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Index funds are the epitome of passive investing.

Rather than trying to beat the market by selecting individual stocks, these funds own all stocks constituting the index, matching the performance of the underlying benchmark. There are plenty of advantages to this way of investing lower fees, less reliance on the competence of a fund manager (many of whom fail to beat the market) and market-wide diversification make index funds one of the safest ways to invest your money.

The greatest advantage index funds have offered over the last few years is their ability to capture the returns of the longest bull run in stock market history. Over the last 10 years, the SPDR S&P 500 ETF Trust (ticker: SPY), an exchange-traded fund that mimics the S&P 500 index, has enjoyed an average annual return of 11.04% not bad at all, and better than many individual investors have been able to achieve.

Investors have responded to the impressive performance of index funds by fleeing from actively managed funds in droves and putting their hard-earned money into passively managed funds. According to Morningstar, in 2019, investors withdrew a net total of $204.1 billion from actively managed U.S. stock funds, while passively managed funds saw investors pour in $162.7 billion. This was the culmination of a years-long trend, marking the first time in history that the total assets of passive funds surpassed those of active funds.

Then a global pandemic began.

While index funds may be the pinnacle of passive investing, 2020 has been anything but passive for the stock market.

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Market volatility inherently favors stock pickers adept at changing with the times, while index funds have been left to hang on for dear life as the markets have surged and sagged. Tech stocks, like Facebook (FB), Amazon (AMZN) and others within the "FAANG" group, have dramatically outpaced the market, meaning that investors who focused their funds on these companies are beating the returns of their peers whose investments are diversified across an entire index.

In short, the volatility of 2020 has raised a potent, important question:

"Just because index funds have been volatile does not mean investors should necessarily steer clear," says Matthew Lui, vice president at Investment Research Canterbury Consulting. "They should assess their risk tolerance in light of the drawdown and understand that even though investing in index funds has been smooth sailing for quite some time, every once in a while you'll get whacked with an event like what happened in the first quarter."

Derek Horstmeyer, associate professor at George Mason University School of Business, agrees.

"Index funds are still the best bet in this terrible roller-coaster environment. The single greatest factor in long-run returns for a fund are the fees paid," Horstmeyer says. "With index funds now with expense ratios down at close to zero, this is still far better than any actively managed fund. Further, active management notoriously does poorly in volatile periods since they are bad market timers this is another reason to stick with indexers."

As if the benefits don't end there, Horstmeyer goes on: "Index funds are also far more tax efficient, which is very important in volatile markets to maximize after-tax returns."

But does sticking with index funds mean leaving potential gains on the table? After all, the recent upswing in the market has been the result of a surge in a few core industries, namely tech, while other sectors such as travel and hospitality have largely lagged. And while the diversification of index funds is one of their greatest strengths when the market as a whole is moving upward, if gains are piecemeal, then index funds may become eclipsed by the gains of actively managed funds.

Yet no less than Jack Bogle himself, the father of index investing, encouraged investors to focus less on the flashy gains and losses and more on the hidden costs of active investing. Namely, fees.

"Active management can be an effective approach," Lui admits. "Strong active managers can take advantage of short-term opportunities caused by big market moves to outperform index funds. However, our research has shown that it is difficult, though not impossible, to identify active managers that can consistently outperform net of fees."

"This is particularly true in widely trafficked areas such as large-cap U.S. stocks," he adds.

Fees are the hidden costs of actively managed funds that chip away at your profits. These fees usually take the form of management fees, operating expenses or expense ratios a calculation of a mutual fund's operating expenses divided by the average total dollar value of the assets in the fund. For actively managed funds, the expense ratio usually ranges from 0.5% to 1%, with 1.5% on the more expensive end. Although those numbers may sound low, they add up over time and eat deeply into any gains you see. Meanwhile, the expense ratio of passive index funds is often closer to 0.2%.

If you believe in the market's turnaround and that things will continue to get better from here, what's the best index fund to invest in if you're bullish?

"As a rule of thumb, index funds that focus on stocks of smaller, foreign, or more cyclical companies tend to be riskier but carry the prospect of potentially higher returns in the long run," says Lui. "These may be suitable for investors with a higher risk tolerance and a more bullish outlook."

As for the bears, Lui notes that "for the more defensive-minded, index funds that invest in large U.S. companies, such as the S&P 500, tend to be less volatile compared to the above options. Balanced funds (comprising a mix of stocks and bonds) can also be a way to provide downside protection."

So at the end of the day, are index funds still a good idea right now?

Brandon Renfroe, financial adviser and assistant professor of finance at East Texas Baptist University, summarizes it well.

"Index funds are still a good choice in 2020, but it's important to remember why you would choose index funds in the first place. Index investing relies on a belief that you can't consistently select 'better' individual investments. Successful index investing means you accept the market average and get it in a cost-effective way."

Your personal investment horizon is also important to keep in mind. "If you are only thinking about short-term return relative to other funds, you'll always be able to find a reason to regret choosing index funds. It's the nature of the strategy," Renfroe adds.

Excerpt from:
Are Index Funds Still a Good Investment in 2020? - MSN Money

The stock market has been on a wild ride lately, and Americans aren't enjoying it. In fact, a Gallup poll taken at the end of April 2020 revealed just 21% of people think stocks or mutual funds are the best long-term investment. This was the lowest level since 2012. And that was well before it was announced that the country had officially entered a recession.

If you're concerned about buying stocks now, you aren't alone. But you may also be making a big mistake as a recession is as good a time to invest as any -- or perhaps an even better one.

