Over the last few years we’ve seen a dramatic increase in interest in dividend-paying stocks. The heightened interest has been fueled by both the media hype and the current regime of interest rates that are well below historical averages. The low yields available on safe bonds led even many once-conservative investors to shift …Read More.
Hedged (long/short) mutual funds are the money management industry’s answer to illiquid hedge fund strategies. The premise of long/short funds is that the managers can apply their security-selection skills to a broader opportunity set, which is to say they can go both long and short, instead of long only. The broader opportunity set should make …Read More.
If you are a regular reader of my blog, you know I recommend against buying anyactively managed mutual fund. Instead, I advise investing in a globally diversified portfolio of low-management-fee index funds, passively managed funds or exchange-traded funds (ETFs), in an asset allocation suitable for you. Investors are looking at the data and getting the message. According …Read More.
There was much hand-wringing about the poor stock market returns in January. The financial media engaged in its usual frenzy of speculation about whether these results meant we were in for a “correction” or worse. Typical of the financial babble about the “significance” of January returns is this silly observation by Matt King, chief investment officer at …Read More.
Frederic Mishkin was in a bind. In January 2008, his wife wanted to buy a house, but as we all know now, the housing market was in the midst of a crash. More than one person probably shared similar doubts with friends around the same time, but Mr. Mishkin is a little different. He told …Read More.
This past October, as I was flying back from Florida, I tried to wrap my mind around how a family birthday party resulted in tears and surprise after my mom suggested that she and my dad wanted to move in with my brother and his family. Shortly after returning to Buffalo, I called my mom …Read More.
In this video, Larry Swedroe reviews lessons from 2013. Lessons from 2013 with Larry Swedroe from The BAM ALLIANCE on Vimeo. Copyright © 2014, The BAM ALLIANCE. This material and any opinions contained are derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. The content of …Read More.
Socially responsible investing (SRI) has been referred to as “double-bottom-line” investing. The implication is that you are seeking not only profitable investments, but also investments that meet your personal standards. Faith-Based Funds (FBF) can be viewed as a subset of SRI. While SRI applies screens on secular social concerns, FBF screens investments based on the …Read More.
Whether they go by such names as “unconstrained,” “tactical asset allocation,” “absolute return,” or “go anywhere,” Wall Street touts the advantages of funds that have the freedom to shift asset allocations to wherever they see the best opportunities. It certainly sounds appealing. And investors must believe these funds have advantages as the number of such …Read More.
While embarking on scenic tours can make life both interesting and exciting, they’re best avoided when it comes to the world of investing. The reason is that most “interesting” investments fail to deliver on their promise of returns sufficient to compensate for their incremental risks. This has been especially true of hedge funds. And it …Read More.
There’s an interesting paper from Martijn Cremers, a professor of finance at the University of Notre Dame, on the performance of emerging market stocks that are the publicly traded affiliates of multinational companies. But like so much in the world of investing, Cremers’ findings, while certainly alluring, need to be examined closely before investors jump into …Read More.
Last year certainly provided active managers with plenty of opportunities to outperform, and it’s worth examining if they really did. For example, while the S&P 500 Index returned 32.4 percent, Netflix (NLFX), the top performer in the index, returned 297 percent. Two other stocks, Micron Technology (MU) and Best Buy Co. (BBY) returned more than …Read More.
The most common misconception among investors may be the value of investing in dividend-paying stocks. Almost every week, someone contacts me to extol the virtues of investing in what they call “high quality, dividend-yielding securities.” Often, their interest is spurred by the recent high performance of these stocks. According to one paper by Gregg S. Fisher, published …Read More.
Proponents of alternative investments (like hedge funds) have a very effective presentation. They claim these investments have low volatility (risk), offer excellent risk-adjusted returns, and don’t correlate well with stocks or bonds, thereby providing a “hedge” in troubled times. These proponents demonstrate the accuracy of these claims with compelling statistics, displayed in impressive marketing materials. …Read More.
You should never make investing decisions based on what the market is doing, except for now, maybe. Past experience and reams of studies tell us there is no way to time the market and that we should buy and hold. That said, there are a few exceptions to the rule. With the total United States …Read More.
