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Value May Be Down, But It’s Not Out

Larry Swedroe concludes it’s premature to give up on the value factor, but also that its premium has only been earned by investors disciplined enough to stay the course through sometimes long periods of underperformance. As the director of research for Buckingham Strategic Wealth and The BAM Alliance, I’ve been getting lots of questions about …Read More.

Hedge Fund Activity Is No Gauge of Outperformance

A Larry Swedroe unpacks these findings, and explains why they offer yet another reason investors should avoid a loser’s game. As I recently observed, hedge funds began 2018 coming off their ninth-straight year of trailing U.S. stocks (as measured by the S&P 500 Index) by significant margins. And for the 10-year period ending 2017—one that included …Read More.

Recency Bias Can Derail You

Larry Swedroe tackles performance, international equity valuations and the perils of recency bias. For the 10-year period 2008 through 2017, a very wide dispersion in returns has existed in markets. As the following table shows, U.S. stocks far outperformed international stocks, and growth stocks outperformed value stocks. Given these results, it’s no surprise I have …Read More.

Factor Performance Across Business Cycles

A recent study explores how Fama-French factors perform across various stages of recession and recovery. Arnav Sheth and Tee Lim contribute to the literature on the performance of factor-based investment strategies through their December 2017 study, “Fama-French Factors and Business Cycles.” In it, they examined the behavior of six Fama-French factors—market beta (MKT), size (SMB), …Read More.

The Benefits of Managed Volatility Strategies

Larry Swedroe tackles research into how managing volatility shapes outcomes and utility. There’s a large body of research demonstrating that, while past returns do not predict future returns, past volatility largely predicts future near-term volatility. For example, since 1926, the correlation of returns between adjacent 60-trading-day periods is essentially zero. In contrast, the correlation rises …Read More.

Entrepreneur Shares ‘Life-Saving’ Career Change

Tim Maurer tells the tale of an entrepreneur who made his passion into his profession. “This was given to me, because that was going to kill me,” entrepreneur Lee Janik told me. “That” was the job of owning and running a construction company he started in Ohio in the mid-2000s. “This” was the sacred experience of fly fishing, …Read More.

Managing Risk With Factors

Larry Swedroe unpacks an illustration supporting factor diversification for portfolio efficiency. The holy grail of investing is the search for investment strategies that can deliver higher expected returns without increased risk, or the same expected return with reduced risk. In our 2014 book, “Reducing the Risk of Black Swans,” my co-author Kevin Grogan and I …Read More.

Divorce: Unveiling The Unspoken Truth

Savvy Ladies Founder Stacy Francis discusses insights about women’s relationship to money before, during and after divorce, as well as the four most common paths to divorce and pitfalls to avoid in the process. Stacy Francis discusses insights from her 2017 white paper, “Unveiling The Unspoken Truth: The Financial Challenges Women Face During And After …Read More.