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Profiling a Successful Investor

Published on: Feb 17 2015

Here’s a profile of a great investor most never heard of. He runs the investment portfolio for Travelers’ Insurance and has done a splendid job. The portfolio and profile are full of surprises. Investing for a conservative insurer is much like investing for a retiree, so many of you can learn a bit from the article.

The financial crisis unleashed tremendous deflationary forces, and central banks and governments responded with inflationary policies. The percentage bet has always been in favor of inflation because “when government wants inflation it usually gets it,” says Heyman. Nevertheless, deflation stubbornly remains a threat. Heyman has tried to position Travelers’ portfolio so that it prospers whichever way things break. He’s got 90% of his assets in bonds. Yes, he’s matching his investment assets with his insurance liabilities, but he has kept duration down to 3.5 years while not reaching for yield and working to keep credit quality pristine. “If things break in favor of inflation, lower duration means you get your money back a little sooner to reinvest at higher rates,” says Heyman. “If things break the other way, it wouldn’t really matter that your duration is a little lower–credit quality would trump everything.”



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