Littleton, Colorado, August 3, 2021 /PRNewswire-PRNewswire/ – The National Association of Active Investment Managers (NAAIM) has appointed CFA and Slingshot Financial founder Garrett H Brookes as the winner of its annual white paper contest NAAIM Founders Award.Brooks received 5,000 USD Active/passive hybrid based on liquidity premium: a practical study, and his paper will be presented at the association’s conference Outlook meeting exist Chicago, October 11-12, 2021.
“Active and passive investment methods are often either-or choices,” Brooks explained. “I believe they belong to a portfolio. Sometimes passive will outperform the market, and sometimes the risk level of the market is worth taking a proactive approach. My focus is to provide an easy-to-understand and easy-to-implement framework to mix passive and actively improve risk-adjusted returns. .”
Active/passive hybrids are designed for asset accumulation investment portfolios in which investors will make regular contributions. Passive positions are invested in equal weighted S&P 500 index exchange-traded funds (ETFs). Active positions use capital-weighted S&P 500 ETFs and money market funds.
In order to identify the risk period and the risk period of the market, Brooks used the liquidity premium generated by the spread between the 10-year and 3-month securities of U.S. Treasuries. Since greed controls investor sentiment, the yield curve tends to appear later in the business cycle. When there is fear in the market, there is usually a steeper yield curve.
Among Warren Buffett’s The most frequently cited investment advice is “fear when others are greedy, and greedy when others are fearful.” Using a liquidity premium provides a quantification…