The flowers sure do smelly lovely. Will they lead to an unpleasant financial odor? Passive investing (i.e. indexing) is all the rage. Academics preach its virtue. They justify their existence by cranking out study after study concluding most managers don’t outperform the indexes all of the time. Massive mutual fund complexes (we’re lookin’ at you [...]
As one of the oldest and best-known indexes the DJIA is not only a benchmark for the world’s largest stock market but, also, a barometer of global confidence. This chart details the DJIA’s performance since 1896. It’s interesting to note how the highs and lows have reflected the U.S. economy. Greater still is [...]
Leading up to the November elections nervous investors uttered variants of, “Everyone is saying the markets are gonna fall if Trump is elected.” Apollo’s view was usually a variant of, “Really? Who is this ‘everyone’ and why should we listen to them?” In hindsight the ‘Trump Bump’ has returned 11.6% to the S&P 500 companies [...]
I believe I've passed the age of consciousness and righteous rage. I’ve found that just surviving was a noble fight. I once believed in causes too. I had my pointless point of view. And life went on no matter who was wrong or right. - from Billy Joel's "Angry Young Man" Life advice from the [...]
How did the DJIA perform in 2016? What were the drivers? How does that compare over the trailing 10 years? Let's have a look...
The typical investor is almost always his/her own worst enemy. Overconfidence, behavioral biases and emotional decisions conspire to ensure investment returns trail not only most major asset classes but even inflation. Consider the ROR of the average investor over the past 20 years: 2 SOURCES: JPMorgan Asset Management, Barclays, FactSet, S&P, Dalbar. 60/40 and 40/60 [...]
Advice from the SEC’s Office of Investor Education and Advocacy to help investors make better informed investment decisions and avoid common scams in 2017: Always check the background of an investment professional—it is easy and free. You can find details of an investment professional’s background and qualifications through the search tool on the SEC’s website [...]
Religion and politics are not to be discussed in polite company. We get it. But indexing? It seems few topics draw the ire of the zealots and ideologues. Indexing is but a tool. It’s neutral. It has its pros and cons. It has its place. But to blindly marry oneself to an ideology? We are [...]
Passive investing (i.e. indexing) has been beaten into our heads as the “best” method of achieving our investment goals. There’s a lot to like. Internal operating expenses are low and, generally, most actively-managed funds cannot beat or exceed their benchmark. So why not index? Here’s the inconvenient truth. Investors focusing solely on cost and return [...]
Are advisors worth their fees? Research shows the answer is a resounding “yes,” albeit not for the reasons you might have supposed. Find out why here.