Research

January 30, 2023

Victor on the ‘What Happens Next’ podcast: “How Should I Invest My Money?”

Victor was recently a guest on his friend Larry Bernstein’s ‘What Happens Next in 6 Minutes’ podcast, along with their dear friend and former colleague, Nobel Laureate Myron Scholes.
November 28, 2022

A Missing Piece of the SBF Puzzle

There’s been excellent coverage of the ongoing public drama surrounding Sam Bankman-Fried and FTX, but there’s an important piece of the puzzle that’s remained under the radar.
November 15, 2022

Who Wants Protection Like This?

The S&P 500 is down 15% over the past year, so you’d think it’d be a great time to own some portfolio protection. Unfortunately, that’s not the case.
September 26, 2022

A Sheep in Wolf’s Clothing

The risk of an investment makes the most sense when compared to an alternative. It’s a convention to take our local currency as the risk-less benchmark – but this choice, while convenient, can also be misleading.
July 25, 2022

July 2022 Investor Call Q&A with Victor & James

Thank you to all our Elm investors who joined us for our mid-year call!
July 7, 2022

Bitcoin is Nothing Either Good or Bad, but Sizing Makes It So

Bitcoin isn’t an inherently good or bad investment – but said investment can turn sour quickly if you’re not paying attention to sizing.
June 20, 2022

Night Moves: Is the Overnight Drift the Grandmother of All Market Anomalies?

When we first heard about the overnight effect, our first reaction was: that can’t be right! But after some more digging, we found plenty of evidence for what could be a major market anomaly.
May 23, 2022

Hassan and Ali Finsplain the $50 Billion Rise and Fall of Terra-Luna

It can feel like 2022 has been a pretty bad year for investing so far – but, in terms of what really matters, most investors are better off than they were at the end of 2021.
May 3, 2022

How I Learned to Stop Worrying, and Love the (Interest Rate) Bomb

It can feel like 2022 has been a pretty bad year for investing so far – but, in terms of what really matters, most investors are better off than they were at the end of 2021.
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.
February 8, 2022

Man Doth Not Invest by Earnings Yield Alone: A Fresh Look at Earnings Yield and Dynamic Asset Allocation

Shiller’s CAPE ratio is currently higher than it’s been for 98% of the past 120 years – that said, it doesn’t tell an investor everything on its own.
January 25, 2022

January 2022 Investor Call Q&A with Victor & James

In our first Investor Call, we discussed Elm’s performance over its first 10 years, our thinking behind some investment philosophies and what to expect from us in the future.
December 14, 2021

For Crypto Whales: When Less is More

Usually, the more optimistic we are about an investment, the more of it we’ll want to own. However, that relationship can be turned on its head…
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…
August 6, 2021

No Place to Hide: Investing in a World With No Risk-Free Asset

Now, more than any time in the past 70 years, investors are concerned that there’s no truly risk-free asset.
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…
June 1, 2021

Victor a Guest on Bloomberg’s Trillions Podcast: The Road to Index Investing

Victor was recently a guest on Bloomberg’s Trillions podcast, discussing everything from his experience to Elm’s expansion.
April 27, 2021

We’re All HODLRs Now

If you’ve been asking yourself the question: “To BTC, or not to BTC?” the market, in its infinite wisdom, may have just decided for you: we’re all HODLRs now, whether you like it or not.
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.
March 19, 2021

Elm research wins Bernstein Fabozzi/Jacobs Levy Award

We’re happy to announce that our paper ‘Smart Beta: The Good, the Bad and the Muddy’ has been awarded the Bernstein Fabozzi/Jacobs Levy Award for Outstanding Article!
November 23, 2020

Who is the Biggest Investor in the Stock Market, and Why Should You Care?

