Resources

Let’s Redefine ‘Smart Money’

Huffington Post

Frank Luntz is a corporate consultant, pollster and political consultant to Republicans. His specialty is in messaging and finding the right words to help his clients sell their products or turn public opinion on an issue or a candidate. In a fascinating interview on Frontline, Luntz made some interesting observations about the impact of language….

Be Wary Of ‘Experts’

ETF

Many individual investors have seen their portfolios devastated, despite having followed the advice of “experts.” They are left wondering, “What went wrong?” As you may have already guessed, the answer is that following the advice of “future tellers” disguised as investment pros is the wrong strategy. As Jim Cramer once famously said to Jon Stewart…

What is prime broker?

Quick Take on Fixed Income April 2015 Q: What is prime broker? A: A prime broker essentially allows clients to trade through an omnibus account at the various custodians. Trading through such an account allows clients to remain anonymous, not only protecting their privacy but also making the trading process more efficient and less prone…

Avoid The Famous & Authoritative

ETF

In my last post, I discussed how we tend to crave certainty, even when we know, logically, that it doesn’t exist. With investing, it’s a desire to believe that there’s someone who can protect us from bear markets and the devastating losses that can result. That leads to what we can call the “Wizard of…

3 Fine Passive Funds Compared

ETF

Index funds and structured passive asset-class funds are similar in the way that rectangles and squares are similar. All squares are rectangles, but not all rectangles are squares. Comparatively, while all index funds are passively managed, not all passively managed structured asset-class funds attempt to replicate the returns of popular retail indexes, like the S&P…

3 Ways To Write Your Own Story, Like Baseball’s Daniel Norris

Yesterday, a bearded 21-year-old surfer who lives in a 1978 VW bus, and on a self-imposed annual allowance of $10,000, mowed down my beloved Orioles with a 96-mile-per-hour fastball. Blue Jays pitcher Daniel Norris isn’t striving to make a statement with his apparently Spartan existence. He’s simply choosing to live life according to his priorities….

Don’t Believe The Active Hype

ETF

I was struck recently by a commercial for the MFS family of mutual funds. In its advertisement, MFS stated: “We believe in the power of active management.” They then went on to boast about the power of their global network, saying: “There’s no expertise without collaboration.” To determine if there is any evidence to back…

Your Brain Is Rigged to Panic in the Next Correction

US News

Your emotions are your portfolio’s worst enemy, more so than an actual market correction. By now, you’re no doubt familiar with the claim by author Michael Lewis in his book, “Flash Boys.” Lewis believes high-frequency traders have rigged the stock market, causing harm to Main Street investors. Many respected financial commentators disagree. They believe high-frequency…

Report Says Ads Show Illusion of Fiduciary Duty

US News

Don’t be fooled. Advertisements can mislead investors on advisors’ responsibilities to clients. It’s funny that there’s even a “debate” over whether brokers should be required to act in the best interest of their clients. It’s even more nonsensical that many investment advisors to retirement plans don’t have this obligation. Much has been written on this…

Comparing DFA Small Value to Vanguard Small Value

Multifactor World

Over the past few months, the difference in historical performance between DFA Small Value (ticker: DFSVX) and Vanguard Small Value (VISVX) has narrowed. For example, for the 10-year period ending December 2014, the compound annual return of DFSVX was 7.9 percent while VISVX earned 8.3 percent. Comparatively, for the 10-year period ending December 2012, compound…

Some Index Funds Are Bad Choices for Investors

US News

Many index funds are smart choices for investors, but that doesn’t mean all of them are. I have long been a proponent of “evidence-based” investing. For many investors, this means investing in a globally diversified portfolio of index funds with low management fees, exchange-traded funds or passively managed mutual funds. In order to make this…

Comparing DFA Small Value to Vanguard Small Value

Over the past few months, the difference in historical performance between DFA Small Value (ticker: DFSVX) and Vanguard Small Value (VISVX) has narrowed. For example, for the 10-year period ending December 2014, the compound annual return of DFSVX was 7.9 percent while VISVX earned 8.3 percent. Comparatively, for the 10-year period ending December 2012, compound…

Admit Your Investing Mistakes

ETF

There are a number of explanations for why many individual investors ignore the overwhelming body of academic evidence and continue to play the loser’s game that is active management. Briefly, three of those reasons are: An education system that has failed the public. Unless an investor obtains an MBA in finance, it’s unlikely that person…

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