Paper results or real-world advantage? Jared Kizer explores whether efficiently managed strategies can, net of fund expenses and trading costs, capture the historically larger value premium found in small-cap stocks. On paper, there is abundant evidence that various return premia have been larger in small-cap stocks compared to large-cap stocks. Table 1, for example, shows …Read More.
Is there reason to believe cross-sectional patterns in returns will persist, even after they’re known? Larry Swedroe reviews a study that explores this question using more than 100 years of factor data from around the world. Factor-based investing seeks to capture the long-term premiums highlighted by academic researchers. Factors are the security-related traits/characteristics that give …Read More.
What do you hold in highest regard? What is it you want most from life? Wealth Advisor Katie Keary explores these questions through a short exercise designed to help harmonize your deepest values and goals, financial or otherwise. By clicking on any of the links above, you acknowledge that they are solely for your convenience, …Read More.
Conventional wisdom suggests investment-grade corporate bonds boost risk-adjusted returns. But is it true? Citywire magazine contributor John Coumarianos looks into research on the credit premium from our own Jared Kizer. Conventional wisdom suggests investment-grade corporate bonds boost risk-adjusted returns. But is it true? Citywire magazine contributor John Coumarianos looks into research on the credit premium …Read More.
Given the evidence on the poor performance of lottery-like stocks, why would mutual funds choose to invest in them? Larry Swedroe unpacks research that shows it may have something to do with investors’ economically irrational “taste” for such equities. Among the assumptions in the first formal asset pricing model, the CAPM, are that investors are …Read More.
Larry Swedroe turns to a new study from Andrew Berkin, his colleague and co-author, on the long-term link between equity prices and bond yields. As the director of research for Buckingham Strategic Wealth and The BAM Alliance, one of the most-asked questions I’ve gotten lately involves the impact of rising interest rates on equity prices, …Read More.
If fixed income is the bedrock of a client’s portfolio, then it better be solid. Investment Strategy Advisor Brian Haywood gives CNBC a look at how credit quality, duration and laddering fit into our evidence-based approach for building bond portfolios. “We think of fixed income as the bedrock of a client’s portfolio. It is there …Read More.
A recent study explores how a lack of financial literacy can cost investors returns. It’s a great tragedy that despite its obvious importance to everyone, our educational system almost totally ignores the field of finance and investments. This is true unless you go to an undergraduate business school or pursue an MBA in finance. Eighteenth-century …Read More.
Larry Swedroe unpacks some recent research from our own Jared Kizer that shows the risk already found in a portfolio of stocks and government bonds can make owning corporate bonds redundant for many investors. A number of articles were written at the end of 2008 noting that, for the prior 40-year period, stocks had barely …Read More.
When it comes to markets, there are no clear crystal balls. Like in poker, the best you can do is put the odds in your favor and then invest (or bet) accordingly. Larry Swedroe on what poker players can teach investors about evaluating decisions. As expert poker player Annie Duke explains in her book, “Thinking …Read More.