I'm sure I'm not alone here: The older I get, the less of a risk taker I become. I look back at things I did 10 or 20 years ago and am in awe of my younger self! I was brave and bold - and in some cases downright reckless - in ways I cannot fathom today.

Part of it is that as we age and gain more experience, we become more aware of danger and consequence. I see this happening already in my sons. At age 2, my eldest just barely made the height requirement to ride the kiddie roller coaster at a local amusement park, yet he boarded it without fear, as if he'd ridden it 100 times before. I was white-knuckled the whole ride, while beside me he just laughed. A year later, though, at the wise old age of 3, he took one look at that roller coaster and gave it a hard pass. Way too scary, now that he had a slightly better sense of what was at stake.

Part of it, too, is the burden of responsibility. I'm a wife, a mother, and a breadwinner. These roles define me in ways the younger me could only dream of. When I take risks now, I in turn put my family at risk, financially or otherwise.

So I'll admit I don't take a lot of risks these days, investments included. Not long ago, my husband and I bit our nails over the purchase of a bitcoin. A single bitcoin. We didn't want to risk missing out on the ride, but I imagine 20 years ago we would have just jumped right on that roller coaster with our hands in the air.

Certainly, there's plenty for investors to be nervous about right now. As Regraded Solutions wrote recently:

Nobody knows if the recent turbulence will last. Thus far, over the past 7-8 years, the markets have bounced back and gone even higher. If that happens once again, great, no harm no foul. The point is to be prepared for the WORST and hope for the best. Do your homework, and know why you are invested, as well as your tolerance for risk.

My tolerance for risk might be particularly low right now due to the fact that I have young children and am in the process of buying a new house (both risks in their own right, really). But I suspect I'm not alone in terms of my overall tolerance for risk decreasing as I age - not to mention as an eight-year stretch of market gains can feel like a correction is due at any time.

With this in mind, I asked several of our authors to respond to the following question for this week's Digest:

What, if any, investment risks are you taking right now?

Here's what they had to say:

The markets have been a little volatile recently. While that is nothing unusual, investors have become a bit complacent due to lack of volatility in the last year or so. On the other hand, in spite of the fact that the economy has been chugging along, there has been a constant fear that the bull market is long in the teeth and valuations have become pricey, so we might see some level of correction in the near future. The next bear market may happen next month or may not occur for the next two years; we do not know.

That said, I believe in a few key principles, the primary one being "strategic diversification" in the form of a pyramid. The base is formed of long-term DGI (dividend growth investing) holdings. The middle piece is a risk-adjusted income-focused portfolio, and the top could be formed from alternative assets or growth/speculative investments depending on ones risk profile. We wrote an article last week that fits into the top piece of the pyramid for income-seeking investors.

The second key principle is "systematic investing." Once a system has been put in place after carefully examining the goals and risk-tolerance, we need not worry about day-to-day gyrations and follow the system diligently without fear and emotions. In the long run, the majority of profits go to people who set their paths and walk on them. Nobody gets to the destination by standing still. As the old Wall Street saying Bulls make money, bears make money, pigs get slaughtered goes, the systematic investing approach helps overcome the excessive greed or impatience.

To be more specific, in our DGI allocation, we are not initiating new positions right now because of high valuations for almost everything. But instead, we are selling put options for the stocks that we want to have and at strike-prices that are 10-15% below the current levels. However, one needs to be careful that these are the companies that you want to own long-term, and their share price may have come down temporarily. Some recent such examples are Verizon (VZ), AT&T (T) , Realty Income (O), Altria (MO), Exxon Mobil (XOM) and Omega Healthcare (OHI). Either way, we wont lose. If the stock falls in the next 4-6 months, we will own it for the attractive dividend, which will be 10-15% higher than todays yield. If not, we will at least earn income in the range of 5-7% on our idle cash. We described this strategy in one of our recent articles.

For any investor with an equity-income dominated portfolio, simply holding richly valued, low-yield dividend-growth-slowing stocks in todays market appears less favorable from a historical risk/rewards perspective. While this does not mean that a harsh wholesale selloff is necessarily in the offing, it does mean that forward total return and dividend growth expectations should be severely tempered. Portfolio performance weve seen over the past 8 years will not sustain itself the next 8 years.

My somewhat muted returns prediction also assumes the macroeconomic backdrop remains tame, which, at this juncture, may be an optimistic view. Investors may be underestimating the domestic impact that unfunded public pension liabilities and health care dispensary issues may have on John Q. Public and collectively, Main Street America.

Indeed, the stagnation and squeezing of the middle class continues, which arguably led to the election of Donald Trump, which currently is leading to rising social discontent. Socio-political/philosophical division, while something our nation has always contended with, appears more threatening than any time in recent memory. Geopolitical risk, primarily from North Korea, is a factor investors should consider.

Further, despite the fact markets are trading at all-time highs, dividend investors continue to witness rolling corrections in the equity/economic realm. Over the past five years income-producing fossil fuel and retail stocks have been rocked by commodity price and e-commerce threat, respectively. Given the rapidity of technological advance and increasing competition in the marketplace, further disruptively-inspired corrections both of individual-equity- and market-sector-ilk should be anticipated.

