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How Adam Smith Can Change Your Life

Date23 Feb 2015

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Author Russ Roberts takes an interesting tack in his new book, “How Adam Smith Can Change Your Life.” While Smith’s most famous tome, “The Wealth of Nations,” has been most popular in economic and investor circles, his other volume, “The Theory of Moral Sentiments,” contains some of the venerable writer’s most valuable insights. One of...

Hedge Funds Are Status Symbols

Date23 Feb 2015

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What was the biggest surprise to hit the markets in 2014? I think most investors would tell you it was either that interest rates fell or that the price of a barrel of oil fell by half. My own view is that there was a far bigger one. For the 12 months ended August 2014,...

Inside The ‘Smart Beta’ Hype

Date23 Feb 2015

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While Wall Street investment firms have done a very poor job of delivering good risk-adjusted returns to investors, their well-tuned marketing machines have done a great job creating demand for products where none should really exist. Their latest creation is a type of investment offering referred to as “smart beta.” To ensure you understand why...

Your Genes Impact Your Investment Decisions

Date23 Feb 2015

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The sharp market decline in January has raised the anxiety level of investors everywhere and brought out the worst in the financial media. Many investors are asking the wrong questions, like these: 1. Is this the beginning of a market correction? 2. Should I sell my stocks and just “sit on the sidelines”? 3. Is...

Be Wary Of The Low Vol Factor

Date23 Feb 2015

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The superior performance of low-volatility stocks—the low-volatility anomaly—has been documented to exist in equity markets around the globe. And since its discovery, a good amount of academic research has attempted to determine both its origins and whether or not it will continue to persist. Among that research is a December 2013 paper, “A Study of...

Don’t Be Afraid to Stand Apart From the Herd

Date23 Feb 2015

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What feels safe is often risky, and what feels risky is often safe. This statement contradicts just about every evolutionary instinct we possess. We tend to seek out safety and avoid risk whenever possible. A classic example has to be the instinct that (still) tells us we are safer staying with the group. If members...

Good Looks, Bad Advice

Date23 Feb 2015

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In a recent blog post for Pragmatic Capitalism, Ben Carlson did an excellent job of putting the recent surge of money into passively managed funds in context. The shift to passive funds is still modest The shift from active to passive strategies is understandable, given the historical poor performance of actively managed funds in beating...

Comparisons With Others Can Obscure Our Own Goals

Date23 Feb 2015

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On and off over the years, I have used a training app called Strava. It allows you to keep track of your performance on different biking, running and skiing trails. You can even break down overall times into sections or compare your performance over the entire trail. Last year, in an attempt to get back...

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