The Efficient Market Hypothesis, Fact Or Fiction? Part 1
Today begins a four-part series on the efficient market hypothesis. We’ll begin with a brief history and explanation of the EMH. Eugene Fama, recent recipient of the Nobel Prize in economics, is considered the father of the efficient-market hypothesis (EMH)....
What Exactly Is Risk: Part II
Today concludes our two-part feature that aims to define risk. Not being able to do so is a problem for both advisors and investors. Alternative Definition of Risk Risk can also be defined as the probability of not achieving your financial objective...
What Exactly Is Risk?
This is the first of a two part series that aims to define risk. Since we live in a world without crystal balls that allow us to clearly see the future, prudent investing is all about the management of risk...
The Efficient Market Hypothesis, Fact Or Fiction? Part 3
Part one of our series introduced the efficient market hypothesis. Part twoexplored evidence in the mutual fund and pension plan worlds that showed that while the EMH fails all the tests of efficiency, it passes the only test that really matters –...
The Efficient Market Hypothesis, Fact Or Fiction? Part 2
Yesterday, we discussed the history and overview of the efficient market hypothesis. Today we’ll look at some of the evidence on the efforts of mutual funds and pension plans to generate alpha. Mutual Funds Each year, Standard & Poor’s publishes its Indices...
The Efficient Market Hypothesis, Fact Or Fiction? Part 1
Today begins a four-part series on the efficient market hypothesis. We’ll begin with a brief history and explanation of the EMH. Eugene Fama, recent recipient of the Nobel Prize in economics, is considered the father of the efficient-market hypothesis (EMH)....
The Impact of High-Frequency Traders
The recent appearance of Michael Lewis, author of Flash Boys: A Wall Street Revolt, on 60 Minutes, created quite a stir about the impact of high-frequency traders (HFTs), claiming the game was, and has been, rigged, with the victims being all investors....
Portfolio Rebalancing: The Whys and The Hows
Summary Ideally, to eliminate style drift investors should rebalance daily. However, because the real world involves costs, investors should reduce, not eliminate, style drift to an acceptable level. Investors should rebalance wherever there is sufficient cash to make the effort...
Emerging Markets, Should They Be in Your Portfolio?
From 2000 through 2010, the MSCI Emerging Markets returned 10.9 percent a year, outperforming the S&P 500 by 10.5 percent a year. In typical fashion, investors flocked to emerging market funds. Since then, returns have been poor, providing negative returns...
Confusing Familiarity With Safety: International Investing and Currency
Summary Investors often don’t properly diversify because they think international investing is risky. U.S. equities are mistakenly assumed to be the “safest.” Even if the U.S. is the safest, that does not mean investors should have all their eggs in...
