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Looking at Active Investing in a New Way



In volatile bear markets, there’s not much glory to be had in sensible index fund investing. No one likes reporting quarterly losses and “stay-the-course” strategies to clients when those same clients are hearing stories of their untrained day trading friends making a killing in the very same market.

Pro investors and clients are also giving more credence to the market’s new normal. Buy-and-hold is a universal principle, but to most people, accessibility equals activity. No one wants to be “Washed Up Warren” selling at the bottom of the airline crash when literally anybody can start a Robinhood account and range trade American Airlines (NASDAQ: AAL) for ultra-quick profits.

To be sure, seasoned investors know that unprofessional active investing turns out bad for most people. Your client’s friends are only reporting the victories to your client, not the losses. Yes, Buffett sold at the bottom of the airlines, but he also made $11 billion in Apple just this year ($47 billion in total). As much sense as the index fund still makes, waiting is still a hard argument to make in the face of FOMO. (You spent years unlearning the fear of missing out; you can’t expect your clients to exorcise it from themselves just because you said so!)

Plus, the client is always right. As a financial advisor, your real job is giving your clients peace of mind with their money. We’re in the Millennial Money generation — the way you make your clients money is just as important as actually making it (hint: impact investing).

We must also take our share of the blame. Passive investing based around index funds looked great over the past 12 years, the longest bull market in history. We are not in that market any more. Proactive investing may be making a comeback for a very good reason — investment strategies must change when the underlying market conditions change.

How Financial Advisors Can Help Investors Who Want to “Do Something Different”

Investment strategies invariably match the lifestyles of the investors, and today’s investment lifestyle is global and diverse. Digital nomads are making good money through virtual offices while traveling the world. Retail traders are moving seamlessly between currencies and cryptocurrencies at will. Savers now have the choice of putting their money directly into foreign banks for higher interest rates without leaving the comfort of home. It makes sense that these investors would want a bit more activity from the financial advisors they choose.


Attribution: Fshoq

Even those living more traditional lifestyles are using the expanded access they have to the markets. Mobile trading app Robinhood (which always seems to be the metric for Millennial Money talk) grew to more than 10 million accounts by the end of 2019. The app now has around 50% of the merged 24 million Charles Schwab/TD Ameritrade client base in less than 7 years of operation.

“A good advisor will also provide planning, tax and other advice,” says Charles Lewis Sizemore, chief investment officer at Sizemore Capital Management. “They can also provide access to strategies that are a little harder to replicate or that haven’t been turned into off-the-shelf commoditized index products.”

To serve this audience is also to help them expand upon their personal knowledge of the market and safely expose them to more exotic investment strategies.

“If a client feels like they have the ‘beta’ component of their portfolio handled, then you can still add value by complementing the core of their portfolio with more aggressive satellite positions or alternative strategies,” says Sizemore. “In my practice, we regularly invest clients in more exotic assets such as put writing strategies, medical accounts receivable and long/short strategies.”

How AI Can Help

Keeping up with a digitally savvy investor means holding an expertise in how artificial intelligence (AI) can help the bottom line. Until someone masters artificial feelings, we can definitely use our robot class to achieve the idyllic emotionless investing we all strive for. A computer’s cold objectivity gives us the opportunity to make better decisions all-around. Plus, we finally don’t have to do all that math.

“We all have ideas about what we could get done, and practices we would put into place — if we had the time,” says Yewno CEO Ruggero Gramatica. “AI gives you the opportunity to automate some of the minutiae of collecting and processing information so that you can get to what really matters — testing new strategies, exploring indirect connections within your portfolio or determining exposure to concepts as they develop.”

Here are just a few of the ways that AI can help active investment strategies:

  • Financial literacy: AI can serve as an investment conscience, showing an alert when an investor participates in a risky trade or targeted behavior.
  • Financial planning: A computer’s long memory can remind an investor of long term goals and support goal based planning.
  • Managing the mundane: Robotic process automation can ensure error free processes, freeing an investor’s time to strategize higher value investment activities.
  • Client interaction: Virtual assistants and chatbots can handle many customer service calls, freeing an advisor’s time. A surprising percentage of people actually prefer chatting with a robot rather than a human.
  • Continuous analysis: Advanced machine learning algorithms learn in real time how to invest and manage a portfolio based on the standards of the investor.

Keep in mind that AI does not replace human interaction, sophisticated analysis or business intelligence, and it won’t for quite some time, if ever. AI can expand the scope and scale of advisory services and make sure that all strategies are appropriately and thoroughly vetted before execution.

