Larry Swedroe takes a look at the data and builds his case for why investors should continue to expect a value premium going forward. Recency bias—the tendency to give too much weight to recent experience and ignore long-term historical evidence—underlies many of the mistakes commonly made by investors. It’s particularly dangerous because it causes investors …Read More.
Manisha Thakor and David Ressner discuss saving for college, financial aid, calculating costs and even how to identify the right (priced) college. Demystify planning for college costs: Manisha Thakor and David Ressner discuss saving for college, financial aid, calculating costs and even how to identify the right (priced) college. By clicking on any of the …Read More.
Larry Swedroe unpacks a recent study suggesting that, when selecting active mutual funds, investors confuse loading on common factors with managerial skill. Extensive and readily available data show that the persistence of active managers’ outperformance is well below what we would expect from pure chance (randomness). Making matters worse is that the equity managers who …Read More.
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.
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.
Larry Swedroe explores how awarding star ratings and crowning “category kings” can influence investor (and manager) decisions. To date, an overwhelming body of academic research (including on active share as a predictor) has demonstrated that a mutual fund’s past performance not only fails to guarantee its future performance (as the required SEC disclaimer states), but …Read More.
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.
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.
Larry Swedroe reviews research on a century of evidence on time-series momentum. Similar to some better-known factors, such as size and value, time-series momentum historically has demonstrated above-average excess returns. Also called trend momentum, it is measured by a portfolio long assets that have had recent positive returns, and short assets that have had recent …Read More.