On a personal level, while I havent been allocating meaningful new capital to stocks as of late, I continue to approach income portfolio construction with the belief that interest rates will remain low and somewhat non-volatile. That is certainly a big risk, assuming neither of those things occur. To leverage that belief I continue to hold and trade some of the UBS 2X ETN products, including MORL (Mortgage Reits) and CEFL (Closed-end funds), which yield in the neighborhood of 20 percent. Caveat emptor.

Im also overweighting equity REITs, but not to the extent I was last year. As I noted in a recent article, I see the foundation cracking a bit there. Largest positions are STORE Capital (STOR), which is extremely rate sensitive and Mid-America Apartment Communities (MAA) an apartment landlord primarily in the Sunbelt region.

Elsewhere, I have made oversized commitment to green energy over the past few years, with large positions in Pattern Energy (PEGI) and NRG Yield (NYLD), currently yielding 6.8% and 6.1%, respectively.

Finally, I would note heavy allocation to technology. While the majority of that is held in large caps like Apple and Microsoft, which arent generally considered risky, Im also taking some chances on some smaller dividend payers like Silicon Motion (SIMO) and Cypress (CY), which are.

One beaten-up and underperforming area of the market where we are starting to see attractive risk-versus-reward opportunities is real estate investment trusts (REITs). For example, as the Death of Retail narrative grows to a louder chorus, we think there will be clear winners and losers within both the retail REIT space (e.g. we like some of the higher-quality shopping mall owners), and the industrial REIT space (e.g. we like some of the industrial REITs serving both traditional customers and e-fulfillment businesses). Further still, we also like some of the data center REITs on pullbacks.

Regarding shopping mall REITs, we like quality. That doesnt necessarily mean only the tier 1 properties with the highest rents, but also some of the tier 2 properties that have sold off but are still not overextended in terms of their debt loads relative to their funds from operations. As members of our marketplace service (The Value & Income Forum) know, weve had some recent success generating attractive income by selling put options on Simon Property Group (SPG), which is one of the higher quality ample-cash-flow retail REITs that we wouldnt mind owning at an even lower price if the shares were to get put to us. Also, we have an interesting view on another retail REIT, Washington Prime Group (WPG) (members-only article: Washington Prime: 12% Yield and The Death of Retail).

Regarding industrial REITs, the space remains strong according to the SIOR Commercial Real Estate Index, but several of the names in this space have underperformed, offer attractive valuations, and have compelling dividend yields. For example, we believe Gramercy Property Trust (GPT) is worth considering, and we recently explained why in this members-only article: Gramercy Yields 5.0%: Buy This Dip or Abandon Ship? Also interesting, some of the industrial REITs will continue to benefit by providing facilities for online retailers, an area of the market that continues to grow, as shown in the following chart.

Regarding data center REITs, this is an area that continues to experience tremendous growth as companies continue to move data to the cloud. Data center REIT dividend yields tend not to be quite as high as many of the retail and industrial REITs, and they are also more volatile. However, the higher volatility makes for more attractive income-generating premium on put option sales. For example, weve recently generated attractive income selling put options on Digital Realty Trust (DLR), an impressive growth company, that will eventually mature into a higher dividend payer, and that we wouldnt mind owning on a pullback if the shares were to get put to us.

Overall, they say the biggest risk is not taking any risk at all. There is a lot of truth to that, but investors should still work to cater their risk exposures to meet their own individual needs. They should also work to take advantage of the current opportunities that the market is providing, rather than trying to force something that is better suited for a different market environment.

In a previous article, I discuss uncompensated risk and its implications for the dividend investor. I went into some depth about why we shouldn't necessarily shy away from risk, as that very act of taking risk can result in outperformance. In addition, I also went over how simply going long the S&P 500 with your entire portfolio exposes you to "uncompensated risk" - being overweight U.S. equities is an active investment stance compared to the only truly passive investment of long MSCI Global or some equivalent worldwide index. However, what I didn't discuss was my own portfolio. At the moment, I'm heavily overweight Europe and Canada relative to the U.S., and this is because of my belief in continued Chinese economic performance. Convoluted, yes, but I will explain.

Recent European outperformance has created a strong tailwind for companies with lots of business locally, and while the euro has been strengthening lately, the world economy is still growing fast enough to support companies with some exports. As such, one of my largest positions is in BMW (traded on the German exchange, not the U.S. OTC ones). The continuing strength of the Chinese economy (one of BMW's largest markets), for the next 2 or 3 years, will support German automobile growth in the mid-term. Again, local European growth will also help tremendously.

I'm also long Canada generally (through REITs, banks, telecoms, and insurance companies). As mentioned, I expect Chinese growth to continue, and this growth will prop up commodity prices - not as much as it has in the past, but enough to drive up Canadian economic growth past what most experts are predicting.

We are in a bit of a different position than most. My wife is 9 months from graduation from Law School and we're currently looking to purchase a new home, so we've been looking to conserve cash, work through the next year and then re-evaluate.

