A Simple Strategy Your Broker Hopes You Won’t Learn
The data is irrefutable. There’s a direct correlation between low fees and higher expected returns. Two recent studies from Morningstar bring this point home in a powerful way. The significance of low fees Read the rest of the article at...
Choose Experiences Over Stuff, and Maybe Over Security Too
You’ve heard of the American dream, right? The American dream was this machine we built to get rid of uncertainty and create security. It’s the white picket fence, the job and the minivan. You watch Dan Rather and a sitcom....
Fiduciary Duty Defeats ‘Phishing’
Classical economic theory suggests that free markets, in which individuals each act according to their self-interest, yield the best of all possible worlds. All one has to do is look around at places like Cuba and North Korea to see...
Equity Offerings & Tail Risk
It’s logical to believe that corporate managers have a preference for issuing equity at times they perceive their firm’s stock price is overvalued or high relative to some benchmark (such as price-to-earnings ratio or book-to-market ratio). The academic research on...
More On The Bad News Delay
Earlier this week, we discussed a March 2016 study by Rodney Boehme, Veljko Fotak and Anthony May, “Crash Risk and Seasoned Equity Offerings,” which provided evidence that companies will tend to withhold (and accumulate) bad news for an extended period...
Rip-offs on a Massive Scale
Why settle for ruining the retirement dreams of one individual investor at a time when doing so on a massive scale is far more lucrative? That seems to be the strategy of some retirement plan sponsors, consultants, endowments and their...
The Paradox of Finding Motivation Through Fear
I was driving with a friend recently and telling him about some projects that really excited me. I mentioned a new book I’m working on, an article I’m writing and this new hobby of adventure motorcycling in the desert. He...
A Bold Way to Pick Winners
It’s a mystery to me why so many investors pay brokers to pick “winning” mutual funds. But they do, and it turns out that they aren’t alone in this often fruitless quest. Pension funds pay obscene fees to “consultants” who claim the...
Annuities and Problems of Longevity
As the director of research for The BAM ALLIANCE, I frequently receive questions related to the advisability of purchasing payout annuities (as opposed to variable annuities, which I generally categorize as products meant to be sold, not bought). Combine the...
Why Alt Funds Underperform
The financial crisis of 2008, when all risky asset classes suffered dramatic losses, led many investors to seek out “alternative” investments that claimed to provide downside protection, or positive returns independent of the market environment. This resulted in the introduction...
