The S&P 500 has outperformed the MSCI World Index each of the past three years and six out of the last eight. This is quite a run when you consider how often U.S. stocks have outperformed the rest of the world’s markets over historically.
The Incredible Growing Dividend
This whole low-interest rate environment seems to be getting a little out of hand. On Friday, the Bank of Japan surprised everybody and cut the interest rate they charge banks on excess reserves into negative territory. According to the WSJ, “Over a fifth of global gross domestic product, or 23.1%, will now be produced in…
Urgent vs. Important
I just finished The Index Card by Harold Pollack and Helaine Olen. It’s a really good personal finance book for those who need to understand a handful of simple steps you need to take to get your finances in order. I love the idea of narrowing down your financial philosophy so that it fits on an index…
Short-Term Thinking With Long-Term Capital
Information is a double-edged sword in the investment industry. Investors now have access to more opinions, analysis, real-time prices and research than ever before. It cannot be overstated how much this has changed the investment landscape when you compare it to how things once were in the pre-Internet stone age of insider tips, expensive research…
What’s Your Savings Replacement Rate?
Finance is a competitive industry so it’s not surprising that performance numbers are the main focal point. Advertisements always discuss a fund family’s best performing funds. The first thing anyone looks at in a pitch book is a fund’s performance track record. Annual return numbers are the currency in which most investment firms stake their livelihood….
About That Oil & Stock Market Correlation
The price of oil seems to be at the forefront of every market and economic conversation these days. That tends to happen when one of the most important commodities on the planet falls 80% in a short period of time. Is it too much supply? Not enough demand? The pricing in of future technological advancements? Speculators?…
The Process of Judging an Investment Process
A couple weeks ago I looked some of the reasons behind the fact that smart money tends to chase past performance. I received a couple of good follow-up questions from people in the industry who were curious about my thoughts on how to judge a portfolio manager or investment process.
The Fear Principles
Yesterday was a wild day in the markets. There was a huge gap down at the open, which followed through into the afternoon. Then there was a huge rally late in the day with another minor slide into the close. The NASDAQ was down 3.65% at the low of the day by lunch time. At 3:30…
Asset Allocation 2.0 (and 3.0, 4.0, etc.)
Richard Bernstein of RBA Advisors came out this week with his firm’s version of Asset Allocation 2.0:
Three Things That Matter During a Market Sell-Off
This is not an exhaustive list by any means, but here are three important aspects of money management that really matter during a stock market sell-off: