March 23, 2022
Do Options Belong in the Portfolios of Individual Investors?
In a recently-published article in the Journal of Derivatives, we ask whether or not options make sense for a broad class of investors.
October 20, 2021
Golf Guru Scott Fawcett Will Make You a Better Golfer, and a Better Investor Too
What does professional golf have to do with becoming a better investor? As it turns out, a surprising amount…
July 14, 2021
Are Market Capitalization Weighted Indexes Too Concentrated in the Biggest Stocks?
We’re often asked if the high concentration of a few select companies at the top of the S&P500 is something to worry about. For us, it’s a “no” on three counts…
April 6, 2021
Spending Like You’ll Live Forever
Many of our readers are involved with various forms of endowments – and there are lessons to be learned from the question of how one should invest and spend when freed from the complications of taxes and human longevity.
June 3, 2020
Steadfast, Greedy, or Fearful?
March 2020 packed 2 ½ years of normal U.S. stock market volatility into one month. How should an investor respond to such volatility?
May 13, 2020
Back to the Future: Reviving a 19th Century Perspective on Financial Well-Being
We tend to assess our net worth by the market value of our assets – but it might be more natural to think of it as a stream over time.
April 16, 2020
George Costanza At It Again: The Leveraged ETF Episode
George Costanza returns for a lesson on investment sizing – more specifically, how overly-aggressive sizing can turn a good trade into a losing one.
July 16, 2019
Smart Beta: The Good, the Bad, and the Muddy
Smart Beta is one of the hottest topics in finance, and everyone wants to know: is the stock market largely efficient, or are there inefficiencies that investors can profit from?
February 26, 2018
What Gamblers Can Teach the Buy-and-Hold Crowd
The ongoing attack on stock-picking waged over the past 65 years now has the upper hand – it’s become part of the conventional wisdom that investors should invest primarily in index funds.
November 26, 2017
A Brief History of Sharpe Ratio, and Beyond
Early in the 1950s, academics and investors started proposing a variety of summary statistics to capture in a single number the quality of an investment – no small feat, as history shows.
November 20, 2017
HHHHHHHHHHHH: Is there a message in there?
The 12-month winning streak of the stock market through the end of October reminded me of a Friday afternoon on the Salomon trading floor…
October 16, 2017
Some Clarity on Risk Parity
Google “risk parity” and you’ll see a grab bag of conflicting results: articles and posts trying to explain what it means, what effect it might have, how it affects risk, etc.
October 2, 2017
Market Multiple Mean-Reversion: Red Light or Red Herring?
While there may be reasons to worry about the current price levels of U.S. equities, but…
August 7, 2017
When (if Ever) Has it Paid to Wait for a Stock Market Correction?
An investor once told us she wanted to add to her account, but felt the market was so high that she should wait for a correction before investing.
May 23, 2017
Our Coin Flipping Research in the Journal of Portfolio Management
The research we conducted into how people bet on a computer-generated coin-flip they are told is biased has been published in the Spring 2017 edition of the Journal of Portfolio Management.
April 11, 2017
What’s Past is NOT Prologue
We recently asked our readers to participate in a coin-flipping experiment, and over 700 responded. In this note, we’ll be diving into the results, exploring what they mean, and what we could possibly learn from them.
March 8, 2017
What’s the Best Way to Get Invested in the Market?
A few friends asked me how to go about putting more of their savings into the stock market. Is it better to jump in all at once, to average-in over time, or to wait for a market correction?
December 9, 2016
How much of a good thing is best for you?
You can invest in only two assets: a risk-free asset and public equities. Your choices are: A) 100% risk-free, or B) 10% risk-free and 90% equities. What sort of returns would make you choose B?
May 27, 2016
Elm’s strategy in The Journal of Portfolio Management
Our research paper, “A Case Study for Using Value and Momentum at the Asset Class Level”, was recently published in The Journal of
Portfolio Management!
March 23, 2016
The Unexpectedly High Expected Return of Global Equities
It seems just about everyone I talk to these days is underwhelmed by the long-term expected return of the global stock market. I, too, am more worried than usual…but not for the same reason.
January 26, 2016
Return chasing can be hazardous to your wealth
“Before I tell you what I do, I’m going to ask and answer the most important question you should put to me: Who is losing the money that I’m going to make for you?”
July 18, 2015
ETFs: Better Than Mutual Funds for Long Term Investors too?
We invest with a long-term horizon, and believe that ETFs have three advantages for long-term investors like us: 1) insulation from trading costs, 2) tax efficiency, and 3) cost structure.
March 8, 2013
Vic’s TEDx talk: Where are all the Billionaires?
In this TEDx talk, we detail the basics of Active Index Investing® and how it combines the best features of low-cost index funds with the most successful aspects of active management.