The US Treasury effectively “owns” part of the stocks held by certain US investors…and this huge-but-silent investor might get a lot bigger.
October 22, 2020

To Realize, or Not to Realize

With the US presidential election just a few weeks away, now is definitely a good time to think about capital gains taxes and how things may change.
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.
April 6, 2020

Introducing the Elm Partners All-Equity Portfolio For Non-US Investors

Encouraged by our investors, we’re introducing a new fund for Non-US investors: the Elm Partners All Equity Portfolio!
March 19, 2020

Taking Stock

Uncertainty over the public and economic impact of the coronavirus pandemic will keep markets extremely volatile – but admist such uncertainty, it’s a particularly good time to take stock of long-term return prospects.
December 11, 2019

Mind the Gap: Inequality and Diversification

Understanding the origins of wealth inequality is critical in the debate over what, if anything, to do about it. Are investment fees and taxes really to blame, or is there something else at play?
November 19, 2019

Negative Interest Rates and the Perpetuity Paradox

There is wide-ranging disagreement on the long-term impact of negative interest rates, but the real question is: are these rates a fleeting phenomenon, or are they the new normal?
October 30, 2019

There’s No Place Like Home: The Case For and Against Extreme Home Bias in Equity Investing

Is Home Bias really worth worrying about? Today, we’ll evaluate 10 of the most common arguments heard in support of home bias.
September 25, 2019

Home Biased: A Case for More Indexing

“Home Bias” refers to the trend of investing more heavily in one’s own domestic market than necessary. The question is: if everyone is doing it, does all of that bias cancel itself out?
August 20, 2019

Do US Industry-Sector Weights Explain the Higher Valuation of US vs non-US Equities?

US equities have consistently outperformed non-US equities over the past decade – so, what exactly does this mean for investors?
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?
Aswath Damodaran May 6, 2019

A Conversation with NYU Professor Aswath Damodaran

Victor sat down with NYU Professor Aswath Damodaran to discuss some of the biggest topics in finance today: from indexing, to factor investing, to why investors ignore momentum.
March 21, 2019

A Couple of Interviews with James & Victor

Catch up with James and Victor as they discuss Elm’s investment philosophy with Fintech Daily’s Efi Pylarinou and Mark Adelson of the Institutional Investors Journal.
March 11, 2019

When it Pays to Pay Capital Gains

One approach for efficient investing is to defer realization of gains while aggressively realizing losses. For investors with a steady stream of short-term capital gains, this can be improved – and in a seemingly counter-intuitive way.
George Costanza January 14, 2019

If George Costanza Were a Hedge Fund Manager

Investing is arguably about making predictions and placing bets accordingly – but there are some strategies where your predictions are correct, but you lose money anyway!
December 18, 2018

When They Won’t Accept That You Really Don’t Know, Tell Them About Mo

By Victor Haghani and James White Most of us working in the finance industry are used to being regularly called on to predict where different assets are heading. We figure […]
November 14, 2018

Introducing Elm’s All-Equity Portfolios at Fidelity

By Victor Haghani and James White Encouraged by some of our investors, we are introducing an All-Equity portfolio to our lineup of Separately Managed Account (SMA) programs at Fidelity. Elm’s […]
October 31, 2018

Reflections on the Mega Millions Lottery: Can a Lottery Ticket with Great Odds Still be a Bad Bet?

Last week, financial journalists tackled the lottery jackpot of $1.54 billion. We loved their work, but there was one question left unanswered…
October 15, 2018

The Annuity Puzzle: How Big is the Free Lunch Being Left on the Table?

The Savings Crisis is attributed to people not saving enough and making poor investments. We believe there’s another major culprit…
September 17, 2018

Measuring the Fabric of Felicity

We steer our financial course through life choosing how much to spend and how to invest what’s left. This is the essence of financial planning: an investment policy based on our life, varying opportunities, and preferences.
September 4, 2018

Tax Efficiency and Dynamic Asset Allocation: Can We Have Our Cake and Eat It Too?

We’re often asked about the tax efficiency of our dynamic investment approach, especially in regards to the tax-efficiency of our returns.
August 30, 2018

The Most Important Number Not Printed in the WSJ

When it comes to the long-term return of the equity market, our framework strikes many investors as high (at 5.3% above inflation) compared to the most popular valuation ratio.
July 17, 2018

Is Vanguard More Rolls Royce, or Hyundai?

By Victor Haghani and James White “What we obtain too cheap, we esteem too lightly.” – Thomas Paine, 1776 A physician thinking about investing with Elm asked us: “If I […]
April 6, 2018

A Penny Saved is Two Pennies Earned

Most of us associate the maxim “A penny saved is a penny earned” with Benjamin Franklin, but what he actually said is far more insightful: “A penny saved is two pence clear.”