We are still making our investments into our retirement accounts on a regular basis. My 401K has a 55/45 split between bonds and equities. The idea behind the portfolio is to work towards market performance but without the risks associated with being in an all equity portfolio.

In our taxable investment account we did sell Avista on news of the future all cash merger. The funds from that sale were moved to Dominion Resources (D) and Starbucks (SBUX). The total income increased by just over 19% and the overall quality of the portfolio increased with this move. Any funds added in the next year will have a focus on quality versus trading off quality for increased current income.

Our family does have one small position left in Avista (AVA) that we will be selling at some point in the next few months. Right now our thought is to let the market settle a bit. My best guess there is that we'll do with it what we did with the other stakes and add a bit of income while increasing the quality of the portfolio as a whole.

Our broader stance is that risk is actually not a bad thing, as long as it is diversified. With greater risk come the greater potential for rewards, and those rewards can help to keep you solvent when markets become unpredictable. There are some differences that should be considered as far as age demographics are concerned. Older investors with a larger nest egg might not see the need to enhance risk exposure because there is less incentive to generate substantial returns when you have already done the work to accumulate savings over time.

That said, we believe that the market as a whole is vulnerable to growing risk levels. Stock markets that continue to hold at all-time highs could be vulnerable to rising market volatility if global interest rate levels start changing as widespread growth begins to stall. Currently, we are looking at positions that should benefit from rising oil prices. The main contention here is the shift toward alternative fuels but, in our view, many of these forecasts are overly optimistic. These are transitions that will take more time than many in the market realize, and we have started to position with that view in mind.

Since these are contrarian positions (with oil prices remaining depressed for a substantial period of time), there is definitely risk involved. But we feel as though our entry points have been favorable enough (taken after most of the damage was already done) that the inherent risks here should ultimately prove to be profitable given the way they are structured. There are many opportunities for dividend investors to capitalize on these type of stances but it should be understood that the find factor is a vital component when structuring these positions and in adding them to a portfolio. These are not necessarily positions that should be held for thirty years, and that can deter some investors with a highly conservative mindset.

Added risk does mean added reward, however, and we do look for opportunities that have been shunned by most of the market. We will continue to look at the weakening energy space as a source for new investment ideas. But at the same time we will structure those positions in ways that factor time as an important element in order to shield against potential losses. We also make sure to keep these positions active within a well-diversified portfolio in order to gain added protection and to give us greater flexibility to move in and out of positions as market trends change.

What about you? Are you taking any risks right now? Please chime in in the comments below!

If you enjoy the D&I Digest and would like to be alerted to future editions, don't forget to "follow" me! And, please let me know if there's a topic you'd like to see covered in a future D&I Digest, either by commenting below or sending me a private message. I'd love to hear from you.

Finally, here's some recent Dividends & Income content you might want to check out (if you haven't already):

Nervous? Go For Quality, Diversify, Don't Reach For Yield - And Survive Investing Adversity by Mike Nadel

Why Berkshire Is Destined To Become The Ultimate Dividend Growth Stock by Dividend Sensei

The Preferred Investor by Norman Roberts

Prospect Capital: Expected Dividend Cut Of 20% To 30% by BDC Buzz

My Take On Tanger by Brad Thomas

REITs: The Foundation Has Become Increasingly Shaky by Adam Aloisi

Tracking The Treasury Rate For A 9% Yield On This Healthcare REIT by George Schneider

The One Thing Every Self-Directed Investor Must Do by Bob Wells

Retirement Crisis: It's As Simple As Not Saving Enough by Alpha Gen Capital

My 5 Favorite Dividend Investments Of 2017 by Colorado Wealth Management Fund

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Dividends & Income Digest: What Investment Risks Are You Taking? - Seeking Alpha

What is encouraged, however, are investments that fall along the lines of China's "One Belt, One Road" framework. That giant foreign policy plan seeks to invest billions abroad and shore up influence by strengthening China's infrastructure and trade links with the rest of the world.

Beijing is also supporting investments in energy resources exploration, agriculture, along with ones that advance China's technical abilities and research and development.

"There are profound changes taking place within China and internationally, that offer Chinese companies a good opportunity to invest overseas, but there are also many risks and challenges," the State Council said.

After Beijing relaxed rules on foreign investment a few years ago, Chinese companies went on a massive overseas shopping spree, spending a record $200 billion last year, according to Dealogic. But government worries grew as money flew out of the country and downward pressure on the yuan increased, especially as acquisitions started to span areas deemed more frivolous, from luxury resorts to soccer clubs.

The government stepped up restrictions on capital outflows in response, and the latest rules codify what has long been known: Beijing wants to shepherd investments into sectors that align with national economic and strategic goals.

"This probably is not really a new regulation, as such overseas investment like property, hotel and gambling have never been openly encouraged by the Chinese government," wrote Credit Suisse analyst Vincent Chan in a note. "This new regulation is more like a re-statement of policies that have already been implemented for some time, and not likely to create a major shock to the economy."

The impact of the recent crackdown on outflows has been dramatic outbound deals from China dropped 40 percent to $74 billion in the first half this year, based on Dealogic data.

