The Lies Of Private Equity
While embarking on scenic tours can make life both interesting and exciting, they’re best avoided when it comes to the world of investing. The reason is that most “interesting” investments fail to deliver on their promise of returns sufficient to...
A Close Look At Emerging Markets
There’s an interesting paper from Martijn Cremers, a professor of finance at the University of Notre Dame, on the performance of emerging market stocks that are the publicly traded affiliates of multinational companies. But like so much in the world of...
Stock Pickers Fell Flat In 2013
Last year certainly provided active managers with plenty of opportunities to outperform, and it’s worth examining if they really did. For example, while the S&P 500 Index returned 32.4 percent, Netflix (NLFX), the top performer in the index, returned 297...
The Absolute-Return Rip-Off
Investors would love to be able to achieve positive returns in both bull and bear markets, and that’s the “promise”—or at least the premise—of absolute-return funds.
CalPer’s Private Equity Problem
In an effort to achieve returns that exceed those of the publicly available stock and bond markets, many large pension plans turn to alternative investments such as private equity. California’s CalPers, one of the nation’s largest public pension plans, while using equity index funds for more than one-third of its investments, is increasing its exposure to alternatives.
The Sad Truth About Hedge Funds
There are many well-documented problems with investing in hedge funds, and it's hard to know where to start in pointing them out.
Among them are: lack of liquidity; lack of transparency; loss of control over the asset allocation and thus risk of the portfolio; non-normal distribution of returns (they exhibit excess kurtosis and negative skewness); and they have a high risk of dying (12.3 percent per year from 1994 through 2008).
