Brett Arends from MarketWatch has an interesting piece out this week that looks at the historical returns on the U.S. stock market. He goes through some research that shows some damning evidence about the long-term returns in U.S. stocks: Since 1982, for example, the stock market has gone up by an average of 6.5% a…

Over the past few years emerging market stocks have been dead weight in a diversified portfolio. From 2011-2014, the Vanguard Emerging Market ETF (VWO) had a total return of -7.98%. Four years and nothing to show for it. EM was basically left for dead by investors last year. According to Morningstar, investors pulled $5 billion from…

Here are some things you’ve probably been hearing during the current bull market from a wide range of investors including some tongue-in-cheek translations about what they really mean. On Fair Value: Bears: We think the market’s fair value is much lower than current levels. (Translation: We have to say it’s way lower than the level where…

In the latest edition of Stocks For the Long Run, Jeremy Siegel offered up a great stat on the small cap premium. From 1926-2012, small cap stocks returned 11.5% per year while the large cap S&P 500 returned 9.7%. But if you were to exclude the 1975-1983 period, which coincides with ERISA laws that made it easier…

Jason Zweig’s weekend column in the Wall Street Journal touched on an important issue that’s doesn’t get enough attention in the fund industry — closing a fund that has become too large to outperform. There’s a difficult trade-off between managing for outperformance and gathering assets (and fees) because at a certain point most strategies can’t scale…

Gustave Le Bon was a French psychologist who wrote The Crowd: A Study of the Popular Mind all the way back in 1895. The passage sums up his findings pretty well (emphasis mine): The most striking peculiarity presented by a psychological crowd is the following: Whoever be the individuals that compose it, however like or unlike be their…

Like most professions, everything is not always as it appears in the finance industry. Here are a few truths you will rarely hear from anyone who works in finance. No one really knows what’s going on most of the time. It’s been well documented that not many people are very good at predicting the future, especially…

According to Variety, Vice News is set to launch a web-based personal finance show geared towards millennials: Vice News this week will launch a personal-finance talk show on YouTube, “The Business of Life,” sponsored by Bank of America, which youth-skewing brand says will fill a gap in the media landscape for financial advice aimed at…

There was some good discussion on my post from last week about the return numbers on the S&P 500 from 1934-1953 (see Stock Market Losses With Low Interest Rates). A reader made the comment that it was unrealistic to use S&P 500 returns from that time because there were no index funds in existence back…

One of the most interesting aspects of asset bubbles is that they pull returns forward from future years. Or on the flipside, they lead to lower returns for a number of years when you invest closer to the peak. The NASDAQ was down 80% after the tech bubble burst following the nearly 500% performance during…