Deconstructing Invesco’s Performance
The February 9 edition of Barron’s contained its annual listing of “best fund families” for the past one, five and 10 calendar years. Of all the fund families on the list, Invesco was the only one that managed to make...
Investors Pay Premiums For Bad Bets
The first formal asset pricing model—the capital asset pricing model—was built on certain assumptions, including that investors are risk-averse; will maximize the expected utility of absolute wealth; and care only about the mean and variance of return. However, academic research...
A Must-Read For Serious Investors
As the director of research for The BAM Alliance, and the author and co-author of 15 investment books, I’m often asked about other books I would recommend. For serious investors who want to gain a deeper understanding of how markets...
Active Inefficiency Excuse Hollow
Even many advocates of active management will concede that the efficiency of the market for U.S. large-cap stocks is so great that attempts to add value (generate alpha) through individual stock selection and/or market timing are unlikely to produce positive...
Level: Can A Budgeting App Change the Way We Bank?
“Level is dedicated to rewriting the financial rulebook to create a secure future for the next generation.” That’s budgeting app Level Money’s stated mission, which can be found on their website’s “About Us” page. But even as lofty as that...
The Phony Fiduciary ‘Debate’
The battle over the legal standard to which advisors should be held when giving investment advice has two fronts: Advice given by advisors to retirement plans and advice given by advisors to everyone else, including individual investors. The position of...
The Wrong Place and Time to Have a Money Conversation
A few weeks ago, I got home late after a long trip. I’d been traveling a lot recently and didn’t sleep well that night. The next morning, I woke up and felt like I’d been hit by a truck. Emotionally,...
Momentum Across Time & Asset Classes
The academic study of price momentum has intensified considerably since 1993, the year Narasimhan Jegadeesh and Sheridan Titman’s paper, “Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency,” appeared in The Journal of Finance. The authors found...
Costs Undermine Active Investment
Unit investment trusts (UITs) are SEC-regulated investment vehicles in which a portfolio of securities is selected by a sponsor and then deposited into a trust. Assets held in UITs have grown steadily since the financial crisis, increasing from about $20...
This Test Proves You’re Overconfident
Much has been written about the perils of overconfidence in investing. Nobel laureate Daniel Kahneman reported one compelling study in his book, Thinking, Fast and Slow. CFOs are overconfident You might think CFOs of large corporations would have valuable insight...
