Study Puts Another Nail in Active Management’s Coffin
An ongoing debate among investors is whether an active or passive strategy is most likely to give you the best results. Twice a year, Standard & Poor’s releases their active vs passive score card (officially called the S&P Indices Versus Active Fund...
Concerned About Falling Dollar: What to Do?
My last post addressed the concerns investors had about the dollar potentially losing its status as a reserve currency. Today, we’ll take a look at what actions you might consider taking if that was a risk about which you are concerned....
The Rally Nobody Noticed: Municipal Bonds
Historically, in terms of yields, because of their federal tax exemption, AAA-rated municipal bonds have traded at a discount to Treasuries. Over the long term, AAA-rated intermediate-term municipal bond yields have typically traded between 75-85 percent of the yields on...
A Closer Look at CAPE Ratio
When estimating returns, we know that current valuations provide valuable information. The earnings yield derived from the Shiller CAPE 10—the cyclically adjusted price-to-earnings ratio—is considered by many to be at least as good, if not better, than other metrics. It...
Beware Lure of Market Timing
Market-timing strategies attempt to outperform a buy-and-hold strategy by anticipating the future direction of a market. They can work, but mostly they don’t. First, such strategies are based on the belief that future security prices are predictable, typically through the...
Risk & The Two Faces Of Beta
There’s a growing body of evidence that beta is actually a two-sided, not a one-sided, “coin,” and those two faces are separated by perceptions of risk. Being risk averse, most investors care more than just about the standard deviation of...
Perspective on High-Frequency Trading
I have received a number of questions since “60 Minutes” ran a piece on high-frequency trading (HFT)on March 30 (lest we forget, this is the same “60 Minutes” that ran a piece in 2010 that predicted the municipal market would implode...
How The Supreme Court Could Stop the 401(k) Rip-off
The Supreme Court of the United States has indicated an interest in deciding an important 401(k) case, Tibble v. Edison International. If the Supreme Court decides to hear the Tibble case, and if it decides it in a manner that...
Find the Needles in the Financial Pornography Haystack
It’s unfortunate that most of what passes for financial news is misleading and harmful to investors. It consists of supremely confident “financial gurus” predicting the future. They are either warning us of an imminent crash or observing that a bull...
What You Can Learn From Bill Gross And PIMCO’s Troubles
“Trouble. Trouble, trouble, trouble, trouble.” Reading all the news about Bill Gross and PIMCO, I keep hearing that Ray LaMontagne song in my head. (Go ahead—give it a listen while you read this, just for fun.) The king of bonds isn’t yet abdicating...
