The midyear S&P Indices Versus Active (SPIVA) domestic scorecard provides another example of why (at least when it comes to the overall results of active management relative to appropriate benchmarks) the past is, in fact, prologue. Let’s review some of the highlights from the June 2015 scorecard. The table below shows the percentage of active …Read More.
Investing is a unique business. After all, you wouldn’t think of buying any commercial item (like a car) without first negotiating for the lowest price. And few people would consider buying a product if they had no information about its price tag. Yet that is precisely what most investors do. They have no idea how …Read More.
As I observe in my book, “Think, Act, and Invest Like Warren Buffett,” one of the great anomalies in investing is that while investors idolize Warren Buffett, they tend to ignore his advice, especially when it comes to efforts to time the market. The following are just a few of his many “words of wisdom” …Read More.
How financial advisors are compensated doesn’t determine their character, but it does influence their behavior. As the debate over regulatory standards of conduct for financial advisors plays out in Washington, the issue for investors boils down to how their advisors are paid and how well the arrangement aligns the interests of the advisor with their …Read More.
Tim Maurer, director of personal finance for Buckingham and The BAM Alliance, discusses the four key criteria consumers should use to select the most qualified financial advisor for… Read the rest of the article on CNBC. …Read More.
Anthony Anderson is a funny dude. The Emmy-nominated actor has been making people laugh on television and in film for 20 years. But now he’s bringing his sense of humor to a surprisingly unfunny topic—the need for life insurance. The big question I had for him was: Why? Why, with your career exploding and recent …Read More.
A few years ago, a friend of mine who happens to be a really well-known journalist had a conversation with a really well-known academic. Because the conversation was private, I’m not mentioning names. But I did want to share one fascinating part of their discussion. They were talking about cognitive biases. A cognitive bias is …Read More.
Contrary to what most investors believe, empirical studies of corporate bond premia have found that only a small fraction of observed credit spreads can be explained by expected losses from defaults. For example, research has found that the contemporaneous return of the S&P 500 Index is highly significant when determining the changes in credit spreads …Read More.
The financial media loves volatile markets. When the market drops, investors understandably become anxious. They have questions like: What is causing the decline? How low will the market fall? Should I sit on the sidelines until things “settle down”? Are there “defensive stocks” I should buy that will protect me during this period of uncertainty? …Read More.
Psst. Excuse me. I’ve got a secret. I feel like I should be talking really quietly right now, but first I need to warn you. This secret is going to seem incredibly obvious. You may even wonder why I’m going to tell you about it at all. The secret comes in two parts: 1. We …Read More.
In 1981, Sanjoy Basu’s paper, “The Relationship Between Earnings’ Yield, Market Value and Return for NYSE Common Stocks,” found that the positive relationship between the earnings yield (E/P) and average return is left unexplained by market beta. Then, in 1985, Barr Rosenberg, Kenneth Reid and Ronald Lanstein uncovered the positive relationship between average stock returns …Read More.
I’m a huge advocate of the “no shame, no blame” rule when it comes to money. But I think there’s some confusion about how the rule works. It’s not that you won’t feel guilt. It’s also not about avoiding responsibility. Instead, it’s about recognizing the zero-sum game of relying on shame and blame to make …Read More.
The financial media loves volatile markets. When the market drops, investors understandably become anxious. They have questions like: What is causing the decline? How low will the market fall? Should I sit on the sidelines until things “settle down”? Are there “defensive stocks” I should buy that will protect me during this period of uncertainty? …Read More.
The success of the Yale Endowment has been highly publicized, leading many endowments, foundations and more recently, even high net worth individuals, to consider adopting the so-called Yale Model. The Yale Model includes a focus on alternative investments and attempts to capture the liquidity premium available in illiquid investments (such as private equity). In addition …Read More.
The success of the Yale Endowment has been highly publicized, leading many endowments, foundations and more recently, even high net worth individuals, to consider adopting the so-called Yale Model. The Yale Model includes a focus on alternative investments and attempts to capture the liquidity premium available in illiquid investments (such as private equity). In addition …Read More.