How To Define Passive Investment
Recently, I heard Nobel Prize-winner and finance professor Eugene Fama define “active management” as any fund that engages in security selection and/or market timing. And actively managed funds are fairly easy to identify. As we know, the term “passively managed”...
Stressed-out Gen X and the search for a more ‘livable’ life
“We’re just overwhelmed with life.” That was my response to an attorney looking for insight into the obstacles facing Generation X. I’d referred a number of 30- and 40-something financial-planning clients to this attorney. All were in need of estate-planning...
Add This to Your Busy Schedule: Time With Family and Friends
If I ask, “How are you today?” I already have a good idea what you’ll say. “Busy.” We’re all busy. It’s reached the point that many of us wear our busyness like a badge of honor. And what better way...
Shorting’s Costly Complexities
The important economic role played by short-sellers has received increasing academic attention in recent years. The research has demonstrated that short-sellers, as a group, are key market intermediaries that improve the informational efficiency of prices, increase market liquidity and, by...
5 Bond Myths Investors Should Know
Investing is often made more complicated than necessary by the financial media and the self-styled “experts” featured in its coverage. So maybe it’s not surprising that, for many investors, bonds are a commonly misunderstood subject, because they really are even...
Revisiting Anomalies’ Persistence
An article I wrote in September discussed the findings of the study, “Benchmarks as Limits to Arbitrage: Understanding the Low-Volatility Anomaly,” in which the authors proposed a new explanation for why anomalies (such as the low-beta/low-volatility anomaly) persist. They hypothesized...
8 Smart Tax Moves for Investors
Retain more of your investment income with savvy tax planning. Good investors are good tax planners. Tax planning isn’t as fun as investing – or fun at all – but it helps you keep as much of that hard-won investment...
The Shorting Premium Puzzle
There are a number of well-documented anomalies that cause problems for the efficient markets hypothesis (EMH). These problems arise because the EMH assumes any mispricing in the market will be arbitraged away by rational traders who buy relatively undervalued assets...
Don’t Rely On These ‘Professional’ Investors
By definition, being a “professional” means your level of expertise is greater than that of amateurs. It would be surprising if professional golfer Phil Mickelson routinely posted lower scores than the average weekend player. Do you really believe the tennis...
Why Buy Individual Stocks?
Individual stock ownership provides both the hope of great returns (for example, if you were to early on discover the next Google) as well as the potential for disastrous results (you could end up with a significant holding in the...
