Learning Center

Not All Value Metrics Are Equal

Date04 Aug 2014

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The metric most commonly used to categorize value stocks and to construct portfolios is the one employed by the Fama-French three-factor model—book-to-market (BtM) ratio. Russell Indexes only uses BtM to determine value as well. However, other metrics also show a value premium. Today we’ll take a look at the historical evidence on the premiums provided...

Will retiring boomers spark a stock bust?

Date04 Aug 2014

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As if equity investors didn’t already have enough to worry about, one of the new concerns getting a lot of attention recently is that the baby boomer cohort — now starting to retire — will fund their retirement by selling equities. The “conventional wisdom” is that this supposed sell-off will result in a stock market...

How can you effectively harvest tax losses in bonds

Date04 Aug 2014

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Q: How can you effectively harvest tax losses in bonds? A: The prospect of higher interest rates scares a lot of investors as that can mean lower bond prices and the potential for losses. You can, however, take advantage of these losses to help improve the overall portfolio return. The simplest, most effective way to take...

Money-Spending Decisions, Made Once and for All

Date28 Jul 2014

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For more than a decade, my family and I have gone to Jackson Lake in Wyoming for what’s become our favorite summer vacation. Because the trip includes a boat, we make arrangements to rent a mooring for the boat so we don’t have to take it in and out of the water each day. Last...

People Ignore 80% of What Their Adviser Tells Them. Here’s Why.

Date28 Jul 2014

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I’ve heard it estimated that out of all the financial and estate planning recommendations that advisers make, their clients ignore more than 80% of them. If there’s even a shred of truth in this stat, it represents a monumental failure of the financial advice industry. Unfortunately, I think there’s a lot of truth to this...

Pogo Stick Retirement Planning For Younger Generations

Date28 Jul 2014

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Historically, retirement planning has been likened to a three-legged stool — consisting of a corporate pension, Social Security and personal savings. Baby boomers saw the pension fade from existence, leaving them to balance on retirement planning stilts. For younger generations, however, the retirement situation can seem even worse. Sometimes, it feels like it’s all on us. We’re left with...

Ignore the Babble Masking as “Financial News”

Date28 Jul 2014

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You are besieged with a daily onslaught of what passes for “financial news.” Much of it is nonsense, self-serving and unreliable. Yet the sheer volume, and the clever way it is packaged and disseminated, may lead you to take action. Here are two categories of typical financial news, with my suggestion for how to evaluate...

The Powerful Psychology Undermining Your Returns

Date28 Jul 2014

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There can be little dispute over the sad state of returns for many investors. My colleague at the BAM Alliance, Carl Richards, used Morningstar data to note this disturbing fact: The average U.S. stock mutual fund had a 10-year average return of 8.18 percent at the end of 2013. The average investor only earned 6.52...

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