March 12, 2018

Sensible Investing in a Nutshell: Robin Powell, The Evidence-Based Investor, interviews Victor

In this video: Robin Powell, the Evidence-Based Investor, in his “journey to uncover the truth behind investing” interviews Victor.
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.
January 29, 2018

US Tax Reform Leaves Even Less of the Pie for Individual Investors in Alternatives

The Tax Cuts and Jobs Act passed into law last month will increase the wedge between pre-tax gross and after-tax net returns.
January 17, 2018

New Year, New CEO, New Home

The New Year brings good news: not only does Elm have a new headquarters in the City of Brotherly Love, but we’re proud to announce James White as our new CEO!
December 20, 2017

A Brainteaser Double-Feature for the Holidays

Here are two little puzzles that we discussed at an Elm dinner last week in London – our guests were sufficiently tickled, so we thought we’d write them up to share with you.
December 11, 2017

Discussions on Risk Parity and the Sharpe Ratio

In our ongoing writing on the topic of investment sizing and portfolio choice, we recently published two articles that discuss the use of Sharpe Ratio in building portfolios.
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…
Elm Press in WSJ November 14, 2017

Elm in the Wall Street Journal

From The Wall Street Journal’s Sam Goldfarb: “Since 2011, Mr Haghani has run, from a small office near his home in London, Elm Partners Management LLC, an investment firm that now manages around $550 million of assets.”
November 9, 2017

The Chemistry of 10% More

In a world with two classes of assets – cash and equities – how can investors in aggregate increase their allocation to equities (given that, for every buyer, there has to be a seller) and so cash can’t come into or leave the market?
October 17, 2017

What Didn’t Happen on Black Monday 1987

I was 25 years old and had been on John Meriwether’s Arb Desk for just over a year, following two years working in Salomon’s Bond Portfolio Analysis Group…
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…
October 1, 2017

Elm research wins William F. Sharpe Award 2017

We must have said something insightful, because our coin-flipping research has been awarded the William F. Sharpe award for Institutional Investor Journals Paper of the Year!
September 26, 2017

Elm coin-flipping Research discussed in Economist Buttonwood article

From The Economist: “Who wants mediocrity?”
September 12, 2017

How Much Should the Tax Tail Wag the Asset Allocation Dog?

When it seems like equities aren’t what they used to be, it’s natural to consider reducing exposure.
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.
Elm Press in Financial Times May 8, 2017

Financial Times full page article about Elm (and Victor)

“Mr. Haghani has been on an intellectual journey that, in many ways, mirrors the evolution and central debates of the modern investment industry.”
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?
February 14, 2017

What Our Market Return Forecasts Really Mean: Equity Convexity and Investment Sizing

Most think of equities in terms of price, rather than yield – but, as we discuss below, equities do have important convexity properties.
February 3, 2017

Tax-Efficient Investing for US Citizens Long-Term Resident in the UK

US citizens who have been living in the UK for a long time are facing significant changes in how they’ll be taxed in the UK.
January 24, 2017

A Sharper Lens for Sizing Up Nickels and Steamrollers

In today’s world, it’s natural that many investors are looking for ways to earn a good return with limited equities exposure. Are the more common strategies working, or is there a better solution?
January 6, 2017

Vic’s TEDx Talk: Quitting is For Winners

In this TEDx talk, Victor explores why the use of a pre-defined stop-loss can be valuable in big life decisions, and how such an approach can both reduce losses and generate profits.
December 15, 2016

Podcast: Ignore Investing’s Mathematical Underpinnings at Your Peril

Victor recently joined Joe Weisenthal and Tracy Alloway on Bloomberg’s Odd Lots podcast to discuss mathematics in investing.
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?
December 2, 2016

Do Index Buyers Make Over-Valued Stocks More Over-Valued?

It’s time to dispel one frequently-voiced myth about indexing: if investors put their money into index funds or ETFs, they’ve unintentionally increased the market’s aggregate mis-valuation.
November 22, 2016

What does family planning have to do with investing?

