13 May 2016

Forced Sales are Fire Sales

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

By David Ott Tags: ,
11 May 2016

Do Behavioral Biases Matter?

It’s the second to last day here in Montreal and there is a recurring subject that I have noticed popping up in many of the sessions here at the conference – Behavioral Biases. In the investing world this refers to the psychology behind investor behavior and the effect that widespread decision making can have on markets. As an investor it’s important to understand them because they really do matter. First,… Read More

By Cliff Reynolds Tags: ,
10 May 2016

Is Acropolis Contrarian?

Today I attended a session on Contrarian Value Investing. During the speakers prepared remarks I began to think about whether our investment philosophy here at Acropolis could be characterized as contrarian. It’s easy to say that we are value investors. We have value biases in many of our stock asset classes, and by a slightly different definition we invest fixed income dollars with a value bias too. But are we… Read More

By Cliff Reynolds Tags: ,
9 May 2016

Mindfulness Meditation in Montreal

I suppose that the event planners at the CFA Institute know better than to cram too much technical material into the first day of a conference, especially on a Sunday. For one of the first sessions they invited Jeremy Hunter, a professor at the Peter F. Drucker Graduate School of Management and expert in the field of applying mindfulness meditation in business. Jeremy has spent the last 3-years developing a mindfulness… Read More

By Cliff Reynolds Tags:
29 Apr 2016

1st Quarter GDP: Another Stinker

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

By David Ott Tags:
28 Apr 2016

Fed Stands Pat For Now

As expected, the Federal Reserve left policy unchanged.  For the third straight meeting, they left out any assessment of the balance or risks and said that they ‘continue to monitor inflation indicators and global economic and financial developments. The big concern going into the meeting was that the Fed could describe risk as more closely balanced, potentially providing a strong signal for a June rate hike. The statement no longer… Read More

By David Ott Tags: ,
27 Apr 2016

Corporate Bond Risks and Returns in the News

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

By David Ott Tags: , ,
21 Apr 2016

Tubman Unseats Jackson, Saves Hamilton

Last June, we learned that Treasury Secretary Jack Lew was considering dumping THE original American financier, Alexander Hamilton, from the face of the $10 bill. Instead, Lew wanted the ten spot to feature an important American woman, an idea that we can all support.  But Hamilton?  Why get rid of Hamilton, why not get rid of Andrew Jackson – he wasn’t so hot, how did he get on the $20?… Read More

By David Ott
18 Apr 2016

Tax Trivia to Ease the Pain

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

By David Ott Tags:
15 Apr 2016

Yale Bets Big Overseas

One of my favorite reads of the year is from the Yale Investments Office, which manages their $25.6 billion endowment.  You can find the report by clicking here. Yale is routinely the best-performing endowment in the world and has earned a remarkable 13.9 percent return over the last 30 years – well above the 10.7 percent return for US stocks, 8.7 percent return for foreign stocks and 7.1 percent return… Read More

By David Ott Tags: ,