Last week I shared some of my thoughts on hedge funds. In a follow-up to that piece I want to discuss some of the reasons that institutions and wealthy individuals allocate money to hedge funds. I’m not so much concerned with Sharpe Ratios and non-correlated returns. What fascinates me most about the investment business is…

I read the following headline this week: I didn’t need to read any further because the entire idea is based upon a false premise. I don’t know who’s more delusional — the politicians who assume that their policy ideas and regulations will be able to make everything perfect for everyone or the voters who assume…

I spent the earlier part of this week in Milan and Rome speaking to a large group of financial advisors for Banca Mediolanum, a large bank in Italy. It was a great experience, and not just because it gave me the opportunity to travel throughout Italy. I also came away with some interesting takeaways on…

Josh Kaufman, author of the book The Personal MBA: Master the Art of Business, had a great post recently on what he call strategic apathy. Some highlights: In my essay on Status Malfunction, we discussed the problem of allowing the promise of social status to warp our decision-making. We didn’t discuss the solution: making a conscious, deliberate…

A number of media outlets have picked up on the five-year return estimates that Vanguard’s global head of investment strategy, Joe Davis, put out at last week’s Morningstar ETF Conference. Here’s what he had to say, via the latest Mutual Fund Observer: Given the fragility of the global economy, Vanguard does not see interest rates being…

Hedge funds are a lightning rod in the financial industry. The most vocal critics and proponents both offer extreme views that paint a very different picture of the same topic. Some will bash hedge funds no matter what while others rush to their defense anytime they’re criticized. On the one hand you have the critics…

Every time something unexpected occurs in the markets people immediately flip out like something is broken. The markets are constantly surprising in a number of ways, but most of the things that seem completely out of the ordinary have happened in some form or another in the past.

One of the things I’m most excited about in my new role is the fact that I’ll get to talk much more about my experience and thoughts on the institutional side of the business, where I’ve spent my career. I’ll be sharing more of this side of things on the blog, but I also now have…

From the highs reached in early spring, the S&P 500 is now down roughly 12%. International stocks (MSCI EAFE) and small caps (Russell 2000) are down even more, as both have fallen roughly 17% from their 52-week highs.

Last week I looked at how duration affects bond market returns and volatility (see Understanding Bond Market Duration & Volatility) and received a number of questions and comments about intermediate-term bonds. The conclusion many readers came to from my post is that intermediate maturity bonds are the sweet spot in terms of balancing out risk…