We recently launched a new sub-section of our website, Elm Labs, as a place to experiment with interactive research and educational tools. Our first post: a (yet tricky) family planning puzzle.
October 26, 2016

Lessons from Betting on a Biased Coin: Cool heads and cautionary tales

You’re invited to a financial talk, but when you arrive, you’re offered $25 to bet on the flip of a coin for thirty minutes. How would you play?
October 18, 2016

Fees or Performance?

In a recent interview, I was asked: “Should investors focus on fees or performance?” Later, I realized that implies we need to make a choice between fees and performance, but we don’t – we can enjoy low fees AND good performance.
rare breed October 11, 2016

Active Index Investing: A contradiction in terms? Victor Haghani on Bloomberg TV

Victor recently appeared on BloombergTV to discuss our blog post, “What’s all the hoopla? Passive indexers are still a rare breed.”
September 30, 2016

What’s all the hoopla? Passive indexers are still a rare breed

Everyone’s talking about how passive indexing is taking over. That may be a good or bad thing, depending on perspective, but a better question might be: is that what’s actually happening?
September 5, 2016

What I learned from my daughter (about investing)

My daughter Jessica, a cognitive science major at university, caught me with a fun brain-teaser courtesy of Professor Phil Tetlock, author of “Expert Political Judgment: How Good Is It?”
July 27, 2016

What’s up with REITs?

There are several plausible explanations for REITs’ recent strength – one intriguing explanation that you may have heard about involves an upcoming change in how REITs are classified in indexes.
June 29, 2016

How to invest with Elm – Fidelity SMAs vs Fund

We offer US taxable investors a choice: a separately managed account at Fidelity, or the Delaware private Fund. In this note, we’ll discuss the main differences between the two.
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!
April 20, 2016

If You Want to Own Property, REITs Provide a Huge Head Start vs Direct Investment

If you’ve decided you want to invest in real estate, you may want to compare the merits of REITs versus investing in buildings directly…
Victor Haghani April 19, 2016

RealVisionTV: An Interview With Victor Haghani (8 min video)

Victor sat down with Raoul Pal, 25-year market veteran and founder of RealVisionTV to discuss his career, his thoughts on investing, and how Elm came to be.
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?”
January 5, 2016

Why Wyoming?

We’re often asked why Elm Partners’ US office is in Jackson Hole, Wyoming. Below is a short video shot by my son using his quadcopter a few days ago, all within a few miles of JHHQ – the answer will be obvious after taking a look.
December 4, 2015

In The News: Elm Launches Robo Portfolio Solution

Elm has officially launched its online Robo portfolio, based on the Active Index Investing strategy. Investor accounts, via Separately Managed Accounts at Fidelity, are now available.
December 3, 2015

Working Capital Review: A Conversation With Victor Haghani (Audio)

Victor sits down with Chris Riback of Working Capital Review to discuss his career, his thoughts on investing, and how Elm came to be.
November 5, 2015

Infographic: How much do taxes matter in investing?

Taxes can sometimes matter more than fees or performance, as different investment styles can lead to huge differences in taxes paid – and for high-rate investors, that can have a huge impact.
September 22, 2015

How well do global market-cap weighted indexes represent the true “market portfolio”?

The global equity market is a lot like a map: it’s a compromise. It’s system that’s worked for decades, but could we do better?
August 21, 2015

Video: How risky is your stock market?

In this short video, we’ll discuss the five perspectives on stock market risk – and, more importantly, which is the most relevant for you and your various investing objectives.
August 19, 2015

Revisiting the Expected Return of the Stock Market

We’re taking a moment to address a few lingering questions and comments from our recent short video, ‘The Most Important Number You Won’t Find in the Wall Street Journal’.
August 11, 2015

Video: The most important number you won’t find in the Wall Street Journal

In this short talk, we’ll show you how to compute the most important number that’s missing from the Wall Street Journal for yourself.
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.
July 15, 2015

Our Asset Allocation Methodology

In this note, we’ll describe the three main components of our Active Index Investing approach: the construction of the Baseline portfolio, as well as the value and momentum overlays that lead to a responsive portfolio.
June 24, 2015

Vanguard’s sweeping index changes (adding China A-shares & small caps)

Vanguard announced that it will be changing its approach to both capitalization stocks and the weights of Chinese equities. How will this affect the rest of the industry?
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.