Last year, a guy made headlines because he was caught using a lowly flip phone. In a world of gold iPhones and palm-size phablets, it does seem a little odd that someone would still use such a low-tech device. But it was the identity of the person using the phone that got everyone’s attention: Jerry…
The news keeps getting worse for active management. Here’s a summary: Poor year-to-date performance In an article on MarketWatch.com, Mitch Tuchman references data from Bank of America indicating only 17.7 percent of active managers have beaten a large-cap index benchmark year to date. That is a significant decline from last year, when 40.5 percent beat…
Q:What are municipal bonds? A:Municipal bonds are debt instruments issued by municipalities in any of the 50 states by the following entities: 1) territories, subdivisions, counties, cities, towns and villages of the state, 2) school districts, 3) agencies such as authorities and special districts created by a state and 4) certain federally sponsored agencies, such…
The carry-trade strategy involves borrowing (going short on) a currency with a relatively low interest rate and using the proceeds to purchase (going long on) a currency yielding a higher interest rate, capturing the interest differential. The strategy can be “enhanced” though the use of leverage. The success of this strategy has led to its…
Gold has long been used as a store of value, as a unit of exchange and to make jewelry. More recently, due to the popular view that it’s a safe haven in times of economic trouble, gold has come to be thought of as an investment asset with a potential role in the asset-allocation decision,…
The private equity industry has changed substantially since the “Prudent Man” rule was modified in 1978 to give institutional investors the ability to allocate part of their portfolios to alternative assets. The industry has grown tremendously over the past 30 years, thanks largely to high returns on early investments. Total fundraising by buyout and venture…
Historically, value stocks have outperformed growth stocks. The evidence is persistent and pervasive, both around the globe and across asset classes. While there’s no debate about the premium, there are two competing theories to explain its existence. The Classic Theory The theory from classical financial economics is that value stocks are the equities of riskier…
By Brian Zdrowak I am 35 years old, and the world is in front of me. I have a wonderful and supportive wife, three fun and energetic kids under the age of 5 and a dog. My wife and I are trying to balance it all: being good parents, finding time for each other, playing…
Once you’ve abandoned the pursuit of balancing money and life in favor of integrating the two, the question still remains: Now what? How the heck do I better integrate money and life? Like most personal finance dilemmas, the answer is simple, but not easy. It’s simple because it doesn’t require many steps. What’s more, it’s…
The sophisticated asset-pricing models we have today allow us to determine the underlying sources of returns to investments. Specifically, they permit us to identify the factors to which an investment has exposure. However, a problem arises when employing current asset-pricing models to consider alternative, illiquid investments. The volatility of such assets is often understated. This…
Americans aren’t saving enough. The numbers appear to back up this claim, which we hear repeatedly. But what I find more interesting is how we react to such statements. I touched on the issue of savings last week, and the responses I’ve heard seem to confirm that it’s a touchy subject. For the sake of…
At the start of 2014, predictions of a market correction were rampant. So what has happened? The market has gone up on some days and down on others, and the volatility that was absent in 2013 has returned. This has led to even more talk about market corrections and projections about what lies ahead. But…
By C.J. Baxter Many investors are feeling a little jittery these days, and rightfully so. We have had to deal with fears of Ebola, constant tension in the Middle East and a sluggish overseas economy. And that short list fails to mention we recently went through one of the biggest market pullbacks since The Great…
On Oct. 29, the Federal Reserve announced the official end to its bond-buying program, otherwise known as quantitative easing (QE). Given all the debate about the efficacy of the Fed’s policy decisions, and the stomach acid created by the many dire forecasts about what was going to happen when quantitative easing ended, I thought it…
There is a huge variation in the quality of advice that investors are exposed to every day. If you can’t differentiate between good and bad information, it can cost you dearly. It may even mean the difference between retiring with dignity and running out of money in your golden years. Terrible advice It’s sad that…