Investment Theory

TIPS Do Offer Valuable Inflation Protection - But You Need to Decide What You’re Protecting

May 7, 2024 — By Victor Haghani and James White [note] This not is not an offer or solicitation to invest. Past returns are not indicative of future performance.[/note] We've been hearing a lot of this: In mid-2020, I got worried about inflation. I decided to protect myself against a jump in my living expenses by buying U.S. Treasury Inflation Protected Securities (TIPS). I was right to worry about inflation - prices are 21% higher today than they were

Investment Theory

Merton Share Derivations: What's in your denominator?

May 2, 2024 — By Jeffrey M. Rosenbluth and James White [note] This not is not an offer or solicitation to invest. Past returns are not indicative of future performance.[/note] 1.  Introduction The Review of Economics and Statistics published a pair of companion papers in 1969. "Lifetime Portfolio Selection by Dynamic Stochastic Programming", by Paul Samuelson and "Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case", by Robert Merton. Both deal with the question of how to allocate one's portfolio

Investment Theory

Thinking Outside the BOXX

February 27, 2024 — By Victor Haghani and James White [note] Thank you to Larry Hilibrand, Charles Wright, Dave Blob and Jon Seed for their helpful comments, and to Wes Gray and Larry Lempert for discussing specifics of their ETF with us. The opinions expressed in the article are not necessarily shared by those who gave us help. Nothing in this note should be taken as tax advice, or investment advice, or an offer or solicitation to invest. Past

Investment Theory

Sharpe’s Arithmetic and the Risk Matters Hypothesis

December 1, 2023 — By Victor Haghani, Vladimir Ragulin and James White [note] This not is not an offer or solicitation to invest. Past returns are not indicative of future performance. We thank John Campbell, Jeffrey Rosenbluth and Mark Grinblatt for their help and encouragement. All errors are our own.[/note] In Lake Wobegon, all the women are strong, all the men are good-looking, and all the children are above average.  - Garrison Keillor In 1991, William Sharpe made perhaps

Investment Theory

A Closer Look at "Cut Your Losses Early; Let Your Profits Run"

August 7, 2023 — We've all heard the mantra "Cut your losses early; let your profits run"...but does it really make sense?

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