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Are you aware of the hidden costs in municipal bonds?

Date26 Jan 2015

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Q: Are you aware of the hidden costs in municipal bonds? A: A markup is the difference between the price paid by a broker/dealer and the price a bond was sold to a client. Broker/dealers are permitted to charge fair and reasonable markups on bonds. Unfortunately, these markups do not have to be disclosed to...

A 4-Step Process to Integrating Money and Life

Date26 Jan 2015

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Once you’ve abandoned the pursuit of balancing money and life in favor of integrating the two, the question still remains: Now what? How the heck do I better integrate money and life? Like most personal finance dilemmas, the answer is simple, but not easy. It’s simple because it doesn’t require many steps. What’s more, it’s advice you’ve likely heard before, perhaps multiple...

How To Define Passive Investment

Date19 Jan 2015

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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” is used to describe the opposite of actively managed. But what, exactly, is meant by...

Stressed-out Gen X and the search for a more ‘livable’ life

Date19 Jan 2015

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“We’re just overwhelmed with life.” That was my response to an attorney looking for insight into the obstacles facing Generation X. I’d referred a number of 30- and 40-something financial-planning clients to this attorney. All were in need of estate-planning documents. But he came to me concerned about the difficulty he was having in reconnecting...

Add This to Your Busy Schedule: Time With Family and Friends

Date19 Jan 2015

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If I ask, “How are you today?” I already have a good idea what you’ll say. “Busy.” We’re all busy. It’s reached the point that many of us wear our busyness like a badge of honor. And what better way to measure our busyness than with lists and numbers. Did the children learn a new...

Shorting’s Costly Complexities

Date19 Jan 2015

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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 doing so, help lower overall country-level costs of capital. In addition, temporary short-selling bans have...

5 Bond Myths Investors Should Know

Date19 Jan 2015

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Investing is often made more complicated than necessary by the financial media and the self-styled “experts” featured in its coverage. So maybe it’s not surprising that, for many investors, bonds are a commonly misunderstood subject, because they really are even more technical and confusing than stocks. Investors have many choices when deciding how to invest...

Revisiting Anomalies’ Persistence

Date19 Jan 2015

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An article I wrote in September discussed the findings of the study, “Benchmarks as Limits to Arbitrage: Understanding the Low-Volatility Anomaly,” in which the authors proposed a new explanation for why anomalies (such as the low-beta/low-volatility anomaly) persist. They hypothesized that the typical institutional investor’s mandate to maximize the ratio of excess returns relative to...

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