Don't take my word for it either. Heed the advice of the Oracle of Omaha, as Warren Buffett, one of the world's best investors, has a lot to say about investing in troubled times. Here are some pearls of wisdom to take to heart.

Image source: Getty Images.

More than half of all Americans fear the market hasn't hit bottom yet. If you're one of them, you shouldn't let fear prevent you from putting your money in.

As Buffett explained, when most people are fearful, it's a good opportunity to purchase shares of stock at low prices. And who doesn't want to buy low and sell high?

While the market has largely recovered from the coronavirus-driven crash in March, another correction is inevitable as many investors are still overvaluing stocks because they aren't taking into account the full economic impact COVID-19 could have throughout the summer and fall.

If the market ends up crashing again, you may be tempted to sit on the sidelines and wait until the bad times have passed. Instead, heed Buffett's advice about the opportunity to invest on the downswing and take the chance to get your money in to score even deeper discounts.

A quick glance at the news shows that commentators aren't very hopeful about the future. And with the country in a recession, coronavirus cases rising, and justifiable fear of a second wave, you won't get much reassurance right now.

But according to Buffett, that's a good thing because you won't be paying a high price for words that mean nothing in the end since, after all, no one can predict what's coming.

Americans may be wary of stocks because they're worried about the risk of loss -- and March's market crash didn't help allay their fears. But, as Buffett points out, putting your money into the market really only carries big risks if you don't know how to do it right.

Of course, any investment could lose money. But if you know how to pick solid companies to invest in (or you invest in index funds that track the market's performance) and you build a diversified portfolio, the most likely outcome based on decades of historical data is that you'll earn a reasonable return overall, over time.

This doesn't mean no investments will perform poorly, and it doesn't even mean that you won't have bad years. But it does mean that when you take the time to learn how to invest, you invest for the long term, and as you make informed decisions in building a diversified portfolio, you reduce your risk -- even if you're investing in a recession.

Of course, on the flip side, if you think you can invest your money during the downturn and make a quick buck without taking the time to learn the fundamentals of sound investing, you could be setting yourself up for disaster.

There's plenty of reason for doom and gloom during the 2020 recession, but anticipating bad times does little to help you survive them.

Instead, follow Buffett's wise words and take the time to build your ark. You can do this by developing a solid investment strategy, researching and picking stocks you'll be happy holding for a while, and making sure you've taken the steps needed to recession-proof your finances.

Recessions almost always present buying opportunities, but this one is unique because it wasn't driven by natural economic cycles but rather by a black swan event. If effective treatments are developed for coronavirus or a vaccine comes along sooner than expected, economic recovery may be swift.

Don't miss out on the chance to invest when things look bleak -- as long as you do it wisely. Otherwise, you could very well come to regret it.

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Worried About Investing in a Recession? Take This Advice From Warren Buffett. - The Motley Fool

This is a paper of two narratives. The front pages are beset by worries over second waves, geopolitical and social tensions, economic turmoil and a painful uncertain recovery from the after-effects of COVID-19 and the ensuing economic paralysis. The business pages talk instead exuberantly about v-shaped recoveries and markets regaining their heights, with occasional fretting about the sufficiency of stimulus and the need for more.

Occasionally, trade wars and collapsing demand cross over but only insofar as they roil the sustainability of financial returns. Even then, there is an underlying confidence that clearer heads will prevail and we will muddle through. Indeed, one may go so far as to say markets and investors are remarkably sanguine in the face of what seems like an even more fraught global environment littered with tail risks.

This is cognitive dissonance in action.

Market meet economyMarch 2020 saw the fastest bear market in US history, to be followed by the fastest rally. In less than five weeks, the S&P 500 fell almost 34%. As of the first week of June, it had regained much of its ground to sit back at where it began 2020.

In financial market after market, the same pattern has played out. Credit spreads widened to levels last seen a decade ago, before rapidly compressing again. WTI oil dropped to a negative $37 a barrel on 20 April, before yo-yoing back almost equally in the opposite direction to sit at a positive $37 per barrel by 4 June.

Turn to the economy, however, and the pattern disappears.

In the US, unemployment soared to 14.7% in April, before dipping slightly to 13.3% in May. Even a mild sense of recovery, however, was quickly dispelled when it came out that survey takers had mistakenly classified 4.9m people as employed. May was still an improvement, but it still stood at 16.1% after correcting for this error.

In the UK, 60% of businesses reported by May that their turnover was lower than normal ranges, while out of work claims have grown rapidly to north of 2m and to levels last seen in the early 1990s a scarring period for many parts ofthe country.

Globally, the International Labour Organization estimates that the equivalent of 300m jobs might be lost globally once job losses and cuts in working hours are taken into account. That is even before taking into account the impact of pay cuts that are appearing across a range of sectors and countries.

The OECD struck an equally positive tone as it said the Covid-19 pandemic had triggered the most severe economic recession innearly a century. It forecastsglobal economic activity will fall 6% in 2020, with five years of income growth lost across the global economy by 2021. If a second wave appears, then the numbers are correspondingly worse.

It is hard to call any of this a positive backdrop, and given the shock to demand, it is even harder to contemplate a quick recovery to some former normal.

A clear divergence has appeared between economic uncertainty and financial volatility. This is not conjecture or argument but one borne out by hard data.

In recent years, measures of economic policy uncertainty have risen and are at elevated levels that are typically associated historically with financial turmoil. In contrast, measures of financial volatility (such as the VIX) have ground ever lower and, barring the odd jitter, sit at historical lows.

One can combine the two and track over time to create an index of their disconnectedness a cognitive dissonance index (CDI), so to speak (figure 1).

