Learning Center

Glamour Can Distract Investors

Date11 Apr 2016

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There’s very strong historical evidence to support the existence of a value premium in equity markets. While there’s no dispute over the existence of the value premium (value stocks have provided an annual average return 5% higher than growth stocks over the long term), there is much debate over the cause of the difference in...

Value Beats Glamour

Date11 Apr 2016

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Earlier this week, we examined a recent study contributing to the literature that supports a behavioral-based argument for the value premium, in particular that investors persistently overvalue the earnings prospects of growth (“glamour”) stocks. The study—“Glamour, Value and Anchoring on the Changing P/E”—posits that the differing experiences of glamour and value investors could be explained...

Stay Diversified Through Lows

Date11 Apr 2016

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There are several keys to having a successful investment experience. The first is to create a well-thought-out financial plan. This plan should begin with identifying your ability, willingness and need to take risk, as well as what it is you want your money to do for you. Having identified all the appropriate risks and objectives,...

Learning to Take Responsibility When Things Go Wrong

Date11 Apr 2016

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It’s that time again, everybody. The one we’ve all been waiting for. No, I’m not talking about spring, March Madness or the start of Major League Baseball. It’s election season. Aren’t you excited? Every four years (or more often, for citizens who never miss a chance to cast a ballot), we partake in what seems...

You’re No Match for Wall Street

Date11 Apr 2016

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Wall Street has an alarming number of shady practices geared to transfer your money to itself. Main Street investors are outgunned and ill-equipped to deal with its chicanery. Conflicts of interest abound There’s a reason Wall Street doesn’t want to be legally obligated to put your interests above its own. Brokers can (and often do)...

The Millennial Guide To Managing Risk With Insurance

Date04 Apr 2016

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“I’m too [fill in the blank] to worry about insurance.” If you’re a millennial, there are plenty of words you could choose from to complete that sentence. Perhaps “young,” “poor,” “busy” and “skeptical” are good ones (for starters). You might have enough insurance. You might even have too much. But I’d bet you don’t have...

A Plan to Stop the Pension Plan Rip-Off

Date04 Apr 2016

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It’s small consolation that your broker is only harming one client at a time by claiming the ability to “beat the market.” Recommending actively managed funds, private equity, individual stocks and alternative investments is the tried-and-true Wall Street way of transferring wealth from you to them. The zero-sum game If you need more convincing, I...

Liquidity Key Price Factor

Date04 Apr 2016

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Liquidity—the ability to buy and sell significant quantities of a given asset, quickly, at low cost and without a major price concession—is valuable to investors. Therefore, they demand a premium as compensation for the greater risks and costs of investing in less liquid securities. For example, liquidity risk partly explains the equity-risk premium. The average...

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