Traditional retirement planning calls for gradually reducing an investor’s equity allocation and increasing the allocation to safe bonds. Perhaps the most well-known example of this concept is the adage that your stock allocation should be equal to 100 minus your age (or with now-longer life expectancies, 110 minus your age). The gradually declining equity (DE) …Read More.
There’s extensive literature documenting that value stocks (the stocks of companies with low prices relative to a valuation metric, such as earnings, book value, cash flow or sales) possess a strong, persistent and pervasive tendency to outperform growth stocks. While there’s no debate about the existence of the value premium, there’s a major debate about …Read More.
Do you have a generally positive or negative impression of the word “retirement”? I ask because it dovetails nicely with a series of questions (inspired by Rick Kahler) that I use to begin most speaking engagements. These questions are designed to incite self-awareness, offering us clues about how our life experiences have shaped the (often unarticulated …Read More.
Socially responsible investing (SRI) aligns ethical and financial concerns for investors. SRI has gradually developed over time to include the consideration of firms’ environmental, social and governance (ESG) performance. Of note is that, while SRI has evolved, the original practice of negative screening for the stocks of companies involved in harmful or controversial activities (so-called …Read More.
What is the one thing that, if you could just get your hands on it, would make you much happier? Go ahead. Get out a piece of paper and write down the first thing that pops into your head. Got it? Read the rest of the article on The New York Times. …Read More.
Bond ladders are frequently criticized in the financial media and even among some professional advisors (who, I would point out, are often able to use only bond mutual funds or ETFs). Earlier this week, we corrected some common misperceptions regarding individually tailored laddered municipal bond portfolios. Today we’ll move on to the many advantages of …Read More.
A number of articles were written at the end of 2008 noting the fact that, for the prior 40-year period, stocks had not outperformed safer bonds. For the period 1969 through 2008, the S&P 500 Index returned 9%, and so did long-term (20-year) Treasury bonds. Results for large-cap growth and small-cap growth stocks were even …Read More.
Traditional retirement planning calls for gradually reducing an investor’s equity allocation and increasing the allocation to safe bonds. Perhaps the most well-known example of this concept is the adage that your stock allocation should be equal to 100 minus your age (or with now-longer life expectancies, 110 minus your age). The gradually declining equity (DE) …Read More.
Portfolio-based risk factors are identified through diversified, zero-cost, long/short portfolios that may link stock returns to systematic risk. There is a substantial amount of evidence in the academic literature that some portfolio-based risk factors explain well the cross section of stock returns. Using a size factor and value factor in addition to the market factor, …Read More.
Two of the most powerful explanatory factors in finance are value and momentum. Research on both has been published for more than 20 years. However, it was not until recently that the two have been studied in combination and across markets. The study “Value and Momentum Everywhere” by Clifford Asness, Tobias Moskowitz and Lasse Pedersen, …Read More.
Nobel laureate Milton Friedman is generally credited with stating, “There’s no such thing as a free lunch.” Actually, if you know what you are doing, you can get a free lunch in investing. Unfortunately, most investors get stuck with very expensive meals. Diversification is a free lunch Diversification is a free lunch. It basically refers …Read More.
Nobel laureate Milton Friedman is generally credited with stating, “There’s no such thing as a free lunch.” Actually, if you know what you are doing, you can get a free lunch in investing. Unfortunately, most investors get stuck with very expensive meals. Diversification is a free lunch Diversification is a free lunch. It basically refers to the …Read More.
My wife and I are setting up a customs screening station in our driveway. No, we’re not starting an international airport. And it’s not for solicitors, strangers or gift-bearing guests. It’s for us and our stuff. From now on, before anything new comes into the house, resident buyers will need to answer a series of …Read More.
Charleston, South Carolina. According to Travel + Leisure magazine, “Charleston is a remarkably dynamic place, so it’s no surprise that it has achieved its highest ranking ever in our survey as the year’s best city in the world.” It’s the first time a U.S. city has received the top honor, but Charleston ranked No. 2 last year and …Read More.
Bond ladders are frequently criticized in the financial media and even among some professional advisors (who, I would point out, are often able to use only bond mutual funds or ETFs). Earlier this week, we corrected some common misperceptions regarding individually tailored laddered municipal bond portfolios. Today we’ll move on to the many advantages of owning …Read More.
