CBS News

Why it doesn’t pay to chase fund performance

One of the most important investment decisions you make is in determining your asset allocation, or how you choose to divide your assets between risky and safe investments. Another key decision concerns which strategy to use when selecting the funds to implement your asset allocation plan. Should you be a buy-and-hold investor? Or should you …Read More.

Here’s the latest failing grade for active funds

No one has a clear crystal ball allowing them to accurately forecast the future. So, it’s a good thing that predicting the results of Standard & Poor’s twice-yearly active-versus-passive scorecard doesn’t seem to require one. It’s a pretty safe bet that the results in each new scorecard — officially called the S&P Indices Versus Active …Read More.

Investing habits: The good and the bad

Choosing good investments is a necessary condition for successful investing. But it’s also important to engage in good behavior once those investments have been selected. The most recent issue of AQR Capital Management’s quarterly newsletter for clients provides great insight into both the bad behaviors investors tend to engage in, as well as positive practices …Read More.

Index investing still wins in emerging markets

A regular reader sent me the following email: “If you get the chance, I would appreciate you including a piece about whether the Franklin Templeton Developing Markets (TEDMX) fund adds value. Its manager, Mark Mobius, is always quoted as the guru and pioneer of emerging markets investing. Does he do any better than a passive …Read More.

Don’t-miss reads for investors

It’s not too late to make some summer reading recommendations, and a quick review of my bookcase turned up some titles I think would be valuable for any investor. These books cover topics ranging from a detailed explanation of how the markets really work to the basic benefits of financial planning and some of the …Read More.

Actively managed funds flop in Europe, too

For more than a decade now, Standard & Poor’s has been contributing to the debate over active versus passive investing by producing its S&P Indices Versus Active Funds, or SPIVA, scorecards. These twice-yearly scorecards evaluate the evidence concerning the performance of actively managed funds relative to their benchmarks. They show, year after year, that fewer …Read More.

Avoid this mistake about global diversification

Don’t get stuck in your own backyard. Investors should consider building globally diversified equity portfolios that avoid the persistent and worldwide phenomenon of home-country bias. That’s when you allocate a greater weight to your home-country stocks than their percentage of total global market capitalization. Among the reasons investors around the world exhibit this bias is …Read More.

Will retiring boomers spark a stock bust?

As if equity investors didn’t already have enough to worry about, one of the new concerns getting a lot of attention recently is that the baby boomer cohort — now starting to retire — will fund their retirement by selling equities. The “conventional wisdom” is that this supposed sell-off will result in a stock market …Read More.