Concerned About Falling Dollar: What to Do?
My last post addressed the concerns investors had about the dollar potentially losing its status as a reserve currency. Today, we’ll take a look at what actions you might consider taking if that was a risk about which you are concerned....
The Rally Nobody Noticed: Municipal Bonds
Historically, in terms of yields, because of their federal tax exemption, AAA-rated municipal bonds have traded at a discount to Treasuries. Over the long term, AAA-rated intermediate-term municipal bond yields have typically traded between 75-85 percent of the yields on...
When The Very Best Fail, Should You Be Trying?
Recently, I received an email from Russell Investments announcing that they had terminated several money managers and hired new ones. The funds that had changes in management were the Russell Emerging Markets Fund, the Russell International Developed Markets Fund, the...
What Happens If The Dollar Loses Its Status As Reserve Currency?
Earlier this month, the People’s Bank of China announced that it would double the allowable trading range for the yuan against the dollar to 2 percent from a midpoint rate it sets every day. This move provides evidence that the government is...
Socially Responsible Investing And The Price Of Sin
Summary Socially responsible investing encompasses many personal beliefs, not just one set of values. Some investors don’t wish to invest in the “sin stocks” of companies whose products go against their morals. By avoiding the “sin stocks,” some investors may...
Dividends and ‘The Magic Pants’
Summary While dividends may comprise a significant portion of total returns, they don’t add any explanatory power to future returns. Approximately 60 percent of U.S. stocks and 40 percent of international stocks don’t pay dividends. The total returns to investors...
Expected Stock Returns Around the Globe
In order to rationally develop an investment plan you need to estimate long-term returns for the asset classes in which to invest – without doing so you cannot determine how much to allocate to risky stocks and how much to...
Are Demographics Really Destiny?
I recently came across an article on Seeking Alpha by The Statistical Investor entitled “Demographics Are Destiny: World Population Trends“. The article begins: “As they say, demographics is destiny. Just ask Japan. The longer your investment horizon, the more exposed...
Reversion To The Mean Phenomenon: Part IV
This final post of the RTM series will explore the importance of discipline. The academic evidence demonstrates that the determinant of almost all of the risk and return of a portfolio is its asset allocation. It’s important to add that because of...
Reversion To The Mean Phenomenon: Part III
Our last post looked at the issue of what is expected to happen as a country migrates from frontier to developed markets. We should expect to see the cost of capital fall in such a country. Among the reasons is that regulatory...
