Should You Include International Bonds In Your Portfolio? – Part I
Today begins a two-part series on international bonds and whether or not they belong in your portfolio. Broad diversification of risk is one of the prudent rules of investing – since it’s the only free lunch in investing, you might...
Should People Listen To John Hussman’s Forecasts?
In my book, Think, Act, and Invest Like Warren Buffett, I noted that the Oracle of Omaha advised investors: “We have long felt that the only value of stock forecasters is to make fortune-tellers look good. Even now, Charlie (Munger) and I...
Is The Stock Market ‘Overgrazed’?
There’s an interesting new paper by Claude Erb, “Has the Stock Market Been Overgrazed?” He begins with noting that over time (since the 1920s), the beta, size and value premiums have all declined. He then asks: “What if too many...
The Efficient Market Hypothesis, Fact Or Fiction? Part 4
Today concludes our four-part series on the efficient market hypothesis. While the EMH helps us understand how markets work, in terms of investment strategy it really doesn’t matter whether markets are efficient or not. The only thing that really matters is whether...
Do Dividends Lower Stock Prices?
There are many investors who have a hard time accepting the fact that when a company pays a dividend the payment results in a permanent relatively lower price (relative to what the price would have been the dividend had not been paid),...
May, The Silly Season, Is Upon Us
One of the more persistent investment myths is that the winning strategy is to sell stocks in May and wait to buy back until November. While it is true that stocks have provided greater returns from November through April than...
What Exactly Is Risk?
This is the first of a two part series that aims to define risk. Since we live in a world without crystal balls that allow us to clearly see the future, prudent investing is all about the management of risk...
What Exactly Is Risk: Part II
Today concludes our two-part feature that aims to define risk. Not being able to do so is a problem for both advisors and investors. Alternative Definition of Risk Risk can also be defined as the probability of not achieving your financial objective...
The Efficient Market Hypothesis, Fact Or Fiction? Part 3
Part one of our series introduced the efficient market hypothesis. Part twoexplored evidence in the mutual fund and pension plan worlds that showed that while the EMH fails all the tests of efficiency, it passes the only test that really matters –...
The Efficient Market Hypothesis, Fact Or Fiction? Part 2
Yesterday, we discussed the history and overview of the efficient market hypothesis. Today we’ll look at some of the evidence on the efforts of mutual funds and pension plans to generate alpha. Mutual Funds Each year, Standard & Poor’s publishes its Indices...
