Hedge Funds Flop. Again.
Today marks the final installment in my series addressing the lessons that the markets taught us last year about prudent investment strategies. As we noted previously, 2014 provided us with a total of 12. You may have observed by now...
Plan Sponsors’ Weak Returns
Institutional plan sponsors are charged with investing trillions of dollars on behalf of pension plans, endowments and foundations. As a result, the quality of the investment decisions made by these plan sponsors is of great interest and importance to a...
Recency Bias Damages Returns
One of the more common and costly investing mistakes that individuals tend to make involves the behavior known as “recency,” which can be described as the bias toward overweighting recent events or trends, and ignoring long-term evidence. Recency leads investors...
Last Year’s Financial Predictions
At the start 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. This marks our...
Investment Lessons From 2014
Every year, the markets provide us with some valuable lessons about prudent investment strategies. Many times, the markets offer investors a remedial course that covers lessons it had imparted previously. That’s why I like to say there’s really nothing new...
The Cost Of Perfect Crystal Balls
Last week, we discussed the first three of a total 12 lessons that the markets taught us in 2014 about prudent investment strategies. Today we’ll cover lessons Nos. 4 through 6. Many of these lessons appear year after year. But...
A Close Look At Zweig’s TIPS Tip
In an article on Jan. 9, Wall Street Journal columnist Jason Zweig recommended that investors purchase more Treasury Inflation-Protected Securities (TIPS). That article, and Zweig’s recommendation, has resulted in a lot of questions from both clients and advisors. So I...
Forecast Follies, 2015 Edition
I like to keep track of the financial forecasts people make for an upcoming year, especially the ones that gain consensus as “sure things.” Sometimes it seems like too few are willing to hold the financial media—or the “gurus” who...
How To Define Passive Investment
Recently, I heard Nobel Prize-winner and finance professor Eugene Fama define “active management” as any fund that engages in security selection and/or market timing. And actively managed funds are fairly easy to identify. As we know, the term “passively managed”...
Shorting’s Costly Complexities
The important economic role played by short-sellers has received increasing academic attention in recent years. The research has demonstrated that short-sellers, as a group, are key market intermediaries that improve the informational efficiency of prices, increase market liquidity and, by...
