Why Not All Tech?
Over the last ten years, the oldest technology ETF I could find, the Select Spider Tech fund (ticker symbol XLK), has made more than 20 percent per annum through September 30th. A $10,000 investment in that fund would have been worth $64,172 at the end of last month. Even though I know better than to drive forward while looking out through the rearview mirror, I can’t help it: I want… Read More
Don’t Text Me, I’ll Text You
Like many industries, the wealth management business has many rules and regulations. Many of the rules make good sense and were created after real-world problems occurred. I have one rule on my mind this week, and it concerns one of the ways that we communicate with you: texting. Acropolis is regulated by the Securities and Exchange Commission (SEC), and one of its rules concerns maintaining our books and records. At… Read More
The Hottest Stocks of All Time
An Arizona State professor, Hendrik Bessembinder, wrote a fascinating paper detailing something that we intuitively sense: a small handful of stocks have created almost all of the wealth over time, and most stocks don’t provide much in the way of returns. It’s one of the reasons we want hot tips (even when we know they aren’t likely to be hot). The paper’s provocative title is “Do stocks outperform Treasury bills?”… Read More
Portfolio Insights
We are pleased to provide a digital copy of Portfolio Insights, our quarterly newsletter. Table of Contents: Stock Market Summary Bond Market Review Big Tech vs. The World Inside the Economy Optimization Overload The Big Picture Click here to read the issue: 3Q 2024 Portfolio Insights
The End (of the Election Season) is Nigh
People started asking me about a year ago what the election would do to stock prices. I didn’t know then, and I still don’t. Over the years, I’ve read many articles describing how markets fare under Democratic and Republican administrations. I’ve also done the research myself and written several of those articles. Last year, I even wrote about what happened in the year leading up to the presidential election because… Read More
Optimization Overload: When Perfecting Becomes Problematic
When we launched Acropolis over 22 years ago, I thought understanding optimizations would be the key to our success. If we could just figure out “the” optimal allocation, we would be well ahead of everyone else. Of course, that’s true, but figuring out “the” optimal allocation wasn’t possible because you can’t tell in advance. My memory (which could be better) is that the software package we used then suggested a… Read More
Thank You Chair Powell, May I Have Another!
Early last week, few questioned whether the Federal Reserve would cut interest rates; the only question was whether they would cut by a quarter or a half of a percent. We know now that the Fed cut half a percent (or 50 basis points), but two questions remain. First, why did they cut as much as they did? Second, how much more will they cut? Perhaps I should start with… Read More
Introduction to Alternatives
I am proud that one of Acropolis’ team members has a new certification for the firm. Before I jump into that, though, here’s a look at what our fine team has already: 15 CFP® Certificants 4 Chartered Financial Analyst (CFA) Charterholders 3 Certified Public Accountants (CPAs) 1 Certified Exit Planner (CEPA) 1 Certificate in Performance Measurement (CIPM) holder 3 ASPPA Qualified 401k Administrators (QKA) 1 Investment Adviser Certified Compliance Professional… Read More
Index Fund Overhaul: Passive Investing vs. Market Concentration
One of my (many) pet peeves is when people offhandedly say, “Just buy an index fund.” I get the point, and I agree with it: Index funds are a great way to invest, much better than the old-school method of active investing. That said, there are thousands of index funds, and the rules that govern the indexes often create very different portfolios with very different performance. The largest tech-sector ETF… Read More
Small Cap’s Revenge (…has a long way to go)
Take a look at small cap returns last week! Since July 9th, small-cap stocks have risen by about 10 percent, a remarkable run of 16 trading days. Better still, the S&P 500 fell during that time, highlighting the diversification aspect of small caps. One of the pillars of factor investing is that small-cap stocks should outperform large-cap stocks, a phenomenon known as the size premium. From an academic standpoint, there… Read More