Beyond the currency considerations, Beijing is clearly worried about the financial risk involved with these deals, experts said. The government has ordered banks to be more judicious about lending to China's more acquisitive companies. Regulators, meanwhile, are reviewing the purchases made and may even ask companies to sell off assets.

"I suspect that some of these companies have got themselves a little bit too far, they've overreached themselves," said Richard Harris, CEO of Port Shelter Investment Management. "I think Beijing is worried ... that some of these companies may go under as we've seen with other countries, with some of their champions in investing heavily."

Follow this link:
No sex, no gambling: China tightens rules on foreign investment - CNBC

The Hardin Memorial Health Board of Trustees unanimously gave the green light Tuesday to move forward with a business plan to implement 3-D mammography.

The board approved an initial investment of $1.2 million to purchase two 3-D mammography units to further advance the care Hardin Memorial offers the region.

Hardin Memorial Health Vice President of Operations Tom Carrico said about two years ago, they started a journey to comprise a comprehensive breast care program with three major components people, the process and technology.

Carrico said they have heavily invested into patients, saying, We have an all-star physician team.

We have all of the key components to make up, really, what is a comprehensive breast-care program here in Kentucky that rivals, I think, many across the nation, he said.

He said, with this new technology, the organization will be in position to significantly improve quality of care for those they serve.

We are here today for your approval of that technology, which is really the final feather in the hat, Carrico told board members Tuesday.

Also addressing the board was Hardin Memorial radiologist Dr. Sarah Callahan. She said the hospitals current 2-D imaging and biopsy system does not provide the most detailed image for screenings, diagnostic and breast biopsy. She said 3-D mammography exams are clinically proven to detect more invasive breast cancer, while also reducing unnecessary calls.

There is a learning curve when you implement a new technology like this, Carrico said. Every implementation they do have a slight increase, then it shortens off, Carrico said.

The new technology allows for a much more efficient biopsy for the patient, Callahan said.

The bottom line is it has the ability to detect smaller, invasive breast cancer. The breast cancer is there, we detected it maybe one year earlier, Callahan said. If you detect breast cancer in the early stages, it truly is curable. It is a highly curable disease if caught early.

As far as screenings go, Callahan said patients wont really notice a difference. The difference is on her end.

Instead of looking at four pictures ... I will now look at 120 images, she said.

Callahan said they receive calls every week asking if they offer 3-D mammography.

Board member Lisa Boone said, Like all the other women in this community, we have been waiting for 3-D mammography. ... We are anxiously awaiting it.

The equipment will replace one 2-D unit at the health groups main campus and add one new unit at Hardin Memorial Health Elizabethtown Diagnostic Imaging at Cool Springs on Ring Road. The investment also includes a new needle biopsy table. Hardin Memorial officials expect to have the new equipment in use before the end of the year. The remainder of the 2-D units across the health care system will be replaced in the next 12 to 14 months.

With October as breast cancer awareness month, Carrico told board members he would like to have a 3-D mammography available for use by mid-October.

The approval comes on the heels of two major gifts to the Hardin Memorial Health Foundation designated for 3-D mammography. Local entrepreneur Kelly Emerine recently presented an $80,000 gift to the foundation after the sale of her medication management app, Moms MedMinder, to the health group. Inspired by Emerine, board member and entrepreneur Mike Bowers presented a $20,000 gift to the foundation on behalf of area entrepreneurs.

Hardin Memorial Health President and CEO Dennis Johnson, in a news release, called the donations an important catalyst.

3-D mammography is an invaluable tool for HMHs Multi-Disciplinary Breast Team, Johnson said. This technology and the gifts that made it possible represent the immeasurable value the Foundation provides our health care system.

The board also approved plans to purchase Meade County Primary Care from KentuckyOne Health Medical Group. The two primary care physicians, four advanced practice registered nurses and 16 support staff at the practice will become Hardin Memorial employees. The practice will remain in the same location, and Hardin Memorial will assume ownership of the practice and the lease on the building on Nov. 1.

KentuckyOne Health approached HMH about acquiring the practice because HMHs primary service area includes Meade County.

The practice will remain open and continue to serve its more than 9,000 patients during the transition, HMH and KentuckyOne Health officials said in a news release.

The investments came with the boards review of financial data for HMHs 2017 fiscal year that ended in June. HMH Chief Financial Officer Lennis Thompson reported a $1.1 million profit margin, which was $6.8 million less than budgeted.

Even though HMH budgeted for a loss in July, Thompson told board members there was a profit of $86,000.

July is the time of year when volumes are typically at their lowest, he said. People are on vacation. Patients do not schedule elective procedures and people typically are not as sick.

Johnson also gave an update Tuesday on the recently revised smoke and tobacco-free campus rules.

Vice President and Chief Medical Officer John Godfrey said HMH has received some negative feedback from patients, but all in all, it is going well.

Were trying to be as empathetic with the patients as possible, he added.

Johnson said the biggest challenge is with visitors and family members.

Cigarettes cause lung cancer and lung cancer kills. Were in the healing business, he said. We are the largest proponent in health and health care in central Kentucky. Were going to do our part.

