfolio income, explains Dave Gilreath, Sheaff Brock Managing Director. That income takes the form of premiums paid by the put buyer to the put seller. Put writing is a strategy whereby an investor writes a contract, selling that contract to a buyer. The contract obligates the put seller to buy shares at [...]

Advice to the Advisors

Sheaff Brock portfolio management fundamental research and analysis

Managing Portfolios with Fundamental Analysis

While technical analysts look for general stock movement patterns, fundamentalists look at individual companies, examining the earning potential and value of each stock. A corporation’s earnings, expenses, assets, and liabilities are all important factors, and fundamental analysts are looking for shares that may be undervalued at the present time by the investor community. There are two categories of fundamentalist buyers, Sheaff Brock Managing Director Dave Gilreath explained in an interview with our Institutional editor: 1. The value fundamentalist looks at price-to-book, [...]