Learning Center

Beware IPO Earnings Management

Date20 Jun 2016

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It’s logical to believe that corporate managers have a preference for issuing equity at times when they perceive that their company’s stock price is overvalued, or high relative to some benchmark (such as price-to-earnings ratio or book-to-market ratio). What’s more, the academic research on the subject supports this hypothesis—seasoned equity offerings (SEOs) tend to be...

Notes on Scary Markets From Your Sketch-Wielding Drill Sergeant

Date13 Jun 2016

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I want to talk to you about scary markets. For the sake of this particular subject, I want to be blunt and a little bit in your face. So for the next few minutes, please, just think of me less as your friend and more as your Scary Markets Drill Sergeant. O.K.? Great. Now, you may...

Grads: How to Save Pennies Now and Retire Rich

Date13 Jun 2016

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Hey, grads. It’s never too soon to start planning and saving for your retirement (even if it seems far off). Larry Swedroe gives MarketWatch’s Robert Powell his thoughts on what college students and recent graduates can do now to avoid regret later. Find it on MarketWatch.com By clicking on any of the links above, you...

Three Ways to Think About “Is It Worth It?”

Date13 Jun 2016

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In life, there are certain nonnegotiables we simply must have. Think food, water and shelter for starters. Nobody will ask, “Is it worth it to eat?” It’s just something you do to stay alive. But deciding what to eat? That’s a different question. Will I eat the bologna or prosciutto? Drink tap water or bottled?...

A Stock Tip That Went Horribly Wrong

Date13 Jun 2016

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Of all the misinformation disseminated to investors, the most pernicious supports the belief that some “investment pro” or pundit has the skill to reliably pick outperforming stocks. This myth is perpetuated by endless blogs and television appearances by “gurus” touting their latest and greatest stock selections. A steady drumbeat A quick review of what passes...

The Overconfidence Enemy in the Mirror

Date13 Jun 2016

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One of the questions I’m most often asked by reporters covering finance is: “What are the biggest risks facing investors?” My usual response is that the biggest risk confronting most investors is staring right back at them when they look in the mirror. And there’s plenty of academic research to support that view. Much of...

Avoid Bias In Alts Investing

Date06 Jun 2016

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Allocations by institutional investors to alternative investment classes have risen substantially during recent decades. By 2010, the 1,000 largest sponsors of public pension funds allocated on average more than 17% of their assets to alternatives, including 9% to venture capital and buyout funds and 6% to real estate. At the average university endowment, alternatives in...

A Life Full of Experiences May Not Mean Less Financial Security

Date06 Jun 2016

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A couple of weeks ago, I wrote a column about the growing tribe of people who value experiences over security in their lives. But there is something that I didn’t say then that I want to emphasize: You don’t necessarily have to trade experience and financial security off against each other. One of my main...

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