Read more here:
HMH makes $1.2 million investment - Elizabethtown News Enterprise

As China's financial markets mature, major non-Chinese financial firms increasingly want to open funds in the country and tap the multitrillion-dollar institutional investor market there.

This summer, UBS Asset Management received a license for private fund management in mainland China, and BlackRock said it plans to set up its first private fund in the country. Vanguard launched a subsidiary in Shanghai in late May, while Fidelity International announced in January it became the first global asset manager to receive a Chinese license for a private fund.

"You can no longer ignore China. You have to plan on being there," or have a good reason if you're not, said Chantal Grinderslev, senior advisor at Shanghai-based investment management consulting firm Z-Ben, told CNBC.

Chinese private fund assets under management

Source: Z-Ben

Chinese private funds' assets under management grew 54.6 percent last year, to $398 billion, according to Z-Ben. Institutional assets across the country leaped 500 percent from $1.1 trillion to $7.1 trillion between 2005 and 2015, and could hit $10.8 trillion by 2021 with global asset managers taking an increasing proportion, according to Z-Ben estimates.

"China is a key growth market for UBS Asset Management. Our goal is to be a leading asset manager in China for both onshore and offshore investors," Aries Tung of UBS Asset Management told CNBC in an email. "The license allows UBS Asset Management to start managing money for mainland institutional and high-net-worth investors in the world's second-largest economy for the first time."

Tung, who is UBS' managing director and head of strategy and business development for China, added the firm plans to increase its staff in China from about 20 to more than 30 by the end of the year.

A friendlier regulatory environment is encouraging interest by U.S. firms to introduce funds in China. Since last summer, the Asset Management Association of China has gradually opened up the private fund market to foreign asset managers who open local subsidiaries known as wholly foreign-owned enterprises, or WFOEs.

Previously, foreign fund managers had to rely on joint ventures majority-owned by Chinese companies. Foreign ownership of public investment funds is still restricted.

The push into China's financial markets also comes as more strategists emphasize the importance of global exposure in traditional portfolios, especially to fast-growing Asia.

The Boston Consulting Group in a July report highlighted China as a "promising" new market and one of five likely sources of "significant" gain in coming years for the asset management industry, whose active management business is pressured by outflows and technological developments.

"The Chinese market and its investors are becoming more sophisticated," the report said. "An aging population and the growth of wealth are expanding demand for dedicated products, including target-dated funds and ETFs."

Other foreign fund managers that have recently expanded in China include Neuberger Berman, which announced the opening of an investment management wholly foreign-owned enterprise in Shanghai in April and added a new investment team in China in July.

Private equity firms are also expanding in China. KKR announced on Aug. 10 it opened an office in Shanghai, its third office in Greater China. Warburg Pincus announced on Aug. 2 it is set to acquire a 49 percent stake in Chinese asset manager Fortune SG Fund Management, becoming the first global private equity firm to gain exposure to China's retail mutual fund industry and the richest deal in dollar terms to receive approval, according to Z-Ben.

From China's side, the country's firms are increasingly interested in U.S. financial services as well.

On July 10, China International Capital Corporation announced it agreed to acquire a majority stake in KraneShares, a U.S.- based seller of China-focused exchange-traded funds such as KWEB. The news followed an announcement in March that China Energy Company, or CEFC China, will buy a 20 percent stake in U.S. brokerage Cowen.

China is also growing its own financial firms.

The country already has the third-largest hedge-fund industry in Asia Pacific at $19 billion and could soon surpass the larger hedge-fund industries of Hong Kong and Australia, according to a July Preqin report.

"China could very well be number two or number three in hedge funds and private equity within the next two to three years" in the world, said Timothy Speiss, partner at accounting firm EisnerAmper and chair of the firm's Asia practice. Between the U.S. and Chinese financial industries, "You're going to see this tremendous integration."

Originally posted here:
Global funds expanding into massive Chinese investment market - CNBC

Privateer Holdings co-founders Michael Blue, Christian Groh and Brendan Kennedy. Photo via Privateer.

Privateer Holdings is raising another big investment round to fuel rapid growth of its marijuana-related subsidiaries as more governments legalize the use of cannabis.

The Seattle-based investment firm has reeled in an additional $58 million a mix of equity and a convertible note which is part of a larger round that Privateer expects to close at around $100 to $150 million.

This pushes total funding to date to $140 million for the seven-year-old company, which is not disclosing specific investors behind the new cash infusion.

Privateer, one of the top marijuana firms globally, previously raised $40 million as part of a convertible note in November. In April 2015it raiseda $75 million Series B roundfrom top investors likeFounders Fund, the venture capital firm started by PayPal co-founder Peter Thiel, an early investorin companies like Facebook, LinkedIn, Yelp, SpaceX, and others.

Privateer did not provide an updated valuation it raised its Series Bat an approximate valuation of $500 million but the firm could be nearingunicorn status.

The new investment will help Privateer continue growing its existing portfolio companies, develop new brands, and support future acquisitions and investments. It employs more than 500 people in seven U.S. states and seven countries.

