The Swiss National Bank (SNB) revaluation of the Swiss franc caused me to look at The Economist magazine’s ‘Burgernomics’ website (which can be found here). While it may not be popular with high minded economists, the Burgernomics site attempts to put a fundamental value on currencies from around the world by looking at the cost of buying a Big Mac in each country. In theory, a Big Mac ought to… Read More
We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. This issue is particularly exciting because it features an entirely new look and feel for the same great content that we’ve been creating for the last dozen years. Table of Contents: Evaluating Global Stock Exposure Predicting Interest Rates Review of 2014 The Allure of Market Timing New at Acropolis Six Financial Planning Myths The US Dollar… Read More
As recently as Christmas Eve, the market believed that there was a 92.4 percent chance that the Federal Reserve would raise interest rates in 2015. The probability is based on prices for Federal Funds futures price contracts at the Chicago Board of Trade (CBOT). In the first few weeks of this year, I started hearing market chatter that the Fed may have to push off raising interest rates until 2015… Read More
I almost always skip the opinion section in nearly every publication that I read. When I do read an opinion piece, it’s because it’s written by someone that isn’t affiliated with the editorial board and someone that I admire. Back in November, I read an editorial in the Wall Street Journal by John Cochrane, a respected University of Chicago professor and one of the world’s leading experts on central banks… Read More
Each month, Bloomberg asks 75 professional economists to forecast a variety of economic indicators. At this time last year, the median forecast among the economists for inflation-adjusted (or real) economic growth was 2.6 percent. At this point, we don’t have enough data to say what actually happened, but it looks as though the estimates won’t be too far off base. Assuming that the fourth quarter numbers come in as… Read More
Just before the 2008 financial crisis, a Wall Street insider tipped off the Securities and Exchange Commission (SEC) to insider trading at a large, successful, but largely little known hedge fund, the Galleon Group. The founder, Raj Rajaratnam, had a vast network of contacts that he would pay in exchange for confidential information about a company that would affect its stock price when the information became public. Ultimately, he was… Read More
One of the complaints that I hear about index funds is that their returns are average and buying them guarantees mediocre returns. Not so! If that were true, you would expect that the returns for the Vanguard S&P 500 index fund (VFINX) would be around the 50th percentile when measured against its peer group. The actual percentile might shift around some from year-to-year, in the 40th percentile one year and… Read More
The performance of the S&P 500 over the past two days has reminded me of charts that I have seen over the years that show the impact of missing the best days in the market. These charts offer a good message about remaining fully invested, which I wholly agree with, but the charts are also a little misleading in my view. I decided to create one of my own to… Read More
Sometimes I inadvertently slip into financial jargon that is meant to convey a very specific message but ends up being gobbledygook that is off-putting for a lot of people. Recently, I used the term ‘portfolio construction’ in a meeting and the client, understandably said, ‘Dave, I know you mean how it’s built, but what exactly are you talking about?’ It’s true, the term portfolio construction sounds obvious but isn’t necessarily…. Read More
Growing up, I watched get-rich-quick infomercials, from selling vitamins through tiny classified ads in thousands of newspapers ($50,000 per week!) to flipping real estate (buy a home with nothing down and walk away from the closing with a $30,000 check!). Although Tony Robbins didn’t sell get-rich-quick schemes, he sold something even more enticing: how to unleash the power already within you to live an extraordinary life – achieving your ultimate… Read More
