The Naked Truth About Actively Managed Mutual Funds

16 Sep 2014

Twice per year, Standard & Poor’s issues a report that compares the performance of actively managed mutual funds to corresponding S&P indexes. The most recent report, the S&P Indexes Versus Active, or SPIVA, can be found here. It’s a great report because it provided high quality, continuous evidence in the ongoing debate about active versus passive management. The debate, which has being going on for 30+ years, centers on who… Read More

By

Why We Avoid Junk Bonds

05 Sep 2014

The Wall Street Journal had a headline yesterday that I couldn’t resist: Junk Bonds Deserve a Place in Investors’ Portfolio. I like to read articles where I agree with the fundamental proposition, but I REALLY like to read articles where the premise completely contradicts my view, or the view of Acropolis. This article falls in the second category since we believe that junk bonds don’t deserve a place in your… Read More

By

Falling Dollar Fallout

03 Sep 2014

Five years ago, dire predictions were a dime a dozen. It was, after all, a very scary time fraught with uncertainty. Amid all of the dreadful forecasts, one bothered me a lot less than the others: the US dollar would collapse leaving Americans pushing around wheelbarrows of worthless cash in order to buy just one loaf of bread like in Germany’s Weimar Republic. The idea was that the Federal Reserve… Read More

By

Not All Indexes Are Created Equal

19 Aug 2014

Acropolis will turn 12 in less than 10 days and I can’t help reflect on what has changed over that time and what has stayed the same. Since the beginning, we’ve used index funds, but the way we use them has changed fairly dramatically in some cases. Take small cap stocks, for example. A dozen years ago, we used exchange-traded-funds (ETFs) as the core component of our small cap allocation… Read More

By

The Truth About Global Growth

21 Apr 2014

Legendary investor Peter Lynch once said that if you spend 13 minutes per year on economics, you’ve wasted 10 minutes. Although I spend more than three minutes per year looking at economic data, I do tend to look a lot less than others in the industry.  Many years ago, I saw a study that showed that the connection between gross domestic product (GDP) and stock market returns were lowly correlated,… Read More

By

Morningstar’s Manager of the Year

16 Jan 2014

Markets were higher today on upbeat earnings and manufacturing data.  The S&P 500 closed at an all time high and is now up 0.07 percent for the year!  Who knew such a little return could be so exciting. Much of the excitement about earnings came from Bank of America (BAC), which posted its highest annual profit since the financial crisis.  Back in 2007, when BAC had a market capitalization of… Read More

By