Acropolis was an early adopter of exchange-traded funds (ETFs). As the name implies, an ETF is a fund that trades on an exchange. It’s like a mutual fund in that it is generally diversified, but like a stock, it trades throughout the day. When we got going in 2002, ETFs were about ten years old. The first version was State Streets Spyder, which still trades today with the ticker SPY…. Read More
For nine years now, Acropolis has hired a third party to evaluate the market impact of our trading. Whenever we talk to clients about rebalancing, tax-loss harvesting, raising cash for withdrawals, or putting new money to work, our traders work with the portfolio management teams to figure out what trades ought to occur and then the traders take those trades to market. Last year, our traders went to market almost… Read More
I’d like to meet the person in Washington who comes up with the silly names for laws just for the purpose of creating a catchy acronym. Case in point is the newest iteration of the Setting Every Community Up for Retirement Enhancement, better known as the Secure 2.0 Act. The Act has a number of provisions that raise financial planning issues for a lot of people. For example, were you… Read More
You might not be surprised to learn that I love investment-related podcasts. I listen to about a dozen of them fairly regularly and am often impressed by the guests they get. A recent episode of the Meb Faber Show featured an hour-long interview with Professor Gene Fama. Fama is probably the most influential academic in modern finance after creating the Efficient Market Hypothesis in the early 1970s and co-creating the… Read More
These are trying times for investors. We all know that markets are risky, and there are extended periods of bad times, but historically, the good times have more than offset the bad times, and the risks have been worth taking. In an attempt to ease the pain of down markets, some investors have pursued what is commonly called low-volatility funds. Other names for similar strategies include minimum variance and minimum volatility, but… Read More
I’ve focused on bear markets for the last two weeks because the stock market briefly dipped into bear market territory a few weeks ago. Since then, markets have recovered some of what was lost, although there is still a way to go to get back to even. One of my colleagues pointed out that as long as your portfolio could reliably provide the cash flow that you need to live… Read More
There is a lot of hype in our industry about ESG investing, which is the new way to talk about socially responsible investing (SRI). The new name, ESG, stands for Environmental, Social, and Governance. The last time I wrote about socially responsible investing was in 2014, and you can read the article here. I wrote that we don’t use ESG funds (which I called SRI back then) unless clients direct… Read More
When markets are falling, clients often ask about whether certain ‘risk mitigation’ strategies make sense. Mitigation isn’t a word you use every day unless you’re a lawyer or in the insurance industry, but the meaning is simple: it is an action that reduces the severity, seriousness, or painfulness of something. Usually, when someone talks about it from an investment standpoint, they usually mean some kind of complicated hedging strategy. Over… Read More
Our exposure to Russian stocks is very low, and we don’t have any exposure to Ukrainian stocks. To figure out our exposure, I looked at our holdings as of Friday and found that we have 2.6 percent of all of the money outside of the 401k plans that we manage in emerging markets stocks. Although we hold more than a dozen diversified emerging markets-based mutual funds and ETFs, 92.2 percent… Read More
Over the weekend, I was looking at some research from JP Morgan that showed the percentage weight of the top ten stocks in the S&P 500 over time, and I admit that I was surprised. When we started Acropolis, 20-years ago in August, the top ten stocks made up about 24 percent of the index. I thought that was pretty high back then and was one of the reasons that… Read More
