Charlie Bilello from Pension Partners posted a great chart in a recent post:
Search Results for: "benchmark"
Not All Active Funds Consistently Underperform
There was a mind-blowing stat flying around last week that showed less than 10% of all U.S. stock funds are currently beating the S&P 500 in 2014. Over longer time frames, the fact that most index funds beat the majority of actively managed funds is a given at this point, but indexing always looks even better…
7 Simple Things Most Investors Don’t Do
Tadas Viskanta from Abnormal Returns made a great point in a recent post: In the financial blogosphere and financial media we are often confronted with debates about issues that really are important only the margin. Of late discussions about active vs. passive, smart beta vs. dumb beta and alternative assets have been at the front…
“Speculation has always been a part of the market and always will be.”
It was the spring of 1976. Investors were still licking their wounds from the severe bear market of 1973-74. Donaldson, Lufkin & Jenrette, an investment bank, was hosting a conference that matched two investing legends onstage at the same time — Ben Graham and Charles Ellis. Ellis, moderating a Q&A, asked Graham why the mid-1970s…
Words & Phrases That Should Be Banished From Finance
Financial planner extraordinaire Michael Kitces had a great post last week on some words and phrases that need to be banished from retirement planning. A few examples Kitces used: Banish retirement income in favor of retirement cash flows. Banish retirement in favor financial independence. This got me thinking about some of the other words and…
Mutual Funds From Good to Great
“The paradox of skill says that when the outcome of an activity combines skill and luck, as skill improves, luck becomes more important in shaping results.” – Michael Mauboussin I recently wrote a post about how size is the enemy of outperformance. My main point was that extreme levels of outperformance become nearly impossible to pull…
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,…
In Pursuit of Past Performance
Morningstar had an interesting piece out this week about the alternative mutual fund universe. While Morningstar studies have shown that the most dependable predictor of future fund performance is low expenses, investors in this universe of funds aren’t following that advice: From 2011 to 2013, only 36% of the net $58 billion that has flowed…
How Diversification Works
“The only investors who shouldn’t diversify are those who are right 100 percent of the time.” – John Templeton It’s often said that diversification is the only free lunch in finance. However, this an incomplete statement because diversification alone doesn’t get you all the way there. There are no benefits to diversification if you don’t…
Retirement Concerns
“The real purpose of saving is to empower you to keep your priorities – not to make you sacrifice.” – Charley Ellis BlackRock recently released the results from a survey asking investors about their five biggest retirement concerns. Here they are in order: 1. How do I start saving for retirement? 2. Am I investing…