Privateer, founded by Brendan Kennedy,Michael BlueandChristian Groh, owns and operates three companiesin the legal cannabis industry:

Privateer has come a long way since launchingback in 2010, when both the medical and recreational marijuana industries looked far different than today. Investors are flocking now as medical marijuana is legal in 29 states, while recreational marijuana is legal in eight U.S. states, including California, which legalized cannabis in November and could produce a legal market worth more than $5 billion. Bloomberg reported last year that the U.S. legal cannabis industry could grow to $50 billion within a decade.

Countries around the world are also moving forward with marijuana legalization; voters in Germany approved medical marijuana in January, while recreational use is expected to be legal in Canada next year.

But the industry is still in a nascent stage and some analysts say marijuana stocks are overhyped, asThe Motley Fool recently noted. There are also questions about how and if the federal government will enforce any bans on marijuana.

See the original post here:
Fast-growing marijuana investment firm Privateer Holdings raises another $58M to fuel expansion - GeekWire

SoundCloud today announced that it has closed the investor round necessary to keep it going for the foreseeable future. As part of the agreement, Alex Ljung will step aside and former Vimeo leader Kerry Trainor will become SoundClouds new CEO, with Mike Weissman as COO. Ljung will stay on to fully focus on the role of the chairman and the long-term. Billboard reports the exact amount of the investment is $169.5 million, which, says Ljung, makes this infusion the largest financing round in the history of SoundCloud.

"All of this together the capital, the capital partners with Kerry and Mike joining our team it puts our company in a really great position to stay strong and remain independent," Ljung tells Billboard. "We see a strong, independent future for the company."

Trainor tells Billboard he will endeavor to pay greater attention to the creators, which includes developing a robust creative toolkit for SoundClouds Unlimited service in hopes of attracting even more musicians to pay for its upper-tier subscription. "Millions of creators choose these tools to share their work with the world, says Trainor, [and] that will remain at the focus and center of the company."

Yesterday, Axios revealed details of a SoundCloud shareholder memo that said the future of the company hinged on a pending reorganization proposal. Though the exact details of that proposal have not been revealed, it appears it was accepted. As part of the new investment, per the memo, SoundClouds new and existing investors will receive Series F stock, a special class of common stock that has seniority and preference, while existing Series E investors will have their liquidity preference cut by over 40 percent.

See original here:
SoundCloud stays afloat with emergency investment, as CEO steps aside - The Verge

Could you run your own investment fund in college?

Ben Sender, a senior at Princeton University and founder of student-run investment fund Effective Altruism Investments (EAI), does just that.

EAI currently manages $100,000 and pursues "objectively good returns for objectively good causes," Sender says. The exclusive, inter-campus organization accepts just seven percent of the students from Princeton, Harvard University, University of Pennsylvania's Wharton School and Williams College who apply to join. That's about the same as Princeton's undergraduate acceptance rate.

Most of the students joining EAI are studying economics, computer science, financial engineering and math, although majors do vary. What brings them together is their interest in EAI's mission. Most of them are not invested in the fund; they're choosing to focus on managing other people's money.

"EAI is the result of intersecting passions for morality and investing, manifesting itself in a threefold mission to beat the market on a risk-adjusted basis, donate 20 percent of profits to the most worthy causes, and educate members and the community on investing and philanthropy," Sender tells CNBC Make It.

Sender, a 21-year-old from South Orange, New Jersey, grew up loving the investing world. As a high school student, he wrote for Seeking Alpha and created investing apps, including automatic stock valuation and analysis apps that garnered a total of 35,000 downloads.

See the article here:
Ivy League students turn a profit running a $100000 investment fund to support good causes - CNBC

As investment yields decline, business development companies are faced with a tough decision: Cut their dividends or reduce payments to their managers.

This quarter, FS Investment Corp. (NYSE:FSIC) did both, slashing its quarterly dividend from $0.22 per share to $0.19 per share, while agreeing to reduce its base management fee to 1.5% of assets, down from 1.75% of assets for at least one year.

Most publicly traded BDCs have only one manager, or advisor, who is responsible for managing the fund and making investment decisions. In exchange, the manager receives management fees plus incentive fees for good performance.

A complex web of relationships makes FS Investment's dividend policy less clear than other BDCs. Image source: Getty Images.

In contrast, FS Investment Corp., which got its start as a non-traded BDC, effectively has two managers. An affiliate of FS Investments (formerly known as Franklin Square) acts as its investment advisor, but the actual investment decisions are farmed out via a sub-advisory relationship with GSO/Blackstone, an affiliate of Blackstone Group. The fees earned from managing the portfolio are split in half. FS gets half, and GSO/Blackstone gets the other half.

My understanding is that the relationship between these two entities is contentious, to say the least. What started as a humble non-traded BDC has now grown into a powerhouse in private credit. In addition to FS Investment Corp., FS has four other private BDCs with a sub-advisory agreement with GSO/Blackstone that together had equity capital of approximately $9 billion as of March 31.

As yields come down, investors naturally look to outsize fees as a source of cost savings to spare BDC's dividends. But who, exactly, should pay for it? FS or GSO?

