It's amazing what you acn learn during a fishing trip in Maine.

During one such recent trip, Barrons' Richard Rescigno chatted Cumberland Advisors CEO and CIO, David Kotok to discuss the executive's views on the equity markets.

Kotok's opinions are worth noting. His firm's U.S. stock accounts have been up 2.5 percent compared to 1.7 percent for the S&P 500 from 1999 through 2012 and up 22 percent to 19 percent of the S&P this year, Rescigno writes.

Kotok spoke to the advantages of offering separate accounts for stocks using ETFs only. Resicgno quotes Kotok as saying, "One reason is you can't get a legal informational advantage on a single stock. You can have an illegal one by getting inside information, but if you play by the rules, you either know what everyone else knows, or you've missed something, at which case you're at a disadvantage. In addition, ETFs are tax-efficient, and with just six or seven broad-based ones, you can capture nearly all of the equity market's movement…"

On municipal bonds, Kotok said he prefers Utah municipal bonds to Illinois' municipal bonds because asset managers can hope to grab onto Illinois' extra yield, which yields 100 bps, one percentage point higher than Utah, but Illinois has the worst state credit in the country, while Utah is a triple-A credit, Rescigno writes.

To read more, click here.  

Edited by: Casey Quinlan


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