Why it doesn’t pay to chase fund performance
One of the most important investment decisions you make is in determining your asset allocation, or how you choose to divide your assets between risky and safe investments. Another key decision concerns which strategy to use when selecting the funds...
Here’s the latest failing grade for active funds
No one has a clear crystal ball allowing them to accurately forecast the future. So, it’s a good thing that predicting the results of Standard & Poor’s twice-yearly active-versus-passive scorecard doesn’t seem to require one. It’s a pretty safe bet...
Investing habits: The good and the bad
Choosing good investments is a necessary condition for successful investing. But it’s also important to engage in good behavior once those investments have been selected. The most recent issue of AQR Capital Management’s quarterly newsletter for clients provides great insight...
Markets keep defying experts and the news
On Aug. 25, the S&P 500 index closed above 2,000 for the first time — finishing at 2,000.24. It had taken the index more than 16 years to double from its first close above 1,000 on Feb. 2, 1998, when...
Index investing still wins in emerging markets
A regular reader sent me the following email: “If you get the chance, I would appreciate you including a piece about whether the Franklin Templeton Developing Markets (TEDMX) fund adds value. Its manager, Mark Mobius, is always quoted as the...
Don’t-miss reads for investors
It’s not too late to make some summer reading recommendations, and a quick review of my bookcase turned up some titles I think would be valuable for any investor. These books cover topics ranging from a detailed explanation of how...
Actively managed funds flop in Europe, too
For more than a decade now, Standard & Poor’s has been contributing to the debate over active versus passive investing by producing its S&P Indices Versus Active Funds, or SPIVA, scorecards. These twice-yearly scorecards evaluate the evidence concerning the performance...
Avoid this mistake about global diversification
Don’t get stuck in your own backyard. Investors should consider building globally diversified equity portfolios that avoid the persistent and worldwide phenomenon of home-country bias. That’s when you allocate a greater weight to your home-country stocks than their percentage of...
Will retiring boomers spark a stock bust?
As if equity investors didn’t already have enough to worry about, one of the new concerns getting a lot of attention recently is that the baby boomer cohort — now starting to retire — will fund their retirement by selling...
10 “sure things” for 2014: Not so much
At the beginning of each year, I compile a list of predictions that financial gurus and industry experts tell us are a “sure thing.” And each year, I track how many of these predictions actually come true. So, it’s now...
