Additional Thoughts on the Rising Glidepath Approach
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Market Expectations for Interest Rate Increases
Q: Should you stay invested in the short term while waiting for interest rates to rise? A: First, other than very short-term interest rates that are heavily influenced by the Federal Reserve, it’s difficult to predict changes in interest rates....
The Volatility Of Premiums
The stock premium, the annual average return of stocks minus the annual average return of one-month Treasury bills, has historically been high. This fact has, understandably, attracted investors to the stock market. For the period 1927-2013, the stock premium averaged...
British Documentary Skewers Active Management
A new multi-part British documentary, How to Win the Loser’s Game, takes a hard look at active management. Although done with typical understatement, the results are not pretty. The complete documentary will not be available until Nov. 5. But you...
Debunking 8 Common Investing Myths
You don’t need to pick stocks or eschew all risk to be a good investor. Convenient truths vs. evidence-based investing It’s easy for investors to absorb myths on best investing practices from the media and financial pundits. That’s why it’s...
Using Factors To Weather Storms
Today we’ll take a look at how the size and value premiums performed in 12 recessions, identified as such by the National Bureau of Economic Research, occurring in the post-World War II era. During that period, the average length of...
The Real Danger In Overstating Returns (Like PIMCO)
As if PIMCO needed any more bad press, The Wall Street Journal reported this week that the Securities and Exchange Commission is investigating whether the bond giant “artificially boosted the returns of a popular fund aimed at small investors.” While...
What Predictions by Economists Can Teach You About Investing
An interesting article in Bloomberg noted that the recovery in this year’s Treasury market has been stronger than the rally predicted by every economist they queried in a recent survey. In mid-August, Bloomberg contacted 66 economists for their Sept. 30...
Problems With Technical Analysis
There is a wide body of evidence demonstrating the existence of momentum not only in stocks, but across asset classes. There’s also evidence that moving-average indicators provide higher risk-adjusted stock returns in recessions. On the other hand, while major data...
3 Contrarian Views About Investing
I am sometimes described as “contrary.” Actually, the more commonly used terms are “opinionated,” “arbitrary” and “judgmental.” There may be varying degrees of truth to all of them. Today, however, rather than temper or minimize my “contrarian” views, I’ve decided...
