Learning Center

When Risk Goes Unrewarded

Date07 Dec 2015

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Risk-based asset pricing theory suggests, simply, that assets bearing a higher risk should compensate investors with higher returns. While most papers investigating the risk-return relationship of assets are focused on equity markets, surprisingly few studies explore this phenomenon in currency markets (which are among the deepest and most liquid markets in the world). In fact,...

Measuring How Financial Advisers Handle Uncertainty

Date07 Dec 2015

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Remember how you felt during the financial crisis in 2008? People were scared. Even the professionals were uncertain about what might happen. I know, because I was scared, too. But I couldn’t show it. Whatever was going on, my clients still needed me to provide thoughtful advice and to help stop them from doing something...

Quick Take: Waiting for Rates to Rise

Date07 Dec 2015

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Brian Haywood Nobody really knows exactly when, or by how much, interest rates will rise. But that likelihood is already priced into the market. Director of Fixed Income Brian Haywood on what you need to know if they do, and why sticking to your strategy will pay off in the end. Waiting for Interest Rates...

An Active Manager Strikes Out

Date07 Dec 2015

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Bloomberg TV recently invited me on to their new show, Bloomberg GO, for a short debate with David Barse, CEO of Third Avenue Management, on active versus passive investing. After stating that funds offered by Third Avenue, which have more than $8 billion in assets under management, had been able to beat their index benchmark,...

For True Freedom, Learn to Deal With Uncertainty

Date07 Dec 2015

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Almost 10 years ago, I knew a guy on a financial rocket ship. He had a great house, a successful business and a solid income. But then things changed. With the benefit of hindsight, it was clear he bought a little too much house and spent a little too much money. At the beginning, he...

Buy This Annuity So I Can Take a Cruise

Date07 Dec 2015

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The current controversy over the proposal by the U.S. Department of Labor to impose a fiduciary standard on those who advise retirement plans has little to do with the rule’s merit. Rather, I believe it’s at issue because stockbrokers are the beneficiaries of a cozy system that permits them to have conflicts of interest which...

Highest Expected Returns Not Always Best

Date30 Nov 2015

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A regular reader of my articles contacted me recently to discuss current valuations and a value-oriented strategy. He observed: “It doesn’t matter which approach you like: a value investor doesn’t prefer U.S. stocks now.” He also pointed out that, while the MSCI World Index currently contains 58.6 percent U. S. stocks, the iShares MSCI World...

Misleading “Debates” on Active vs. Passive Harm Investors

Date30 Nov 2015

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While it’s a low bar, Bloomberg TV always seemed to me to be the best of the financial media. Its anchors are professional and knowledgeable. Its coverage is broad and responsible. It avoids the hype and sensationalism typical of many of its competitors. Bloomberg recently launched a new morning program, Bloomberg Go. It features some...

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