One of the more striking headlines yesterday was that Swiss government bonds now have negative yields out 50 years – that’s right, 50 years! That’s a little hard to fathom, partly because we don’t have bonds that extend that far, but also because 50 years is such a long time. I mean, if I bought a 50 year bond, I’d be in my 90s before I got my money back. Forget inflation, I’m just talking… Read More
One of the phrases that I hear over and over, but simply don’t like, is that ‘markets hate uncertainty.’ Forget the fact that markets are just made up of people and don’t have independent emotions, I’m talking about hating uncertainty. From a theoretical standpoint, let’s think about how uncertainty affects markets. Let’s start with the idea that the value of an investment is the present value of its future cash… Read More
The Brexit has caused legions of analysts, economists, strategists and other pontificators to busily rework their assumptions about the world economy incorporating what seemed like an outside possibility last week to the new lay of the land. Markets fiercely incorporated their new assumptions into prices almost instantaneously – looking a chart of the British pound, you can see when the polls started to show that the Remain camp wasn’t a… Read More
Back in March of last year, S&P and MSCI jointly announced that they would reorganize the Global Industry Classification Standards (GICS) so that REITs will be its own stand-alone sector instead of a component of financials. Most of the time, S&P and MSCI are competing index providers, but for reasons that I don’t know, they have worked together defining sectors (10), industry groups (24), industries (68) and sub-industries (156) around… Read More
I am pleased to announce that for the second time, Acropolis has been named a top Registered Investment Advisor (RIA) by the Financial Times (FT). The FT starts by looking at firms with more than $300 million in assets under management, which is about 1,500 RIAs. They invite firms to fill out a questionnaire and then evaluate the companies based on six key attributes: assets under management (AUM), asset growth,… Read More
You may have noticed that the small cap index in the table above, the Russell 2000, has been gaining ground recently on the S&P 500, the benchmark index for large cap stocks. The chart below shows the return for the Russell 2000 (in orange) as nearly caught up with the S&P 500 (in blue). The return difference, as we can see in the table is just one-third of one percent,… Read More
Lately, I’ve been interested in looking at strategies that have struggled in the past, in part because some of our strategies are struggling right now. Take value, for example, the strategy of buying cheap stocks with the idea that they outperform the overall market over time. It’s a tried and true approach dating back to the 1930s, but the last year has been so rough that the 10-year track record… Read More
Yesterday, I was in the middle of updating a chart about the basic risk and return characteristics of corporate bonds when Standard and Poor’s announced they were downgrading bonds issued by Exxon-Mobile from AAA to AA+. It’s a shame to see another company lose their prime rating – there are now only two companies that have an AAA-rating. Exxon had held the prime rating since 1930, if you include predecessor entities,… Read More
We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: Stock Market Summary Bond Market Review Healthy Aging Strategies Drawdowns: A New Perspective Is Value Investing Dead? The Big Picture and Fast Facts Click here to read the issue: 2016 Q1 Portfolio Insights
Although we all know that ‘tax day’ is April 15th, a holiday in Washington DC pushed back the due date until today. Here are some fun facts from efile.com to help ease the pain: In 1705, Russian emperor Peter the Great taxed beards in the hopes that more men would adopt a clean shaven look. Playing cards and dice were taxed in England going back to 1710 and rose to… Read More
