30 Oct 2015

New Budget Curtails Social Security Maximization Strategies

It was announced on Tuesday that the House of Representatives passed a budget deal that is expected to move through the Senate largely unchanged and make it to the President’s desk in time to avoid a fiscal crisis and a possible government shut down. Although that’s news unto itself, I was interested to see that this budget clamps down on two of the most popular Social Security maximizing strategies in… Read More

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29 Oct 2015

Fed Wake Up Call: December is on the Table

While the Fed kept interest rates at zero as expected, they did send two notable signals for investors to think about. First, they removed the language that first appeared in the last statement, which said that ‘recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.’ While they said that they will be monitoring global… Read More

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27 Oct 2015

Efficient Markets: Fact and Fiction

For almost 50 years, one of the most controversial ideas in finance is that markets are efficient as presented by Gene Fama’s Efficient Market Hypothesis (EMH) in 1966. Let’s start with a simple definition of EMH: Current market prices incorporate all available information and expectations and are the best approximation of intrinsic value. In some ways, it’s such a simple statement that it’s a little surprising that it’s so controversial…. Read More

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26 Oct 2015

Jack Bogle Doesn’t ‘Do” International Investing

Jack Bogle, the founder of Vanguard, is one of my heroes.  Earlier this year, there was a petition to award him the Presidential Medal of Freedom (that I asked you to sign) and he wasn’t even close to getting enough signatures for the President to consider the petition.  I was both surprised and disappointed. I’ve read several of his books and whenever I see him interviewed, I pay attention.  A… Read More

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22 Oct 2015

Profits Are Falling (Again)

Someone once told me that the price of a stock should only change four times per year – when investors receive new financial information about the business in the form of an earnings release. Obviously, it doesn’t work like that, but it’s an interesting idea. In any case, earnings season is upon us and based on the third quarter data so far from FactSet, it doesn’t look pretty.  While only… Read More

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20 Oct 2015

I’ve Got an Embarrassing Admission

In September, I wrote an article about the Dow Jones Industrial Average (DJIA) – how it was constructed, how it compares to the S&P 500 and why I think, to quote myself, ‘that it’s an almost worthless relic of history.’ A few readers emailed me to say that while they agreed that the DJIA is a funny index with its price-weighted construction and limited number of stocks, its performance roughly… Read More

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19 Oct 2015

Deflation in Switzerland

Back in January, I wrote about how some economists were arguing that a little deflation might not be such a bad thing (you can refresh your memory here). Deflation, or falling prices (negative inflation), is widely feared by economists because falling prices lead to lower consumer spending, which is a major component of economic growth.  Producers respond by slowing down their factories, which leads to layoffs and wage reductions that… Read More

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15 Oct 2015

Portfolio Insights

We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: The Correction In Perspective The Importance of Discipline Information Security Today New at Acropolis Janet Blinked Click here to read this issue: 2015 Q3 Portfolio Insights

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9 Oct 2015

The Right Time Horizon for Stocks

When people ask me how long their time horizon ought to be when investing in stocks, I usually say 10 years.  It occurred to me the other day that either I’ve never really looked into this in a very detailed way or I’ve forgotten about it.  In either case, it’s now time to look. To answer this question, I looked at rolling returns for the S&P 500 since 1926 for… Read More

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9 Oct 2015

Visualizing Stock Returns

A great way to visualize asset class returns is to put them into what the industry calls a ‘periodic table,’ which I’ve done below.  The basic idea is to order the returns of asset classes in each calendar year from best to worst. In the chart below, 2006 is the first year and the best performing asset class in gray was 35.9 percent.  At the bottom of the column is… Read More

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