Good trade accounting software continues to be a must for active securities traders.
One person may argue that all index investing is active management because securities are constantly changing within an index.
Active funds turnover securities in an attempt to beat a market and index funds turnover securities in an attempt to track a market.
At the end of fiscal year 2011, the FBI had more than 2, 500 active corporate and securities fraud investigations representing a 47% increase since 2008.
Beginning 16 years ago with the most active stocks, securities authorities required over-the-counter marketmakers to electronically display bids and offers that bettered their own quotes.
In a taxable portfolio holding dozens of funds or securities, overly active tax management can get sloppy and expensive.
Private equity operators start to do deals in an active new issue market for debt securities and equities.
Active managers in intermediate-term securities fared better than managers in long-term securities, and managers in investment grade bonds fared better than managers in high-yield securities.
There may also be little in the way of investment banking expertise that Lloyds can pick up from HBOS, even though the mortgage lender had been very active in trading asset-backed securities before being taken over by Lloyds last year.
Active managers who attempt to pick superior securities or time the market have been underachieving for more than a century.
As I explained in a book I co-authored some time ago, in an environment like this bankers have grown up as abacus bankers, record keepers of money flows who derive income from seigniorage, from the passive creation of money through interest bearing-loans and government-backed securities rather than from true banking, and from active risk management.
In a future post, I will elaborate on how active management is even more essential to specific types of fixed income securities, such as munis.
FORBES: With Bond Yields So Low, Why Should You Pay More For Active Management?
While conclusive truth in the securities markets is impossible to find, the overwhelming evidence suggests that active management reliably generates increased cost, tax, and risk while reducing returns.
FORBES: The Rebirth Of The Snake Oil Salesman On Wall Street
Like others on Wall Street, Goldman had an active mortgage department designing, packaging, securitizing, promoting, and selling mortgage-backed securities and related synthetic derivatives.
Other initiatives under active consideration include global taxes on: gasoline, multinational corporations, carbon dioxide emissions, "securities transactions" and "portfolio investments, " use of air corridors and maritime shipping and currency transactions.
We still do not know how much of this money was actually transferred from the six countries under study (since the Nazis were very active in looting the assets they could find, and especially wanted to lay their hands on foreign securities).
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