Resources

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Re-Examining Emerging Markets Equity (copy)

In a look at both the long-run and the current market data, Jared Kizer offers five lessons that reinforce some of the reasons investors should remain committed to a long-term emerging markets equity allocation. Emerging market equities have substantially underperformed the S&P 500 Index in 2018, with the S&P 500 up 6.5 percent and emerging…

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The bond market is less transparent in pricing and trades less frequently than equity markets. Blerina Hysi explains how a trusted advisor can help navigate these market inefficiencies and prevent you from suffering excessive mark-ups.   By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do…

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The Differences Between the Equity and Fixed Income Markets

A quick take on bond markets. Blerina Hysi on navigating fixed income’s lesser transparency and trading frequency. The bond market is less transparent in pricing and trades less frequently than equity markets. Blerina Hysi explains how a trusted advisor can help navigate these market inefficiencies and prevent you from suffering excessive mark-ups.   By clicking…

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Active Management Fails in Fixed Income (copy)

Larry Swedroe explains why active bond fund managers not only fail to outperform, but may also offer investors only the illusion of portfolio diversification. There is a myth that active bond fund managers want and need you to believe. It goes something like this: “Sure, active stock picking isn’t likely to work, but in fixed…

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Larry Swedroe tackles performance, international equity valuations and the perils of recency bias. For the 10-year period 2008 through 2017, a very wide dispersion in returns has existed in markets. As the following table shows, U.S. stocks far outperformed international stocks, and growth stocks outperformed value stocks. Given these results, it’s no surprise I have…

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Larry Swedroe tackles performance, international equity valuations and the perils of recency bias. For the 10-year period 2008 through 2017, a very wide dispersion in returns has existed in markets. As the following table shows, U.S. stocks far outperformed international stocks, and growth stocks outperformed value stocks. Given these results, it’s no surprise I have…

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Yet More Investing Lessons from 2017 (copy)

Larry Swedroe concludes his list with 2017’s lessons eight through 10. Every year, the markets offer lessons on the prudent investment strategy. So far, we’ve covered what they taught us last year in lessons one through three and four through seven. Today, we’ll finish off 2017’s list with lessons eight through 10. Lesson 8: Hedge funds are not…

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More Investing Lessons from 2017 (copy)

Larry Swedroe resumes his list with 2017’s lessons four through seven. Earlier this week, we began discussing what the markets taught us in 2017 about prudent investment strategies. We tackled lessons one through three then, so today we’ll resume with lessons four through seven. Lesson 4: Don’t make the mistake of recency. Last year’s winners are…

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Investing Lessons from 2017 (copy)

Larry Swedroe unpacks lessons one through three from 2017. Every year, the markets provide us with lessons on the prudent investment strategy. Many times, markets offer investors remedial courses, covering lessons it taught in previous years. That’s why one of my favorite sayings is that there’s nothing new in investing—only investment history you don’t yet…

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The Crucial Nature of Patience and Diversification (copy)

Larry Swedroe explains why new research into the volatility of equity risk premiums shows that patience and factor diversification are crucial. “Success in investing doesn’t correlate with IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people in trouble investing.” — Warren Buffett In my more…

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When Manager Skill Is Really Factor Exposure (copy)

Larry Swedroe unpacks a recent study suggesting that, when selecting active mutual funds, investors confuse loading on common factors with managerial skill. Extensive and readily available data show that the persistence of active managers’ outperformance is well below what we would expect from pure chance (randomness). Making matters worse is that the equity managers who…

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Don’t Write Off Value (copy)

Larry Swedroe takes a look at the data and builds his case for why investors should continue to expect a value premium going forward. Recency bias—the tendency to give too much weight to recent experience and ignore long-term historical evidence—underlies many of the mistakes commonly made by investors. It’s particularly dangerous because it causes investors…

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Mutual Fund Ratings and ‘Category Kings’ (copy)

Larry Swedroe explores how awarding star ratings and crowning “category kings” can influence investor (and manager) decisions. To date, an overwhelming body of academic research (including on active share as a predictor) has demonstrated that a mutual fund’s past performance not only fails to guarantee its future performance (as the required SEC disclaimer states), but…

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