The trend is a clear one and the disconnect today stark. The CDI has generally stayed in a tight band but began to rise after the last financial crisis, with the disconnect only worsening in recent years.

The implication is one of complacency. Financial markets are ultimately linked to the real economy and over the long term their behaviour must reflect the underlying economic reality. Either uncertainty must fall to match expectations, or volatility must rise to reflect the dilemmas facing policymakers today.

Living in the momentAt the heart of this divergence lies human behaviour and the perils of moral hazard.

Financial markets are not static entities. They are collective nouns for the actions born of the hope, greed, and fear of countless human participants. What they portray is emotion as much as any underlying economic reality and the volatility that we typically observe is driven by the competition between these emotions. Different worldviews vie for dominance, coalescing into temporary paradigms transient accepted wisdoms that ebb and flow over time, euphemistically creating the peaks and troughs of volatility we observe.

The belief thatpolicymakers will somehow muddle through and support markets, no matter what, has led to a growing disconnect

After the financial crisis of 2007-09, central bank monetary support first sustained markets and then increasingly lulled investors into a comforting sense of security. Forward guidance accentuated this, and even as uncertainty has grown, the belief that policymakers will somehow muddle through and support markets, no matter what, has led to a growing disconnect.

From this perspective, the (near) absence of volatility is not a boon. It is a reflection of the fact that there are no competing world views. Clear signs are apparent of a herd mentality that has developed over the past decade and an entire generation that has grown up in a world of ultra-low rates and monetary accommodation.

Faced with a world of tail risks, the investment horizons of markets and their participants have shrunk, so that these risks and the vast uncertainties they represent now sit just beyond. Markets remain, then, in a comforting cocoon of omniscient policymakers, who will do what it takes to maintain the existing order.

Nothing has happened to shake that belief. Huge doses of monetary and now fiscal stimulus have flooded the financial system in recent months. Over 130 central banks cut rates in 2020, while large economies have devoted an average of nearly 25% of GDP to stimulus of one form or the other (figure 2). Is it any wonder that markets rallied while the economy cratered?

Markets have extrapolated this present largesse and dont fight the Fed mentality into the far future, imbibing a false sense of permanence. But economics cannot be divorced from politics, geography and society all important influences on the course of money and economies historically.

The underlying reality is one of fragility, not strength particularly when set against the growth in economic uncertainty.

Investors do not fully appreciate the stark choices facing policymakers today from future demand, to supporting businesses, to creating jobs, to worrying about the growing debt burden across all parts of the economy. There are, in addition, the growing pressures of populism, fed by disenfranchisement and inequality.

Instead, they have derived a simple correlation between monetary (and fiscal) support and rising asset prices, even in the face of future uncertainty. But there is nomathematical or economic relationship between the two, merely a psychological link based on perception and faith.

It would be foolish to take that assumption at face value. Given the strength of anger amongst populations globally and the visible scars of inequality now emerging in the aftermath of Covid-19, future bailouts may bypass markets entirely and go straight to society.

And what happens when growth that Holy Grail finally returns?

Monetary largesse might be withdrawn, stimulus might be unwound and bailouts become a thing of the past. Now that would be terrifying given todays reliance on these comfort blankets. Cognitive dissonance in reverse, with economies roaring and market whimpering, could become apparent.

There is something fundamentally wrong with a world where growth is to be dreaded. Long-term investors should tread with caution, grabbing their pennies for now but also watching that steamroller carefully lest it begin to move again.

Dr Bob Swarup is principal at Camdor Global Advisors, a macro advisory firm focused on independent actionable research and holistic analysis. He can be contacted on swarup@camdorglobal.com

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Briefing: The unbearable lightness of investing | Features | IPE - IPE.com

Spanish esports organization Vodafone Giants made a series of announcements in the last two months that are opening it up to expand its operations internationally. Following the acquisition of X6tence by its parent company Giants Gaming Esports and closing a round of investments in May, it announced that Red Bull joined Nike and other brands as a team sponsor.

We have been leading the Spanish market for a long time. We have considered it necessary to expand our brand to other markets and especially to games in which we can achieve international returns, like for example Rainbow 6 with our Team in Apac Pro league under Giants, and in CS:GO with our new Danish roster for X6tence. We are also looking very closely at everything that happens in Latin America, which due to the proximity of our language is one of our medium-term targets, Giants Gaming Esports CEO Jos Ramn Daz told The Esports Observer.

The international movement came shortly after the conclusion of the investment round, in which the Snchez Czar Group allocated 3M ($3.3M USD) to Vodafone Giants. It was the largest fundraising in esports in the country and keeps the Giants as a company still with 100% Spanish capital. In addition to boosting the organizations internationalization, the resource will also be used for the development of new products and the construction of headquarters in Malaga.

Shortly after, Vodafone Giants announced Red Bull as a new sponsor. The agreement is valid for one year and the energy drink brand will appear on Giants social networks and its different broadcast channels. According to the announcement, the agreement also states that Red Bull will provide the organization with all its knowledge in competition and preparation for elite sport.

Daz said that this agreement is one more step in the evolution of our brand and confirms the good health of our company and the Spanish ecosystem. Red Bull Spain said at the time the deal was announced that it reassures the companys commitment to the esports sector, and predicts that esports is a market niche that will grow dramatically in the upcoming years.

Red Bull joins Nike and ChupaChups as one of the main sponsors of Vodafone Giants, which is also supported by other brands like Ozone, Diesel, and even the city of Malaga. Although the agreement with Red Bull is only one-year-long, the organization states it works together with the brands to build a long-term relationship, and the sponsor renewal rate is close to 100%.

