There are more, but Eric Rosenbaum captures the essence – that age-based investing “rules of thumb” are more about expediency for the financial services industry than usefullness for investors. Read the full article >>
“Smart Beta” is all the rage right now, and is being relentlessly promoted by virtually every firm on Wall Street. Unfortunately, as Elisabeth Kashner points out, “Whether you look at one-, three- or five-year performance, these 11 U.S. large-cap smart-beta funds have produced returns in line with their risks. No more, no less. Whether you Read more about Smart Beta: No Alpha Here![…]
Henry Blodget’s “Aha! Moment”: “When I finally realized that no one knows what the market is going to do, I developed a very different philosophy about money management — including, importantly, the management of my own money (some of which I had vaporized by overestimating my own odds of knowing what the market was going Read more about No One Knows What the Market Will Do[…]
Phil DeMuth discusses a possible breakthrough for factor-based investors known as “Profitability”. “Over time, tilts towards value, momentum and profitability have outperformed the market, and due to the diversification benefits, a combined portfolio of these three has provided much higher reward per unit of risk and a significant reduction in extreme risk or losses. Thus, Read more about The Profitability Factor[…]
This Vanguard whitepaper discusses the use of global bonds in a rising-rate environment. “Although investors cannot control when and by how much their domestic interest rates may rise, they can help mitigate the associated risk by more broadly diversifying their fixed income holdings. Christopher B. Philips and Charles J. Thomas show that during periods of Read more about Fearful of Rising Interest Rates? Try this![…]
Ian Ayres and Barry Nalebuff demonstrate the significant benefits of buying equities early in life, even if leverage is involved. The original research is here, a much more accessible article can be found here, and their website can be found here.