Market View
25.08.2017 | Investment newsletter
Quit Monkeying Around!
In the world of investment management there is an oft-discussed idea that blindfolded monkeys throwing darts at pages of stock listings can select portfolios that will do just as well, if not better, than both the market and the average portfolio constructed by professional money managers. If this is true, why might it be the case?
THE DART BOARD
Figure 1 shows...
28.07.2017 | Quarterly report
Quarterly Market Report Q2 2017
This report features world capital market performance and a timeline of events for the past quarter, plus the year in review. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.
25.07.2017 | Investment newsletter
Getting What You Don’t Pay For
Costs matter. Whether you’re buying a car or selecting an investment strategy, the costs you expect to pay are likely to be an important factor in making any major financial decision.
People rely on a lot of different information about costs to help inform these decisions. When you...
14.06.2017 | Investment newsletter
When Rates Go Up, Do Stocks Go Down?
Research shows that, like stock prices, changes in interest rates and bond prices are largely unpredictable (1). It follows that an investment strategy based upon attempting to exploit these sorts of changes isn’t likely to be a fruitful endeavor. Despite the...
31.05.2017 | Investment newsletter
The Uncertainty Paradox
Doubt is not a pleasant condition, but certainty is an absurd one.
Voltaire
“The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less...
27.04.2017 | Investment newsletter
Going Global: A Look at Public Company Listings
Trivia time: how many stocks make up the Wilshire 5000 Total Market Index (a widely used benchmark for the US equity market)?
While the logical guess might be 5,000, as of December 31, 2016, the index actually contained around 3,600 names. In fact...
27.04.2017 | Quarterly report
Quarterly Market Report Q1 2017
This report features world capital market performance and a timeline of events for the past quarter, plus the year in review. It begins with a global overview, then features the returns of stock and bond asset classes in the US and international markets.
29.03.2017 | Investment newsletter
Investment Shock Absorbers
Ever ridden in a car with worn-out shock absorbers? Every bump is jarring, every corner stomach-churning, and every red light an excuse to assume the brace position. Owning an undiversified portfolio can trigger similar reactions.
In a motor vehicle, the suspension system keeps the tires in contact with the road and...
24.02.2017 | Investment newsletter
The Reality of Models
Checking the weather? Looking at a map of the world to plan your next vacation? Guess what—you’re using a model. While models can be useful for gaining insights that can help us make good decisions, they are simplifications of reality.
One example of a model is a weather forecast. Using data on current and past weather conditions, a meteorologist makes a number of assumptions and...
27.01.2017 | Investment newsletter
BEARINGS JANUARY 2017
A Vote for Small Cap Stocks?
In the days immediately following the recent US presidential election, US small company stocks experienced higher returns than US large company stocks. This example helps illustrate how the dimensions of expected returns can appear quickly, unpredictably, and with large magnitude.
Average returns for US small company...