That's an important question. FS Investments' value may have been more clear during the fundraising process, when it relied on an army of financial advisors to sell shares of the then-non-traded BDC. But when it comes to the actual performance of the BDCs as they stand today, GSO/Blackstone plays the most important role in investment selection. See the diagram below from a December presentation.

Image source: FS Investment Corp. presentation

GSO/Blackstone's responsibilities include identifying and originating investments and monitoring credit aspects of the portfolio, among others. FS's roles appear to include duties that fall more into the spectrum of administrative tasks, providing only a secondary layer to GSO/Blackstone's investment selection process.

GSO is a highly regarded credit fund manager with approximately $95 billion of capital under management across a number of public and private funds, which collectively dwarf the BDCs it manages under a sub-advisory relationship. The FS Investment BDCs may be getting lost in the fray.

After all, GSO/Blackstone isn't exactly striking it rich with the FS Investment BDCs. The company stands to collect just half of the management fees (1.75% per year) and incentive fees (20% of returns in excess of 7.5% annually).

Assuming the new fee waiver is split equally between GSO/Blackstone and FS, GSO/Blackstone is effectively collecting just 0.75% on assets plus a 10% incentive fee on returns in excess of 7.5% per year. On that basis, GSO/Blackstone is the lowest-paid external manager of any publicly traded BDC.

While I've taken the position against many high-cost external managers in the BDC industry, there comes a point where the fee structure no longer incentivizes the manager. If GSO stumbles on an exceptional credit investment, is it likely to allocate a large share to the FS Investment BDCs, where it earns only half the incentive fee, or to one of its many other funds, where it doesn't share the rewards with a partner?

Fees aside, the operational aspects of FS Investment Corp. are interesting. The company's eleven member board of directors has substantial FS representation. As for GSO/Blackstone's role on the board, it appears to be nonexistent from my cursory view.

That may seem like a mere detail, but BDC boards are entrusted with more responsibility than your average publicly traded company. The board of directors has the very important responsibility of signing off on the value of the investment portfolio each quarter. It's interesting that credits picked by GSO/Blackstone are valued by a board that doesn't seem to include any GSO/Blackstone representatives.

Of course, this likely comes back to another important role of BDC boards: Selecting an investment advisor. Most BDCs stuff their boards with management allies, so as to minimize the risk that the board decides it's time for new management. FS Investment Corp.'s board could, at least in theory, decide that it's in the shareholders' best interest to cut FS out of the picture. That seems unlikely to happen, since FS Investment Corp's independent board members make substantially more in director fees than dividends, and generally own very little of the company's stock.

Admittedly, even the most thoughtful fee and incentive structures have their faults. And the truth is that from a shareholder perspective, the FS Investments' fee structure isn't the worst. At a minimum, it at least somewhat shelters investors from capital losses, given that the incentive fee is based on a metric that includes gains and losses, something that other BDCs don't have.

That said, other BDC managers are choosing to waive fees to spare their dividends, building up valuable goodwill with investors, and ensuring that the BDC trades at a premium to net asset value, thus allowing the management team to grow assets and thus future profits from a growing stream of fee income. That simple process is made more complicated when two entities collect a share of the fees.

The decision to put the burden of lower income on the backs of shareholders, its sub-advisor, and itself, puts it at odds with many similarly sized BDCs that have spared their shareholders from dividend cuts. It may also put it at odds with its sub-advisor.The relationship between GSO/Blackstone and FS, which I'm told isn't as friendly behind closed doors, may be its undoing. Individual investors who own the BDC are thus left to pay the price from a relationship they have nothing to do with.

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FS Investment Corp: Who Should Pay for Lower Returns? - Motley Fool

An American investment banker denies he is the jogger who pushed a woman into traffic on a bridge in southwest London. Eric Bellquist, a 41-year-old partner at private equity firm Hutton Collins, was arrested late Thursday in connection to the assault, but insists he was in the United States on the date in question, the morning of May 5.

The stunning incident was captured on surveillance footage. A man in shorts and T-shirt is jogging as a woman walks in the opposite direction on the pedestrian path of Putney Bridge. Before she passes him, the jogger appears to shove her off the walkway directly into oncoming traffic. A double-decker bus swerves out of the way just in time to avoid hitting the 33-year-old victim. The man dubbed the Putney Pusher by the British tabloids keeps running.

The woman suffered only minor injuries, thanks to the hero bus driver who veered just in time, and bystanders who rushed to help her. The victim told police that the jogger again ran by the same spot, about 15 minutes later. She tried to confront him, and he ignored her.

Bellquist was reportedly released on bail as police continue the investigation, and he has not been charged with any crime. Bellquists attorneys released a statement Friday maintaining their client had been wrongly implicated in the bridge assault. Bellquist categorically denies being the individual concerned and has irrefutable proof that he was in the US at the time of the incident, the statement read. Consequently, we expect a swift resolution to this wholly untrue allegation.

