25 Sep 2017

Changes to the Missouri Most 529 Plan

I received a package from Missouri Most last week highlighting a change to the college savings plan. For those investors, like me, that use the age-based options, Vanguard is expanding the stock/bond options to make the journey a little smoother for investors. Currently, there are five age categories, starting with zero to five years old, then six to ten years old, 11-15 years old, 16-18 years old and for 19-year… Read More

29 Aug 2017

Forecasting Expected Returns

“Price is what you pay.  Value is what you get.”  -Warren Buffet How can investors know the value of an investment?  Bond yields remain very low and stocks continue to climb higher across the globe.  Using typical valuation measures, markets everywhere look very expensive.  However, investors continue to pour money into them, so they must see value.  The value of an investment is subject to an uncertain future, so how… Read More

10 Jul 2017

It’s Not an Index Fund

Precision in language matters, though you wouldn’t know it from reading newspaper headlines (Gator Attacks Puzzle Experts).  It may seem like distinction without a difference, but I want to make a distinction today between passively managed funds and index funds. One of the biggest debates amongst investors is the old ‘active/passive’ debate.  I’ve spilled plenty of digital ink on this subject already (click here, here and here), but the basic… Read More

3 Apr 2017

A Long View of Non US Stocks

For what feels like the first time in forever, foreign stocks are outpacing US stocks so far this year.  The table above includes the MSCI All Country World exUS index, which combines all developed and emerging markets.  As of Friday, the MSCI ACWI is outperforming the S&P 500 by 1.79 percent. That contrasts with the results over the last five years ending in March, when the S&P 500 earned 13.3… Read More

9 Jan 2017

How Long is the Long Term?

One of the tried and true tenets of successful investing is taking a long-term perspective. Warren Buffet says that his favorite holding period is forever.  He doesn’t always hang on that long, but still recommends that you should ‘only buy something that you’d be perfectly happy to hold if the market shut down for 10-years.’ Regarded academic Jeremy Siegel wrote the buy and hold bible, titled ‘Stock for the long run,’… Read More

19 Dec 2016

Bond Market Fascinations: An Interview

Since the election, interest rates have risen across the curve.  The Federal Reserve raised short term interest rates last week for the first time this year, but perhaps more importantly, longer term rates have also risen, which means falling bond prices. Right now, the Barclays Aggregate Bond index is still positive for the year, but the gains are muted, especially compared to the 5.8 percent gain that they enjoyed just… Read More

5 Dec 2016

Occasionally, the Unlikely Happens

One of the most notable market reactions to the election is the rally in small cap stocks. For the month of November, the S&P 600 Small Cap index gained 12.55 percent, compared to a 3.70 percent gain for the S&P 500 index of large cap stocks.  It was fourth best month for the S&P 600 Small Cap index since its inception in 1994. While the results were definitely a surprise,… Read More

31 Oct 2016

Equity Risk Dominates Your Portfolio

When I describe ‘balance’ in a portfolio, here or in person, I am almost inevitably talking about an allocation that is somewhat evenly split between stocks and bonds.  I don’t have to specify that I am talking about how much money is in each allocation (forgetting for a moment all of the sub allocations). In recent years, however, some investment managers have pointed out that a portfolio that is evenly… Read More

24 Oct 2016

Prerequisites for Alternative Investments

One of the more popular categories of mutual funds over the past few years have been so-called ‘alternative’ funds.  Alternative investments, broadly defined, are strategies that seek returns that are uncorrelated from traditional investments like stocks and bonds. While alternative investments were once largely confined to private partnerships, they are now popular in mutual funds, or what the industry refers to as ’40 Act Funds.  Following the 2008 financial crisis, alternative… Read More