Altegris

With $2.6 trillion in assets under management, private equity has long been a core investment strategy for institutional investors across the globe.1 In fact, endowments alone have allocated ~21% of their portfolio to private equity investments.2 For many individual investors, however, private equity has historically been difficult to access and even more difficult to build a well diversified portfolio. Our belief is that one’s net worth should not dictate the availability or quality of investment options.

It is once again time to put down in print in one place some pretty specific speculations on what could happen next year. We do this every year with the intent of trying to get investors to think about what could happen and factor that into their decisions on how to adjust their portfolios to take advantage of opportunities while at the same time being aware of the risks.

Mark Melin, writing for ValueWalk, picked out some of the points in our Altegris Perspectives piece, ?What to Expect in 2015??. Mark asked some questions expanding on topics scattered throughout the piece, specifically relating to Managed Futures and the persistence of dispersion; Quantitative Easing (QE) and the lack of continuing discussion about it; and Volatility and its impact on relative values.

At a time when many investors are seeking income for their portfolios, traditional sources of fixed income - principally government bonds and high-grade corporate bonds - look less than compelling. Yields are low and there is an increasing risk that interest rates will rise, which would cause the value of existing bonds to fall.

Each year, I take Alfred Lord Tennysons advice and "ring out the old, ring in the new" by creating a list of expectations about the markets. My list involves events that the average investor thinks have only a one-in-three-chance of happening, but which I believe have more than a 50% chance of occurring. If this approach sounds familiar, it should. Its modeled after Byron Wiens annual list of "surprises." Like his, my expectations are designed to provoke thought and discussion.

Decisive actions by central bankers altered the course of global markets in the third quarter of 2012 at least temporarily.