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American Investment Banker Denies He's the Jogger Who Shoved Woman Into London Traffic - New York Magazine

KITCO NEWS - Gold prices pushed to a two-month high Wednesday, on solid safe-haven demand. Video provided by TheStreet Newslook

A propaganda poster is displayed during a rally in support of North Korea's stance against the U.S., on Kim Il-Sung square in Pyongyang on Aug. 9, 2017. U.S. President Donald Trump said the United States' nuclear arsenal was "more powerful than ever" in a fresh warning to North Korea over its repeated missile tests. (AFP PHOTO / KIM WON-JIN/AFP/Getty Images)(Photo: KIM WON-JIN, AFP/Getty Images)

Chatter about nuclear weapons capabilities, tough talk between the U.S. and North Korea and three straight days of losses in the stock market might have you wondering if you should stash your cash in an underground bunker for safe keeping in case the bluster morphs into a real fight.

While that type of emotional thinking might not seem irrational given recent threats from Pyongyang and President Trump saying the U.S. would respond with fire and fury, rejiggering your portfolio in a major way due to the recent saber-rattling isnt a strategy recommended by most investment pros. While unsettling, the latest geopolitical scare has done little to dent the improving economic outlook.

More: Here's what to do if North Korea has you worried about your investments

More: Here's what to do if North Korea has you worried about your investments

What Wall Street does advise, however, is using this uncertain time to review your portfolio and make sure you arent taking on too much risk and can ride out a market drop if one occurs, says Sam Stovall, chief investment strategist at Wall Street research firm CFRA.

Indeed, given the market's run to record highs this year in tame trading, the uncertainty caused by the North Korea crisis could trigger selling by investors sensing now is a good time to take profits.

The Dow Jones industrial average closed down Thursday nearly 205 points, or 0.9%, and back below 22,000. It wasits biggest daily point drop since May 17 and third straight day of losses since the relationshipbetween the U.S. and North Korea turned more contentious Tuesday. The Dow, which hit an all-time high Monday, is down 1.25% from its peak but still up 10.5% in 2017.

Here are a few reasons why the latest geopolitical flare-up shouldnt spook you into fleeing stocks and funneling your moneyto the perceived safety of havens, such as cash, gold and U.S. government bonds.

The most feared outcome is war. Nuclear war is what really keeps people up at night. But the preferred -- and most likely outcome -- is that the recent escalation in tensions between the U.S. and North Korea will be resolved diplomatically, not militarily. Secretary of State Rex Tillerson downplayed the risk of war Wednesday, saying he doesnt believe there is any imminent threat of a nuclear attack from North Korea and that Americans should sleep well at night.

Wall Street pros say the main risk is if the war of words leads to combat.

There has to be a real worry that there will be a march to war in order to sink the stock markets buoyant tone, says Chris Rupkey, chief financial economist at MUFG in New York.

Overreacting to something that might not even happen isnt recommended.

A breakout in hostile actions between two nations is an outlier type of event that has nothing to do with normal market drivers such as the stock valuations, corporate earnings or the health of the economy, so the market impact really cant be modeled, says Bill Hornbarger, chief investment officer at Moneta Group in St. Louis. Im not sure I would reshuffle my portfolio based on a low-probability event.

Main Street investors need to remember that the Dow Jones industrial average hit an all-time high of 22,118.42 on Monday, and is just 1.25% below that level. The takeaway? The blue-chip stock gauge is resilient and has overcome many military confrontations and geopolitical threats in its 121-year history.

History shows that stocks tend to quickly rebound from losses resulting from war or other shocks, such as terrorism. The Japanese attack on Pearl Harbor on Dec. 7, 1941, caused the Standard & Poor's 500 stock index to drop 3.8% the day of the attack, but it recouped its losses and was 0.3% higher a month later, data from Strategas Research Partners show. Similarly, after the Sept. 11 terrorist attacks, the market recouped its five-session 11.6% drop in four weeks. Stocks didnt even decline after the start of the Iraq War in early 2003.

Adds Stovall: The S&P 500 rose 5.8% in August 1945, the month in which two atomic bombs were dropped on Japan. Essentially, war has a poor record of disrupting Wall Street.

Since World War II, the U.S. has been involved in many military conflicts, but most have had a very limited impact on financial markets in the short run, and almost no impact in the long run, says Alan Skrainka, chief investment officer at Des Peres, Mo.-based Cornerstone Wealth Management.

The escalation of tensions with North Korea can be counted among the exogenous shocks that do unfortunately hit the markets from time to time, says Erik Davidson, chief investment officer at Wells Fargo Private Bank in San Francisco. But past performance suggests investors would be ill-advised to make big changes to their portfolios as a result. Many times, says Davidson, these feared events dont happen, which was the case with the Cuban Missile crisis in October 1962 and fears surrounding the Y2K computer glitch that never materialized at the start of 2000.

The market has a habit of shrugging off geopolitical headwinds and climbing higher.

Davidson offers the following advice to investors that are reevaluating their holdings: Have stock exposures crept too high given the recent run-up in global stocks? Is there enough of a bond weighting to provide ballast to the portfolio in case of increased market turbulence? Is there enough cash available so that an investor can ride out any potential short-term market disruptions?

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Investment anxiety? What to do if North Korea has you worried - USA TODAY