We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: The Trouble with Forecasting Inside the Economy Stock Market Summary Bond Market Review Choosing a Trustee Best Execution for Clients Click here to read this issue: 2015 Q1 Portfolio Insights
In the past two weeks, I’ve written primers on two of the strategies that we use, over-weighting to small cap stocks and investing in cheap, value stocks. One of the Portfolio Managers here at Acropolis correctly reminded me that all of the best strategy in the world can be undone with poor investor behavior, so I thought I would try and put some numbers on that idea. To demonstrate how… Read More
Value investing is perhaps the oldest and best-known investment strategy, which basically suggests that cheap stocks tend to outperform expensive ones. The strategy was first popularized by Benjamin Graham, teacher and mentor to Warren Buffett, who also co-wrote one of the most important books in finance, Security Analysis, with David Dodd in 1934. Graham introduced the idea that stocks have an ‘intrinsic’ value that can be roughly estimated with a… Read More
When my wife and I got married more than 15 years ago, we had a lot of things in common including the fact that we had both inherited stock in GE. In fact, it was about 10 percent of our combined net worth. I don’t remember the exact numbers anymore, but the cost basis on the stock was low for both of us because each of us had separately… Read More
For the most part, the returns associated with foreign stocks and bonds have two components: the return of the stock or bond and, secondly, the return of the foreign currency. Over the past eight months, the impact of the exchange rate has been unusually high. For example, a German investor that owns an index fund in the DAX is up 24.04 percent so far this year through yesterday. For… Read More
I’ve written a fair amount about negative yields in Europe (click here or here for a refresher), but the Swiss government crossed a new threshold yesterday by actually issuing bonds with a negative yield. Previously, bonds that were already trading in the secondary market had reached such high prices that they had a negative yield, but that’s quite different than an issuance with a negative yield because it means that the issuer actually… Read More
I’ve had the feeling recently that stocks were more volatile than usual. As funny as this may sound, I don’t trust my own gut at all. Despite its size, my gut is no better than anyone else’s at creating hunches that are worth a darn, so I turn to data frequently. To address my intuition, I did a quick check of the average volatility for the first quarter compared to… Read More
In recent weeks, I’ve written about the various risk premiums that have been found in academia that both explain returns and offer some hope of beating the market. Each time, I wished that I could link back to an article that explains the concept more fully, so today, I am going to write the first of a series of articles explaining the well-known risk premiums. First up is the size… Read More
Just in the last 30 days, Jeff Sommer for the New York Times has written two articles about the persistence of performance among actively managed mutual funds. On March 14, in an article titled, ‘How Many Mutual Funds Routinely Rout the Market? Zero,’ Sommer wrote that not a single actively managed mutual fund had consistently beaten the market since the bull market was born in 2009. Using data from the… Read More
As you might hope and expect, we are constantly looking for ways to improve returns, reduce risk, or in a perfect world, both. That means that we are always looking at strategies, evaluating their pros and cons and trying to figure out whether they are better than we are currently doing. One interesting strategy that we’ve looked at over the years that is simple to understand is to buy the… Read More