Go here to read the rest:
Vodafone Giants CEO on Acquisitions, Investments, and the Necessity of 'International Returns' - TEO - The Esports Observer

The new line is the result of a DKK 100 million (12 million) investment that has enabled BioMar to increase the annual capacity of its Danish facility by 25 percent.

Situated in Jutland, it is close to many of the worlds leading RAS companies, allowing BioMar to focus on feeds for land-based farming.

Being situated in an area with a long history of RAS research and development has enabled us to be first movers in RAS feeds and will continue to be crucially important in the innovation development of feeds for land-based farming. There is good recognition for our RAS feeds globally and our ambitions for this growing segment are high, stated Carlos Diaz, CEO of BioMar Group.

The Danish production facility has experience in specially designed feeds for more than 40 aquaculture species, including trout, salmon and yellowtail kingfish. The investment project has been able to increase the overall capacity to 160,000 tonnes.

Anders Brandt-Clausen, managing director of BioMar Denmark explains: Installing an extra production line into a facility that is in daily operation was challenging, particularly in the last few months of the process where we all have been working under extraordinary circumstances due to the COVID-19 situation. Thanks to our highly skilled and dedicated people, we have been able to successfully manage the process without compromising the daily operations and scheduled deliverables.

Aquaculture feeds from the new line have been tested through the last couple of months and, according to BioMar, have shown impressive results.

Pellets coming out of the new line are now in a much better diameter: length ratio, the inter-size gap has been improved for at smoother transition between pellet sizes. The improved process control technology on the new line will further strengthen BioMars ability to focus on more physical quality parameters such as sinking speed and water stability, stated the company.

We have just been through the fry feed season and we received very positive feedback from farmers around the world on the quality and performance of the products, concluded Brandt-Clausen.

Link:
12 million invested in RAS feed production - The Fish Site

Weve been through a lot this year, said LeBron James. The three-time NBA champion and Los Angeles Laker talked to me on June 23 via Zoom with his childhood friend and business partner, Maverick Carter. It was the second of two joint interviews to discuss their new company, but the first since the world locked down because of Covid-19. James was in their hometown of Akron, while Carter was in L.A. Kobe Bryants death in January was followed by the pandemic and the suspension of the NBA season, and then, of course, the horrific killing of George Floyd. Just seeing that video, how many people were hurt not only in Minneapolis, but all over the worldand especially in the Black community, because weve seen this over and over and over. So, you know, he added, its been a lot thats gone on in 2020.

The pair thought it was going to be a big year for different reasons. On March 11, the same day the NBA suspended its season and a little more than a week before their adopted hometown ordered residents to shelter in place, James and Carter formed the SpringHill Co. after raising $100 million. They describe it as a media company with an unapologetic agenda: a maker and distributor of all kinds of content that will give a voice to creators and consumers whove been pandered to, ignored, or underserved.

Photographer: Ike Edeani for Bloomberg Businessweek

SpringHill is named for the Akron apartment complex where James and his mom moved when he was in sixth grade. It consolidates the Robot Co., a marketing agency, with two other businesses. The first, SpringHill Entertainment, is behind The Wall, a game show on NBC, and the movie Space Jam: A New Legacy, which stars James and is scheduled to be released next year. The second, Uninterrupted LLC, produces The Shop: Uninterruptedan HBO talk show featuring James, Carter, and other Black A-list celebritiesas well as Kneading Dough, an online partnership with JPMorgan Chase & Co., in which athletes talk about money to promote financial literacy. (They do it in a way thats incredibly relatable, says Kristin Lemkau, chief executive officer of JPMorgans U.S. wealth management business, who created the show with Carter.) Uninterrupted, a hybrid production-marketing business, is also responsible for a Nike Inc. shoe collaboration and a hoodie collection for Pride Month designed with soccer star Megan Rapinoe and basketball great Sue Bird.

In a February interview at the Lakers practice facility in El Segundo, they talked about SpringHill as a platform to give people of color the creative control thats long eluded them. Carter calls the company a house of brands. Its part Disney storytelling power, part Nike coolness, and part Patagonia social impact. In 2020 stories can be told in many different wayson social media, in films, as well as with sneakers and sweatshirts. This is ultimately a company thats about point of view, the community you serve, and empowerment, says L.A. investment banker Paul Wachter, who helped put the project together. This is a company designed to move the culture.

LeBron James on Black Lives Matter

At the practice facility, a day after putting up 40 points on the New Orleans Pelicans, James told me: When we talk about storytelling, we want to be able to hit home, to hit a lot of homes where they feel like they can be a part of that story. And they feel like, Oh, you know what? I can relate to that. Its very organic to our upbringing. Carter added: When you grow up in a place like where we were, no matter how talented you are, if you dont even know that other things exist, theres no way for you to ever feel empowered because youre like, Im confined to this small world. Thats our duty. A lot of exposure.

What was aspirational in February is a lot more real now. Black people are dying from the coronavirus at more than twice the rate of Whites, amid a recession in which Black unemployment has climbed to its highest level in more than a decade, and while an historic wave of protests is sweeping across the countryand world. But these are the times James and Carter find themselves in, and they may be the two people best suited to help others voice and answer the questions were all asking. Discussions about race dominate media. Books about White privilege and anti-racism top bestseller lists; U.S. demand for Netflix Inc.s satirical Dear White People and When They See Us, a miniseries about the Central Park Five, skyrocketed as protests got under way, according to Parrot Analytics. HBO Max temporarily removed Gone With the Wind from its catalog (in honor of Juneteenth, HBO.com made The Watchmen available for free), while Epic Games Inc. got rid of police cars in Fortnite.

