Ben Carlson

Which Active Funds Outperform During Bear Markets?

The latest SPIVA mutual fund scorecard was released last week and it was more of the same from the past few reports — the majority of active mutual funds underperformed their respective benchmarks over the past 1, 3, 5 and 10 year periods. These numbers are well-documented at this point so I’ll spare you the…

Stock Performance Before, During & After Recessions

A few weeks ago I urged readers to get used to the fact that recessions are a fact of life that they need to get used to every 4-10 years or so. I shared the following table with each recession since the late-1920s: The next logical step from here is the see how stocks performed in…

Time Horizons & Withdrawal Rates in Retirement

There are now 10,000 baby boomers retiring a day in the U.S. And the projections say another 10,000 are likely to retire every single day for the next 19 years. By my count, that’s roughly 70 million in total. Future retirees are starting to come to grips with this reality. I get at least a…

Rooting For a Bear Market?

William Bernstein joined a number of prominent investors by offering a sobering outlook for the future performance prospects on a traditional U.S. stock/bond portfolio: ETF.com: As you take measure of markets, what are the key takeaways right now? Bill Bernstein: Well, I would say that the expected return of a balanced portfolio is the lowest…

The Psychology of Sitting in Cash

A reader asks: I took one piece of advice from a close friend that the market was too high and that I should go to cash and wait for a correction. I am still waiting. How do I proceed from the position I have of feet embedded in concrete? Since I started this website, this is by…

Advice For a Young Robo-Investor on Asset Allocation

A young investor with robo-advisor Wealthfront is seeking advice based on his 2014 performance. Here’s what he posted on the Bogleheads forum: I have aggressive profile on wealthfront (9.3 out of 10). My return for 2014 is paltry 1.3% compared to S&P. Wondering if I should ditch them or stay with them. Then he shared his…

What’s In a (Mutual Fund’s) Name?

From last weekend’s Barron’s: With nearly half of the companies in the Standard & Poor’s 500 paying a dividend yield greater than the 10-year Treasury bond’s recent 2.11%, investing in dividend-oriented mutual funds would seem like a good idea. But many funds promise more than they deliver, and investors are apt to be disappointed with…

Why It’s So Hard to Change Your Mind About the Markets

“I’m only rich because I know when I’m wrong. I basically have survived by recognizing my mistakes.” – George Soros One of the worst things about the markets is the fact investors get instant feedback on their decisions. Any time you make a purchase or a sale you can check up-to-the-minute price quotes to see if…

Behavioral Experts Behaving Badly

Rory Sutherland is Vice Chairman at Ogilvy & Mather, an international advertising agency whose founder, David Ogilvy, is said to be the inspiration for the Don Draper character on Mad Men. Sutherland is an expert on behavioral economics and human psychology. Sales and marketing departments were utilizing behavioral psychology on unsuspecting customers decades before it…

An Alternative to the 60/40 Portfolio

I’ve made the argument lately that I think even if bonds perform poorly from their current low yields that they could still serve a purpose as a portfolio diversifier (see here and here). Many readers have told me that, even though they understand the arguments I’m making, it doesn’t make sense to hold bonds in…