Types of Active Investing Financial Advisors Can Offer

Armed with AI and a new perspective on the modern investor, the savvy advisor will be able to incorporate many new types of active investing into strategies.

Attribution: Pixabay

Stock Picking

Stock picking in an active investment strategy does not necessarily equate to picking great companies. Short sellers are actively looking for overvalued companies to exploit bloated P/E ratios and faulty forward guidance statements. Once an advisor understands the purpose of a portfolio, he can begin to actively recommend stocks to fit the strategy.

An active stock picking strategy likely involves frequent rebalancing. Advisors can help investors stay appropriately balanced without overtrading.


Another type of active investing involves buying and selling securities and derivatives around a core portfolio. The core portfolio serves as risk protection for the derivative trades. The active trading is usually meant to pursue alpha while the core holdings follow market returns.

Swing Trading

Swing trading is based on mastering stock entry and exit points. Swing traders are more concerned with technical analysis than a company’s fundamentals, and will often make trades into businesses that are objectively struggling — even businesses that are in open bankruptcy.

The volatility of the modern market means that stock prices will deviate from company value more frequently. As buyers and sellers argue over what the correct price is, the swing trader swoops in, uncaring, and skims off the top.

Volatility Investing

For investors who find no luck guessing a stock’s direction, volatility can be another way to profit. Volatility plays are often directionless, involving a purchase on the long and short side of a security.

Volatility investing is best done through options, derivatives that are created specifically to capture and quantify volatility. However, options bring with them a unique set of behaviors and characteristics that the average investor may not understand. The computers will do the math, so you don’t have to teach that — but teaching your investors about the Greeks (all of them, minor Greeks included) is essential.

High-Frequency Trading (HFT)

If your client has a technological advantage and understands the intricacies of making a market, HFT can be a very profitable way to actively invest. Understanding software latency and market inefficiencies are more important here than knowing whether a company will meet its Q2 revenues.

The proliferation of trading technology has given investors outside of the elite hedge fund community an opportunity for HFT. With the right advice about the core of market operations, you could expand these efforts.

Platforms to Guide Financial Advisors

Who’s going to advise the advisor? There are actually many platforms dedicated to supporting you as you support your clients.

Attribution: Flickr

Yewno | Edge

If you’re looking to ruthlessly cut the noise away from investment research, Yewno specializes in focusing on the most relevant institutional level data. You get access to firsthand news and analysis sources in real time and automated anomaly detection. Your clients benefit from the inside analytical track that will help you more accurately connect the dots between market events and suggested investment concepts. Artificial intelligence processing builds a portfolio around your ideas, including blockchain and cloud computing portfolios. “Using Yewno | Edge helps me to research trading opportunities and it allows me to search fast and efficiently,” says Andrew Roderick, CEO of Credit Repair Companies.


MoneyGuidePro has been a financial planning software market share leader for decades. Since 2001, it has succeeded through an intuitive user interface and portfolio gamification (the Play Zone). Clients can experiment with ideas while advisors retain control of the environment, giving a client the ability for guided speculation without using real money. MoneyGuidePro also integrates easily with more than 40 third-party financial programs.


Although RightCapital is a relatively new product, it has quickly impressed advisors looking for a comprehensive platform with a balance between automation and customization. Advisors can easily create engaging visuals for clients, which works well for budgeting multiple portfolios.

Black Diamond

Black Diamond is a desktop and mobile portfolio management platform based in the cloud. Advisors get easy access to customized reports, daily account reconciliation, secure messaging and consolidated information layouts. Active investors will enjoy a personal connection to their advisor that otherwise tends to get lost in the digital realm.


WealthTrace is known as a platform for personal investing strategies — retirement, college savings, first house — but it adds an intuitive scenario function so investors and advisors can see how plans play out in adverse market conditions. In terms of personal finance advising, WealthTrace is perhaps the most comprehensive platform. It leaves no stone unturned when formulating its life scenarios. Everything from life insurance to retirement nest egg goals are factored in.

Look at Active Investing in a New Way

Traditional wisdom sees active investing as dangerous and ultimately less profitable than more passive strategies. With new technologies and processes available to us, that doesn’t have to be the case.

In most cases, it’s not an advisor’s job to determine an investor’s philosophy. An advisor guides an investor safely to a financial destination while accounting for and using an investor’s philosophy. The advisor, in a way, must be a jack of all trades. It helps to have a bevy of tools to help guide the guide.

“All investing is active,” says Phil Kernen, Mitchcap portfolio manager. “We believe the best investing happens when advisors and their clients acknowledge that investing mandates a cycle of active decisions.”

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© 2020 Benzinga does not provide investment advice. All rights reserved.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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