Highest Expected Returns Not Always Best
A regular reader of my articles contacted me recently to discuss current valuations and a value-oriented strategy. He observed: “It doesn’t matter which approach you like: a value investor doesn’t prefer U.S. stocks now.” He also pointed out that, while...
Misleading “Debates” on Active vs. Passive Harm Investors
While it’s a low bar, Bloomberg TV always seemed to me to be the best of the financial media. Its anchors are professional and knowledgeable. Its coverage is broad and responsible. It avoids the hype and sensationalism typical of many...
Let Go of Irrational Fears
When we talk about the chances of something bad happening, people tend to fall into three general groups. ■The Numbers Don’t Matter No matter the odds, this group dismisses the statistics. People insist they can trust their gut. I suspect...
Quick Take: What Is a Bond Ladder
Blerina Hysi, Fixed Income Portfolio Advisor, BAM Advisor Services Laddered bond portfolios can be customized to meet each investor’s unique needs. Plus, they help reduce the risk associated with investing in fixed income. Fixed Income Portfolio Advisor Blerina Hysi on...
What Your Financial Advisor Needs to Know About Your Brain
Behavioral economist Richard Thaler explains why financial professionals need to be familiar with psychology. Daniel Kahneman and Amos Tversky legitimized behavioral economics—the study of how people really behave around money, as opposed to how economists say a rational person ought...
The S&P Active vs. Passive Scorecard: Global Evidence
While the debate over the merits of active versus passive investing is ongoing, there has been a very clear trend spanning several decades now showing that investors are slowly (but steadily) abandoning the hope of outperformance offered by active management...
What are agency bonds?
Quick Take on Fixed Income November 2015 Question: What are agency bonds? Answer: Agency bonds are securities issued by two types of entities: 1) government-sponsored enterprises (GSEs), which usually are federally chartered but privately owned corporations; and 2) federal government...
Dividends An Illogical Preference
A large body of literature examines whether managers of actively managed funds add value to their investors by generating abnormal returns. Unfortunately, not only do the vast majority fail to do so, but the evidence, as presented in my book,...
Valuation Metrics In Perspective
It’s well-established in the literature that valuation metrics—such as the dividend yield (D/P) and the earnings yield (E/P), as well as its cousin, the Shiller CAPE 10—provide important information in terms of future expected returns. In fact, these metrics are...
Required Reading for Investors
Jane Bryant Quinn, a highly regarded and nationally syndicated columnist, once called much of the output of Wall Street and the trade publications that cover financial markets “investment porn.” She summed it up this way: “Americans are indulging themselves in...