Podcasters at Uninterrupted in L.A.

Photographer: Ike Edeani for Bloomberg Businessweek

Carter took advantage of the lockdown to spend virtual one-on-one time with the 105 employees of the new venture, as well as to finalize partnerships. He signed a TV production deal with Walt Disney Co. and is working with Netflix on a basketball-themed movie that would star Adam Sandler. A series he worked on with Netflix, Self-Made, about Madam C.J. Walker, a Black woman who created a beauty empire in the early 20th century, starring Octavia Spencer, premiered in March.

As the pandemic ground Hollywood to a halt, SpringHill Entertainment joined with Laurene Powell Jobss XQ Institute to produce a virtual ceremony James hosted called Graduate Together: America Honors the High School Class of 2020. It featured addresses by former President Obama and Nobel Peace Prize winner Malala Yousafzai.

Carter said on Zoom, Im getting a lot of calls from other CEOs. A lot of calls on, What are you doing? What do you think we should be doing? Im explaining to people, Dont treat this as a moment, he said. This is bigger than a momentthe attention that issues of inequality are getting right now is more like what this country should be, and what this world should be, he said. Weve always been about empowering people who feel like us and come from the communities that we come from and want to believe in our mission.

LeBron James on SpringHill Company

Devin Johnson, SpringHills chief operating officer, says that diversity is built into the company. He says its employees are 64% people of color and 40% female. Ive never had to convene a task force, he says, as other companies scramble to figure out how they can be more reflective of society.

SpringHill might just sound like another superstar athletes vanity project. But Johnson says the company isnt set up forand arounda single athlete; rather, its a platform in his image: You cant create a real digital business on a celebrity. We dont do that with LeBron. He is our founder and our North Star, but the business isnt built on everything touching him.

That attitude has freed up James for other projectslike, for example, playing professional basketball. Play is scheduled to resume on July 30, with 22 teams competing for spots in the playoffs, all to be held in a quarantine bubble at Walt Disney World in Orlando. Many have picked the Lakers to win the title.

And earlier this month, James recruited current NBA stars such as Trae Young of the Atlanta Hawks, as well as former star and now broadcaster Jalen Rose, to form More Than a Vote. The group is focused on protecting voter rights and preventing suppression, especially in Black communities. James announced it after social media posts showed people waiting for hours to cast ballots in Georgias primaries. Weve had voter suppression for so long, James said on Zoom. People not understanding how they can vote, where they can vote, if their vote really counts.

After forming the group, James was criticized by Hong Kong democracy activist Joshua Wong, who accused him of being hypocritical. Wong said in a tweet that Jamess position didnt align with past comments. He was widely criticized last year for calling Houston Rockets General Manager Daryl Moreys support for the citys protesters misinformed.

In February, when I asked what hed learned from that experience, James said it taught him to keep an open mind about how to continue to get better. On the June 23 call, James said: I speak about things that Im knowledgeable about, that Im educated on. And at the end of the day, right is right, and wrong is wrong. I want the betterment of peopleno matter skin color, no matter race, no matter anything.

The SpringHill executive leadership team: (from left) Paul Rivera, Ricardo Viramontes, Jennifer Lewis, Camille Boothe, Louisa Chen, Jamal Henderson, Matthew Trunzo, and Devin Johnson.

Photographer: Ike Edeani for Bloomberg Businessweek

A little more than a decade ago, it might have seemed unlikely that James and Carter would amass a war chest of $100 million. The investors are financial services company Guggenheim Partners LLC, UC Investments, News Corp. heir Elisabeth Murdochs content company Sister, and SC.Holdings, the investment fund run by entrepreneur Jason Stein. James is chairman of SpringHill, and Carter is CEO. Joining them on the board, in addition to Murdoch and Guggenheims Scott Minerd, are Serena Williams, Apollo Global Management co-founder Marc Rowan, Live Nation Entertainment Inc. CEO Michael Rapino, Boston Red Sox Chairman Tom Werner, and Wachter.

Carter was three years ahead of James at St. Vincent-St. Mary High School in Akron. When the Cleveland Cavaliers drafted James in 2003, Carter went to work at Nike full time. Growing up, that was my favorite company, and I thought I loved it because of the shoes and sports, Carter said in February. In reality, they told me amazing stories about the athletes I cared about.

He became Jamess wingman in 2005. Their first major project, The Decision, was a failure. In a spectacle aired live on ESPN in July 2010, James announced30 minutes inthat he was leaving Cleveland and signing a free-agent contract with the Miami Heat. Im gonna take my talents to South Beach, he said. The theatrics didnt sit well; Cleveland fans who felt betrayed burned his jersey. The sin was forgiven when he returned to the Cavs in 2014 and broke the citys half-century championship drought two years later.

SpringHill is named for the Akron apartment complex where James and his mom moved when he was in sixth grade. Carter calls the company a house of brands.

Photographer: Ike Edeani for Bloomberg Businessweek

For many, the failure of The Decision validated suspicions that Carter was just another star athletes friend. But, Carter said, the fiasco helped him grow as a businessman. Even if their approach had been off, the importance of owning your own story, not just hawking someone elses, wasnt lost on Carter, or Jamesor on anyone else in the NBA, for that matter. What was underappreciated at the time was that The Decision ushered in an era of player empowerment thats spread to other sports, as well as collegiate and high school athletics. Theres virtually no athlete who doesnt feel emboldened to weigh in on just about anything on social media and demand a semblance of career control that would have been unheard of 20 years ago.

