Useful benchmarking is one of the hardest things to do for institutional investors because of the way they structure their portfolios. Take a look latest asset allocations for college endowment funds from the annual study done by the National Association of College University Business Officers (NACUBO): Alternative investments are now the biggest allocation for all…

There’s never been a better time to be an investor. Expenses are coming down. It’s cheaper than ever to trade. Strategies that were once reserved for large institutional funds at exorbitant fees are now available to every investor through low-cost mutual funds and ETFs. The sheer amount of data and computing power available has completely leveled…

On this week’s Animal Spirits with Michael & Ben we discuss: What to do if you’ve been sitting in cash during the bull market. The latest change I made to my personal portfolio. What trend-following is and why it’s a difficult concept for investors to grasp. The worst bear market no one ever talks about….

Since I wrote this piece for Bloomberg in late-October there has been an additional 14 new all-time highs in the S&P 500. I’m often asked why the market continues to trudge higher in the face of so much uncertainty in the world. The simplest explanation is this idea of momentum. Momentum is by far the…

Investors have been hearing about bond market bubbles since the financial crisis. Interest rates have refused to budge but even if/when they do rise most of the people proclaiming this is a “bond bubble” don’t really understand what that means. There’s a huge difference between how bonds and stocks are structured and many of those…

The Wall Street Journal published a story last week about the investing program for the foundation of the Financial Industry Regulatory Authority (FINRA). FINRA is a nonprofit that’s tasked with regulating the broker-dealer industry to ensure investors aren’t getting taken advantage of. FINRA itself has a $1.6 billion investment portfolio that leaves much to be…

My first boss in this industry was old school. One of the first things he taught me to help understand the institutional investment landscape was the Prudent Man Rule. This was a piece of legislation from the 1800s that basically outlined the idea behind being a fiduciary when managing assets for other people. The Prudent…

In my 36 Obvious Investment Truths, number 24 stated: 24. Most backtests work better on a spreadsheet than in the real world because of competition, taxes, transaction costs and the fact that you can’t backtest your emotions. Anyone in the investment business knows there’s no such thing as a bad backtest (although the recycle bin…

I often tell my wife it’s quite possible my three young children won’t have to drive if they don’t want to once they reach that age because of the potential that we see self-driving cars by that time. The benefits of self-driving cars could be enormous — far fewer deaths on the roads, more efficient…

A couple weeks ago I wrote about how hard it is to offer investment advice without offering financial advice (or at the very least gaining a deep understanding of your client’s financial situation). The truth is there’s no perfect solution for offering financial advice or investment management. Every person, family or organization has varying degrees of…