Learning Center

Star Manager Loses Luster

Date14 Mar 2016

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Last week, Financial Advisor magazine published a story announcing that one of the mutual fund industry’s oldest funds, run by one of its most enduring fund managers, Kenneth Heebner, went out of business when Natixis Global Asset Management liquidated its CGM Advisor Targeted Equity Fund. According to the article, at its end, the fund had...

As Investors Flee Active Funds, Will it Become Easier for Active Managers to Outperform?

Date14 Mar 2016

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One of the more frequently asked questions I receive as the director of research for The BAM ALLIANCE is whether, as investors abandon active mutual funds, it will become easier for active managers to outperform. The trend toward passive investing has been inexorable, although slow, for the past 20 years, with roughly 1% of active...

Simple Portfolio That Has Beaten the Pros

Date07 Mar 2016

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The financial industry would prefer you to believe that you can’t be a successful investor without it. That’s good for business but it’s not exactly true. In fact, it may be truer to suggest that a layperson with a reasonable grasp of middle school math—combined with the rarer traits of discipline, grit and humility—is capable...

With market volatility, do you stay invested or move to cash?

Date29 Feb 2016

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In the market these days, it seems what goes up must come down — and then go up and then down again. On Wednesday, the Dow Jones industrial average opened 100 points higher, but then fell by more than 150 points before again trying for gains in midday trading. The Nasdaq and S&P 500 weren’t...

Does an individual bond ladder offer more protection in a rising rate environment than a bond fund?

Date29 Feb 2016

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Quick Take on Fixed Income February 2016 Q: Does an individual bond ladder offer more protection in a rising rate environment than a bond fund? A: Many investors are worried about how rising interest rates will affect their fixed income portfolio. Many believe an individual bond ladder better protects them against rising rates because they...

Saying No, So You Can Say Yes When it Matters

Date29 Feb 2016

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I have a problem: It’s really hard for me to say no to new, exciting projects. If you’re doing creative work at all (and I’m using this term very broadly, so that should mean just about everybody), then you’ve probably run into this problem yourself. There are endless options for how you could spend your...

Small Caps Still Outperforming

Date29 Feb 2016

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As the director of research for The BAM Alliance—a community of about 140 like-minded RIA firms who believe in providing a fiduciary standard of care using an evidence-based investment strategy—I often get requests from other advisors for my help in answering questions from clients about articles they’ve read in the financial media. As such, I...

When Risk Doesn’t Lead To Return

Date29 Feb 2016

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Among the more notable anomalies in modern finance is the finding that the lowest-beta stocks have produced higher returns than the highest-beta stocks. Another anomaly is that idiosyncratic (diversifiable) volatility negatively predicts equity returns. In other words, stocks with the lowest idiosyncratic volatility outperform stocks with the highest idiosyncratic volatility. These findings have spurred a...

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