In 2014, Carter and Wachter negotiated Jamess deal with Nike, which ultimately will pay him more than $1 billion. Wachter, whos advised Bono and Arnold Schwarzenegger, helped James and Carter team up with Cannondale bikes and Beats Electronics, a partnership that earned James more than $100 million when Apple Inc. bought Beats for $3 billion in 2014, say people familiar with the deal. And an arrangement to fold LRMR Marketing & Branding(now LRMR Ventures), the firm that still handles Jamess endorsements, into Fenway Sports Managementowner of the Boston Red Sox, the New England Sports Network, and Liverpool Football Clubgave them equity in the English Premier League. Through all of that, theyve just said, Were going to do things our own way, and were going to write our own tickets, Wachter says. SpringHill, he adds, is ultimately a manifestation of that.

I speak about things that Im knowledgeable about, that Im educated on. And at the end of the day, right is right, and wrong is wrong. I want the betterment of peopleno matter skin color, no matter race, no matter anything.

Photographer: Ike Edeani for Bloomberg Businessweek

With those deals under way, Carter moved to L.A. in 2014 and turned his attention to media. He signed a production deal with Warner Bros. Entertainment Inc. that gave James and him offices on the loton the fictional Wisteria Lane from Desperate Housewives, the satirical epitome of White suburban life.

Creating content that caters to the opposite of that is what Carter, James, and their backers want to do. UC Regents Chief Investment Officer Jagdeep Singh Bachher says: This is not a time to slow down. This a time to double down on what theyre doing. Theres a need for leadership in the country, a need for examples that are inspiring for the country, and a need for content to mobilize the country in the right direction.

James has cited Muhammad Ali as a role model. Everyone was so fascinated about how great a boxer he was, he said in February. I think that was the least thing in his mind. Every day he was trying to figure out how to better the world. I think 80%, 90% of the people didnt agree with anything that he did back when he was doing it. But that didnt stop him. He stayed focused on his mission, and thats what were talking about. The mission.

On the Zoom call, James praised NBA Commissioner Adam Silver for encouraging players to speak up and for using the NBA shield to back us. When asked about the NFLs treatment of Colin Kaepernick, the former San Francisco 49ers quarterback who took a knee during the national anthem to protest racial inequality and hasnt played in the NFL since 2016, he said, We have not heard that official apology to a man who basically sacrificed everything for the better of this world. (NFL Commissioner Roger Goodell said in mid-June that he would encourage a team to sign Kaepernick.)

If theres pressure on SpringHill to rise to the occasion, the founders are lucky that neither of them is new to expectations. James, after all, was on the cover of Sports Illustrated when he was a junior in high school. Im OK having that pressure of my community and other Black communities across America that look up to me and look to me for inspiration or for guidance, he said in our last interview. Its just my responsibility, and I completely understand that. And so every day I leave my home, or I wake up out of my bed, I understand that its not just about me. Im representing so many people. Read next: Americans Rush to Start Businesses, Stoking Optimism for Rebound

(Updates information on Elisabeth Murdochs investment, Paul Wachters role in Jamess 2014 Nike deal, and Jamess endorsement company.)

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LeBron James, Maverick Carter's SpringHill to Be a Media Empire - Bloomberg

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TINA may have some competition.

TINA, of course, is the acronym for There Is No Alternative, the description applied to U.S. common stocks, especially the large-capitalization variety that dominates the major indexes such as the S&P 500 and the Dow Jones Industrial Average.

Thats because of the Federal Reserves policies that have pushed interest rates to historic lowsand all the way to nearly 0% for short-term cash equivalents. Yet as the risk to the equity market has increased along with the averages sharp recovery from their March lows, Terri Spath, chief investment officer of Sierra Mutual Funds, recommends alternatives to TINA.

The Fed essentially created an all-you-can-eat buffet for investors by slashing rates and pumping in liquidity by purchasing Treasuries, agency mortgage-backed securities, and, for the first time, corporate debt securities, she says. Investors have gorged by sending the S&P 500 up over 36% from its March 23 low, even after Wednesdays 2.6% decline, which shows the need for investors to become more cognizant of risk.

While investors attempt to manage the risk of such sharp drawdowns, Spath suggested several other asset classes in a recent client note:

Emerging market debt over emerging market stocks. Much of the EM bond universe carries investment-grade credit ratings while providing yields comparable to U.S. high-yield corporate bonds. EM debt also is less volatile than its equity counterparts in part because of the formers income cushion.

Preferred stocks over financial common stocks. As Andrew Bary highlighted this past weekend, preferreds often are issued by financial institutions but have a better risk-return profile. Preferreds have relatively high yields that cushion against price declines and have a superior risk-return trade-off because of their higher standing in the capital structure.

High-yield bonds over small-cap stocks. These two seemingly disparate asset classes both tend to include domestic companies trying to grow. Their return profiles tend to be similar, but high-yield bonds also have the income cushion to reduce price declines.

But instead of using index-based instruments such as exchange-traded funds to effect these strategies, Spath uses actively managed mutual funds. These sectors tend to be inefficiently priced, unlike the stocks that make up the S&P 500, about which investors arguably have discounted all relevant public information.

High-yield managers can pick among credits rather than being stuck owning the biggest borrowers, which dominate the indexes. Thats especially important with bonds asymmetric risk profile; the upside is limited while the downside could be zero, Spath explains. Even with preferreds, shares with $1,000 par values tend to be less efficiently priced than $25 par preferreds given the broader market for latter among individual investors, she points out.

Among high-yield funds that Sierra favors are BlackRock High Yield Bond (ticker: BHYAX) and Pimco High Yield (PHYAX), both run by esteemed fixed-income managers, which Spath says ought to outperform the popular ETFs, iShares iBoxx $ High Yield Corporate Bond (HYG) and the SPDR Bloomberg Barclays High Yield Bond (JNK).

