Even though I was on vacation, I couldn’t resist checking market results right before bed (and sometimes during the day). I was shocked by two benchmark yields: the German 10-year below zero and the US 10-year at 1.57 percent. German 10-year yields have never been negative and the US 10-year has was just 0.18 percent off its all-time low of 1.39 percent, set back in July 2012. At one point,… 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
Three or four years ago, I gave up cutting the grass, which I wasn’t too happy about because I really liked seeing a physical change to my yard after a few hours of work. I love my job, but at the end of a year, the numbers on a screen may have changed, but they are still numbers on a screen. It’s simply not as inherently satisfying. In any case,… Read More
Yesterday, Ryan Craft and Cliff Reynolds sent out their email newsletter, ALM Insights. If you don’t know what ALM stands for, it just means that you’re not a banker (it stands for Asset Liability Management). As you know, banks take deposits from folks like you and me and lend the money out to consumers and businesses. But they can’t loan out all of the money that they take in, they… Read More
The FOMC minutes release was the macro focus of the day. The minutes said that most participants judged that if second quarter data showed a pickup in economic growth, then a rate increase might be appropriate. Given the weak first quarter and that live tracking estimates of current growth are much better, the statement strongly implies a June hike. The FOMC members observed that the labor market continues to improve… 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
Last December, I wrote that fading internet stock Yahoo was trading below the sum of its parts. You can read the whole article here, but the basic idea was that when you looked at the component value of Yahoo’s major parts, the market was saying that the core business was worthless. At that time, Yahoo owned stock in Alibaba worth $32 billion, stock in Yahoo Japan worth $8.5 billion and cash… Read More
Acropolis diversifies in more ways than you may realize. In addition to the well known methods like single company exposure, sector, industry, geography, creditworthiness and asset classes, we also diversify by risk factors. I’ve written about the equity factors that we use (see a list of our primers on size, value, momentum and quality here), but I think it’s also important to note that there are some factors that we avoid…. Read More
The Bureau of Economic Analysis reported today that the advance estimate of gross domestic product (GDP) grew at a seasonally adjusted annual rate of 0.5 percent in the first quarter, below the consensus estimate of 0.7 percent. In many ways, the weak reading is reminiscent of the weak first quarter results that we’ve seen for the last decades (see my article about weak first quarter GDP from last year by… Read More
