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UBS’s Flawed Yield Enhancement Strategy (YES)

The so-called  “Yield Enhancement Strategy,”  or “YES,” has seen a major rise in popularity at large investment firms, especially UBS,  as a vehicle for investors  to “enhance” returns relatively safely.  “YES” has been pitched as a relatively safe way to generate enhanced returns on a consistent basis, especially when markets are flat.   Fairly stable markets have been norm for many years, until recently, making  this approach attractive  to many  investors.  However, because of this historic stability,  the inherent risks of the investment have not been widely known to investors.

As a result, because “YES” relies on stability in the market place,  when significant volatility does hit, as it has at various times in the last 18 months, particularly last December, it can cause major losses to unsuspecting investors who were not prepared for them.

The “YES” Strategy is not only risky, but exceedingly complicated, involving an exotic options play, which is difficult for all but the most sophisticated investors to understand.  YES is only appropriate for the most experienced and sophisticated investors, those with a high risk tolerance and who understand options strategies, and only when accompanied with proper and specific disclosure of all the underlying risks.  Unfortunately, it appears that this product may have been sold to many investors without proper risk disclosure who did not meet the above criteria.

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The post UBS’s Flawed Yield Enhancement Strategy (YES) appeared first on Securities Fraud Attorney Blog.

from Investment Fraud News https://www.securitiesfraudattorneyblog.com/ubss-flawed-yield-enhancement-strategy-yes/

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Investing for Retirement: Beware the Unicorn IPO Stampede

Many of today's unicorns have strong growth prospects, but they often have uncertain paths to profitability.  from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/26/investing-for-retirement-beware-the-unicorn-ipo-stampede/

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Investments That Ride a Generational Wave

“People tend to think rules don’t change, but in financials, they’ve clearly evolved,” says Thomas J. Lee, CFA. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/21/investments-that-ride-a-generational-wave/

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The Discovering Markets Hypothesis (DMH)

Thomas Mayer, CFA. PhD, introduces the Discovering Markets Hypothesis (DMH), which he developed with Marius Kleinheyer. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/20/the-discovering-markets-hypothesis-dmh/

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Rise of the Machines: Investment Jobs Now Redundant?

Will computers completely replace humans in financial management? from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/18/rise-of-the-machines-investment-jobs-now-redundant/

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The NIFTY 50 No Longer Reflects the Indian Economy

Why do the benchmark indices in India and the United States display completely opposite trends relative to GDP growth and what implications does that have for investors? from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/15/the-nifty-50-no-longer-reflects-the-indian-economy/

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Book Review: Getting Back to Business

Getting Back to Business challenges the premises and prescriptions of modern portfolio theory (MPT) and offers an alternative investment approach. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/15/book-review-getting-back-to-business/

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GARP Investing: Golden or Garbage?

Do Growth at a Reasonable Price (GARP) strategies offer an attractive middle ground between Value and Growth? from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/11/garp-investing-golden-or-garbage/

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Fearless Female Pioneers at the Financial Analysts Journal

What do the Financial Analysts Journal, CFA Society New York, the Columbia University Graduate School of Journalism, and US railroads have in common? Female pioneers. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/08/fearless-female-pioneers-at-the-financial-analysts-journal/

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Women and Finance: Five Trends to Celebrate

To mark International Women's Day, Barbara Stewart, CFA, finds reason to celebrate. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/08/women-and-finance-five-trends-to-celebrate/

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Nouriel Roubini: The Mother and Father of All Bubbles

True to his Dr. Doom moniker, Nouriel Roubini believes that vulnerabilities in the system are currently hidden and will emerge when the next economic downturn occurs. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/06/nouriel-roubini-on-shitcoin-the-mother-and-father-of-all-bubbles/

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10 Rules for Forecasting

Joachim Klement, CFA, has created his own set of rules to use as guidance when forecasting economic or political events. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/03/04/10-rules-for-forecasting/

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Aswath Damodaran on Acquisitions: Just Say No

Aswath Damodaran has a blunt message for companies considering an acquisition: "Don't do it." from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/02/28/aswath-damodaran-on-acquisitions-just-say-no/

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Fixed-Income ETFs: A Rising Tide?

State Street's Bill Ahmuty shares his perspective on the rise of fixed-income exchange-traded funds (ETFs) in an interview with Dan O'Connor, CAIA. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/02/28/fixed-income-etfs-a-rising-tide/

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Paul Volcker on Conflicts, Ethics, and the US Banking Industry

Paul Volcker considers the state of banking today in an interview with Exile on Wall Street author Mike Mayo, CFA. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/02/25/paul-volcker-on-conflicts-ethics-and-the-us-banking-industry/

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Option-Implied Skewness and the Momentum Anomaly

What information does option-implied skewness contain, and how is it related to the momentum anomaly? from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/02/22/option-implied-skewness-and-the-momentum-anomaly/

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Howard Marks, CFA: Getting the Odds on Your Side

What are two of the most important things an investor needs to do to succeed? Howard Marks, CFA, offered his perspective. from Investment Fraud News https://blogs.cfainstitute.org/investor/2019/02/19/howard-marks-cfa-getting-the-odds-on-your-side/