24 Nov 2014

Why Invest in Commodities?

I was emailing a friend who works in the industry on Friday about asset classes that are giving us trouble this year. We both have diversified portfolios for our clients and when you’re truly diversified, something is always giving you a headache. For us, for example, micro cap stocks as measured by the Russell Microcap index are a real aggravation this year, down -1.85 percent this year through Friday compared… Read More

By Tags: , ,
21 Nov 2014

A Look Inside Superior Performance

On Wednesday, I met with a client that I’ve worked with for more than 10 years. In fact, we signed the new account paperwork the night before my second daughter was born. As you might expect, my wife was not thrilled. In the late 1980s, this couple made a substantial investment with an extremely well known investor – someone I grew up watching on Wall Street Week with Louis Rukeyser…. Read More

By Tags: ,
18 Nov 2014

Japan is in Recession. When is it Not in Recession?

Not a single major Wall Street economist forecast that the Gross Domestic Product (GDP) in Japan contracted in the third quarter, so yesterday’s economic release that showed an annualized loss of -1.6 percent came as a real surprise. The average forecast, according to the Wall Street Journal was for a positive gain of 2.25 percent. The chart below shows the growth of the US and Japanese economy from an equalized starting… Read More

By Tags: ,
13 Nov 2014

Financial Advisor Magazine Highlights Acropolis 401(k)s

Hopefully, The Department and Labor (DOL) and Security and Exchange Commission (SEC) will continue to move towards placing employees first in company 401(k) plans.  One step they are considering in raising the legal bar on the advisors to 401(k)s.  Acropolis fully supports a stronger fiduciary standard, the lowering of plan fees, and encouraging more effective employee education, as profiled in Financial Advisor Magazine article below. Click here to read the… Read More

By Tags: , ,
24 Oct 2014

Anatomy of a Short Squeeze

Although it’s come and gone, I am still thinking about the price spike in the 10-year US Treasury note that occurred last Wednesday. Someone from Blackrock told me yesterday that it was the most volatile day for the 10-year since 1980, which implies that it was more volatile than 99.91 percent of all of those trading sessions. You can see from the chart that all of wilding was in the… Read More

By Tags: , , ,
22 Sep 2014

What if You Called The Bond Market Perfectly?

It’s an interesting question. The ability to call the tops and bottoms with perfect accuracy is considered the “holy grail” of bond market investing. We spend a great deal of effort talking to clients about the risk of trying to make speculative calls – the risk of being wrong of course. Just as an exercise I thought it would be neat to imagine what it would be like if we… Read More

By Tags: , , , , , ,
16 Sep 2014

The Naked Truth About Actively Managed Mutual Funds

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 Tags: , , ,
5 Sep 2014

Why We Avoid Junk Bonds

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 Tags: , , ,
3 Sep 2014

Falling Dollar Fallout

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 Tags: ,
27 Aug 2014

A New Milestone: S&P 500 Closes Above 2,000

For the 30th time this year, the S&P 500 closed at an all-time high.  Yesterday was an even bigger deal because it crossed a big round number: 2,000.  While that shouldn’t mean anything special, it does.    Investors are humans that are subject to all kinds of psychological biases and round number attachment (my name) seems to be one of them.  If you go to Wikipedia, you can get a… Read More

By Tags: ,