For EM bonds, she calls out the MFS Emerging Markets Debt fund (MEDAX). And for preferreds, her pick is the Cohen & Steers Preferred Securities Income fund (CPXIX.) All these funds carry top five-star ratings from Morningstar, except the Pimco fund, which gets four stars.

Finally, Spath also puts in a plug for high-yield municipal bonds, which are especially inefficiently priced, in part because some credits get placed in the category simply because they dont have a rating from one of the big credit-ratings firms. But this sector also has been subject to big risks such as the Puerto Rico debt debacle, which is another reason to opt for active management.

Among high-yield muni funds, Spath picks Nuveen High Yield Municipal Bond (NHMAX), managed by longtime muni veteran John Miller. She also likes Invesco Oppenheimer Rochester High-Yield Municipal Bond (ORNAX), which she said navigated through the Puerto Rican crisis by buying the credits that other funds had to dump at fire-sale prices. Both high-yield muni funds get five stars from Morningstar.

So, regardless of what TINAs many fans say, there are alternatives in this market.

Write to Randall W. Forsyth at randall.forsyth@barrons.com

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What to Invest Money in: There Are Lots of Alternatives to Stocks Out There - Barron's

The Arizona Chapter of NAIOP, the commercial real estate development association, announced today that it will oppose the Invest in Education Act, which may appear on the November 2020 ballot, due to its negative impact on small businesses that file taxes under the individual income tax code. The initiative would put a heavy burden on small business owners to pay increased taxes.

The commercial real estate industry relies heavily on economic growth, which is supported by a strong education system that attracts new businesses to Arizona. However, the proposed Invest in Education Act risks damaging the competitive tax and economic environment Arizona has worked to build. NAIOP advocates instead for reinforcing the recovery of Arizonas small businesses to promote the overall good of the economy, which will, in turn, provide resources to public education.

The devastating impact of COVID-19 related closures still wears heavily on many businesses. Employee layoffs, losses in revenue and unanticipated expenses related to the restructuring that took place to protect the health of customers and remaining workers have led to severe financial challenges for many businesses. An increase in taxes would be a further blow to companies trying to rebuild.

We believe a well-educated workforce is essential to the livelihood of Arizona. However, implementing a funding mechanism that singles out a small sliver of taxpayers will have a negative, long-lasting effect on small businesses, said Suzanne Kinney, NAIOP Arizona President and CEO. Reinforcing the economic recovery post-COVID-19, will benefit our public education systems in the long run.

Before the global pandemic, Arizona was among the leading states in the nation for job growth. Focusing on regrowth and recovery will improve state revenues and resources for schools for years to come.

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Here's why Arizona Chapter of NAIOP opposes Invest in Education Act - AZ Big Media

The coronavirus pandemic has forced decision-makers to change their perspective on the economy and adapt to the new normal. In this unprecedented moment, we propose solutions which will trigger a new impulse for development. Micha Kurtyka presents Polands view on the green investment plan.

Micha Kurtyka is the Minister of Climate of the Polish Republic. This opinion piece has been written exclusively for EURACTIV.com.

Polands ambition is to make green investments the pillar of the changes, as they are going to allow to build a modern economy of tomorrow and move closer towards the objectives of the EU climate policy.

The current pandemic has reinforced our belief that the path of transformation leading towards low and zero emissions is absolutely correct. Poland absolutely needs green investments as they are going to help drive the economy, create new jobs and strengthen the competitive advantage of our domestic businesses on the international markets.

Following that path will give us a chance to develop and is going to bring us specific economic benefits. That is why in this year alone, the Ministry of Climate will utilise, for instance, the EU, Norway and national funds, and put PLN 7.8 billion (approximately 2 billion) towards facilitating green investments.

The funds will be used to implement projects related to energy transformation, improving air quality, thermal upgrading of buildings, development of electromobility, investments in RES micro-installations or solutions related to mitigating the effects of drought.

Poland has been consequently supporting the development of renewable energy sources, i.e. in the form of an auction system. Since 2016, new capacities have been contracted a total of 1.7 GW in photovoltaic installations and approximately 3.4 GW in wind farms.

The total value of the support amounted to over PLN 38 billion (approximately 8.7 billion), out of which PLN 37 billion (approximately 8.4 billion) has been put towards new installations.

The auctions planned for this year will result in creating a power output of over 2.4 GW coming from new, green power sources, out of which 800 MW will be generated from wind energy, while 1.5 GW will come from solar power. That fact positions Poland in the first place in the EU in terms of the total area of onshore wind farm construction.

Implementing the new investments will also accelerate the transformation.We are aware of the fact that the coronavirus did not make the problems and challenges of the energy sector disappear.

In the context of Poland, the key issue will be to replace the old coal-fired power stations with zero-emissions power sources installed in onshore and offshore wind power, photovoltaics and low-emission power sources such as natural gas or nuclear power while maintaining energy security.

The scale of the challenges facing our country is incomparable to other EU member states. We believe that climate transformation may be combined with the plan to rebuild the economy after the pandemic, but that requires involving considerable resources in order to make our ambitions become a reality.

Just several years ago, nobody would have thought that Silesia, which for centuries has been a centre of coal mining and an industrial area bringing together numerous energy-intensive industries, would become the centre of the global discussion on the climate policy and the search for the methods to counteract climate change.

The key decisions to protect our planets climate were taken in Katowice during the COP24 summit. What seemed impossible has now become a fact. It showed that Poland is an active participant of the global discussion on climate change and the transformation of economies towards low and zero-carbon emissions.

