Excuses for Underperforming the Market

Earlier this month the Wall Street Journal posted an excerpt from a letter written by a hedge fund manager to his investors stating the reasons (see also: excuses) he had to close down his fund. Here’s part of the rant: Post-2008 monetary policies have rewarded the beta investor who’s gone “all in” on market risk and themes,…

How Often Do Stocks and Bonds Decline at the Same Time?

Earlier in the year many investors were under the impression that something had to give because stocks and bonds were both rising.  I looked at the historical data on positive stock and bond returns to show that this is more common than most investors assume: Since performance has been so strong in both stocks and bonds…

How to Preserve Capital During a Bear Market

A few weeks ago I took part in a webcast with MarketWatch on long-term investing that was partly spurred on by a post I wrote about my idea for a TV show about investing. MarketsWatch’s Victor Reklaitis ran the show while I was joined by Tim Strauts from Morningstar and Chuck Jaffe of MarketWatch to…

The Best & Worst Part About Investing in Emerging Markets

“The wonderful thing about emerging markets is that they can get terribly cheap from time to time.” – William Bernstein The quilt above, courtesy of the Novel Investor, shows the annual performance numbers for the largest emerging market countries going back to the year 2000. Like any asset allocation quilt, it looks like complete chaos…

Not All Markets Have Recovered From the Financial Crisis

Based on the MSCI World Index, the U.S. stock market makes up over 50% of global equity markets. We constantly hear updates about the Dow Jones, S&P 500 and even Russell 2000, but rarely pay attention to foreign markets. This home bias causes many investors to overweight U.S. stocks in their portfolio. As everyone debates the current…

Size is the Enemy of Performance

“Prices fluctuate more than values – so therein lies opportunity.” – Joel Greenblatt I saw Joel Greenblatt speak at the Morningstar Conference earlier this summer. He has the uncanny ability to explain the markets and his investment process in a manner than everyone can understand which is not an easy thing to do for many…

Asking The Wrong Question

“A goal without a plan is just a wish.” – Antoine de Saint-Exupery This was the headline and first few sentences from an AP story last weekend: Time to Ditch Rising Stocks, or Stick With Them? Is it time to cash out of stocks? The market has nearly tripled in a little over five years, and…