Is it OK to keep your assets with one fund family?
One of the more frequently asked questions I get is about the need to diversify across mutual fund or exchange-traded fund providers: Is there risk in having all your eggs in one fund family’s basket? This question became even more...
How the mutual fund graveyard can hurt investors
The tendency for mutual fund companies to drop poorly performing funds when calculating historical return data is a major problem for unsuspecting investors, and it’s known as survivorship bias. An investor selecting mutual funds today is choosing from a list...
Should People Listen To John Hussman’s Forecasts?
In my book, Think, Act, and Invest Like Warren Buffett, I noted that the Oracle of Omaha advised investors: “We have long felt that the only value of stock forecasters is to make fortune-tellers look good. Even now, Charlie (Munger) and I...
Should You Include International Bonds In Your Portfolio? – Part I
Today begins a two-part series on international bonds and whether or not they belong in your portfolio. Broad diversification of risk is one of the prudent rules of investing – since it’s the only free lunch in investing, you might...
Should You Include International Bonds In Your Portfolio? – Part II
Today we continue our discussion on international bonds. We’ll begin with a Vanguard study. Vanguard reached the same conclusions we discussed in yesterday’s post in their February 2014 research paper “Global fixed income: Considerations for U.S. Investors.” The paper states: For the...
Is The Stock Market ‘Overgrazed’?
There’s an interesting new paper by Claude Erb, “Has the Stock Market Been Overgrazed?” He begins with noting that over time (since the 1920s), the beta, size and value premiums have all declined. He then asks: “What if too many...
Rethinking Dividend Strategies
During bear markets, the dividends thrown off by companies provide the cash flow required, while a total-return approach requires one to sell shares to provide the cash flow—a clear advantage of dividend-focused strategies that those who favor them are quick...
‘Value’ Fueled By Behavior Bias
The financial equivalent of the Miller Lite, “tastes great, less filling,” debate is between traditional finance (which uses risk theories to explain asset pricing), and the newer behavioral finance field (which uses human behavior to provide the explanations). Unfortunately, there’s...
A Risk-free Investment With High Expected Returns
For much of the past decade, I have been on a mission to persuade you to fundamentally change the way you invest. It’s my firmly held view that the road to financial perdition begins with a call to a broker...
The Scarcity Fallacy: Is Less Really More?
Having the privilege of walking through life with people vocationally, aiding in the acquisition, maintenance and dispossession of earthly resources as a financial advisor, I’m burdened with a heightened sense of the battling spirits of scarcity and abundance. The dehumanizing...