The concept of Just Transition ensuring environmental protection without slowing down the economy and with due respect to jobs was introduced by Poland.

Our country supports the EUs ambitions regarding achieving climate neutrality by the entire Union until 2050. However, Polands acceptance of the aforementioned commitment as a national goal depends upon the availability of the funding for energy transformation, social acceptance and ensuring that the industry remains competitive.

We cannot allow for a situation in which the costs of the changes will be incumbent upon the weakest, while the industry decides to relocate manufacturing outside of the European Union in fear of additional costs.

Climate ambitions of the European Union must therefore be realistic, i.e. they must account for the effects of the coronavirus pandemic and the situation in the individual countries.

Since the beginning of the discussion on climate neutrality we have been stressing that despite the fact that evolution of the economy and the energy sector is in our best interest, it must be carried out in a responsible manner with care for the poorest.

We should not begin discussions which may increase the burden and hinder the post-pandemic recovery of the economies. Each crisis involves not only challenges but also primarily opportunities for a new beginning and building a future based on new, green, low-emission investments.

Therefore, we welcome the Recovery Fund proposed by the European Commission of an estimated total value of 750 billion which aims, among others, to facilitate economic growth based on green investments.

From the perspective of the transformation of the energy sector, the key role will be played by the increase of the Just Transition Fund from 7.5 to 40 billion, as Poland will become one of its key beneficiaries.

We view the Commissions proposal as an expression of confidence that our country will take active measures towards a low-carbon economy.

We believe that investments in the energy sector, in particular in RES, are required in Poland as well as in the entire EU, as they may significantly drive the impulse for the recovery of the economies after the coronavirus pandemic.

Today, we must think about how to take advantage of the opportunities and the possibilities to increase the pace of the economic transformation in Poland.

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Green investment plan will be an impulse for economic growth - EURACTIV

Some investors see recent volatility as a way to get rich quick. Trying to outsmart the market can end very badly.

Last week, 20-year-old traderAlexander Kearnsusing the Robinhood platform committed suicide after a series of risky options trades left him deep in the red. In the note to his family, he said he had "no clue" what he was doing.

"Financial access without knowledge can destroy lives and, as seen here in its most extreme form, can tragically end them," said Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth.

Still, the number of young investors trying their hand at trading through Robinhood and other major on line brokers has spikedduring the Covid-19 market sell-off and rebound. A spokesperson for Robinhood said they "are deeply saddened to hear this terrible news and we reached out to share our condolences with the family," in an earlier statement to CNBC.

More from Personal Finance Americans appear ready to shop again What happens to your 401(k) loan if you're laid off Tax Day is getting close. Are you ready?

Considered a "generational-buying moment," young and inexperienced investors view the coronavirus-sparked recession as an entry point into the world of investing. Investor newbies are even piling into the beaten down airlines and cruise lines, as well as speculative stocks like Hertz.

The recent tragedy underscores the risk that comes with complicated financial instruments like options trading, which gives a trader the right but not the obligation to buy or sell an asset at a specific price, on or before a certain date. Traders use it to hedge risk, or speculate.

"These are extraordinary complex securities and trading strategies and yet they are readily available to anyone who chooses to open up an account, it's as if we are handing out firearms to children," saidRic Edelman, the founder of Edelman Financial Engines.

As with commodities and other futures investments, "you not only have to be right, you have to be right at the right time," Edelman said.

Commission-free trading coupled with a lack of sports betting and other forms of gambling have all helped drive interest in such speculation by retail investors, who are favoring riskier plays in smaller dollar amounts.

That is also what has propelled trading in the stocks of bankrupt companieslike Hertz.In that case, shares of the car rental company rallied even after the company announced it hadsuspended its plan to sell up to $500 million in stock amid Chapter 11 bankruptcy proceedings.

"The problem with Hertz, specifically, is that the economic value of the shares is zero," said Michael Crook, head of Americas investment strategy at UBS Global Wealth Management.

"There's a very high probability that someone purchasing shares would lose all of their money."

"The overall theme here is mistaking hoopla for investing," Boneparth said.

A better solution is to stay focused on an investment plan rather stock picking, he advised.

Stick with adiversified mixof stocks and stock funds to protect against losses and limit the downfall from some high-risk investments, he said."There's no single asset category that is going to solve all of your problems."

Further, keep your long-term goals in mind. "If you are saving for a home, are you really going to take all, or a big portion, of your home savings and throw it into an investment that could be cut in half?" Boneparth asked.

If there are specific shares you want to own, set aside a portion of your portfolio for those positions, Boneparth said, and research the financial health and well-being of those companies as well as the executive team and future outlook.

"I have plenty of clients that manage a small portfolio of stocks on their own," Boneparth said.

"If with 5% to 10% of your investable assets, you went out and bought 10 companies, it won't be all that bad if you get a couple wrong and couple right," he said. For instance, "if you were wrong about Hertz and right about Tesla."

"If you want to own Hertz, make it half a percent of your net worth, for example," added Crook. "If it's right, and you make 10,000%, you don't need a large position."

The same goes for keeping small positions in other tricky investment plays, includingoil futures contracts andreal estate investment trusts, orREITS,Crook said.

"Almost anything can fit into a portfolio at the right allocation," he said.

Those who are verynear retirementor whohave short-term goalsshould still keep a chunk of their savings in cash, certificates of deposit and high-quality short-term bond funds to further shore up their financial profile.

And finally, consider talking to a financial advisor who can work with you as you review your goals, reassess your risk and come up with an investment strategy that pays.

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Don't let the recession tempt you into these risky investments - CNBC