Does Firing Money Managers Lead to Improved Performance?
Leonard Kostovetsky and Jerold Warner, the authors of the study You’re Fired! New Evidence on Portfolio Manager Turnover and Performance, which was published in the August 2015 issue of the Journal of Financial and Quantitative Analysis, contribute to the literature...
Outsourcing Management: Does It Improve the Performance of Mutual Funds?
From 1980 to 2014, the percentage of American households that owned mutual funds rose from 5.7 percent to 43.4 percent. At the beginning of 1980, mutual funds held only around 4 percent of all U.S. equity. However, that figure is...
The Two Types of Risks Every Investor Must Understand
As markets start off the new year with a global slide in prices, you may want to re-acquaint yourself with a concept often found in standard introductory courses on economics–the difference between systematic and nonsystematic risk. Your retirement assets could...
Why Investors Need to Embrace Bear Markets
Suppose you had a friend whose lifelong dream was to travel overseas. But this friend was deathly afraid of experiencing turbulence on an airplane. So he decided to forgo his trip until a new plane was invented, one able to...
Private Equity Not Worth Fees
The headline of a December article in The New York Times declared: “Private Equity Fees Are Sky-High, Yes, but Look at Those Returns.” The author, Steven Davidoff Solomon, was making the case that while “critics love to complain about private...
Scoring 2015’s ‘Sure Things’
At the start of 2015, I put together a list of predictions that financial “gurus” had made for the upcoming year, especially the ones that gained consensus as “sure things.” I then kept track, through a series of periodic updates,...
Evaluating Hartford’s Performance
How do some of the market’s most recognizable active mutual fund families stack up to a comparable passive counterpart? To explore that question, I’ll continue my evaluation of active fund performance with an in-depth look the Hartford family of funds...
Correcting the adviser-client disconnect over the definition of risk
When we say the word “risk” to clients, we’re most often thinking of technical things. Like volatility or standard deviation. But when clients hear the word “risk,” they’re thinking of the chances they’ll run out of money or fail to...
Gurus’ ‘Sure Things’ For 2016
Every year, I like to keep track of the predictions that “gurus” and other market observers make for the upcoming year, specifically the ones that they say are “sure things.” It seems like no one in the financial media holds...
‘The Big Short’: A Big Wake-Up Call
I agree with the glowing reviews of The Big Short. The film does a wonderful job of exposing the mendacity of the financial industry and the role it played in almost causing a worldwide economic collapse. Its depiction of Wall...
