Resources

Are You Compensated for Fat Tail Risk?

Larry Swedroe tackles new research into “fat tails” and how this seemingly intuitive measure of risk actually affects equity prices. Despite the fact that financial theory suggests stocks with high volatility should have higher expected returns—because investors cannot fully diversify away from the firm-specific risk in their portfolios—a growing body of empirical evidence demonstrates a…

Factor-Based Investing Remains Alive and Well

After looking into whether the “curse of popularity” has impacted factor premiums’ sustainability, Larry Swedroe can only conclude that it seems clear rumors of the death of factor-based investing are premature. Factor-based investing has achieved great popularity, with hundreds of billions of dollars in assets flowing into funds that offer exposure to factors such as…

Realizing Tax Efficiency

With taxes on our mind these days — thanks both to the recently enacted Tax Cut and Jobs Act of 2017 and the fast-approaching tax day, this year falling on April 17 — this month’s InFocus shares a collection of resources and insights that take a wide-eyed look at the importance of achieving a tax-efficient…

Hope Deferred Makes the Heart Sick

Tomorrow is never promised. Tim Maurer on why it’s entirely responsible to budget for unabashed enjoyment. “Hope deferred makes the heart sick, but a longing fulfilled is a tree of life.” So reads a Solomonic proverb penned in the 10th century B.C. Consider with me, however, a contemporary application of this ancient wisdom, especially in…

Warren Buffett’s Secret Sauce Loses Its Flavor

In a recent article, Wall Street Journal columnist Jason Zweig noted that Berkshire Hathaway’s stock had underperformed the S&P 500 Index over the 10 years ending in 2017, 7.7% versus 8.5%. Zweig hypothesized that the reason for the underperformance is that the size of Berkshire Hathaway’s portfolio has grown so large that it creates a burden…

Are You a Complainer, Consumer or Contributor? 

Tim Maurer explores how the role we fill as learners and leaders can have wide implications in both our personal and professional lives. Are you a Complainer, Consumer or Contributor in the workplace? In Adam Grant’s book, Give and Take, he differentiates between three types of people–Givers, Matchers and Takers–categorizations that have implications in both our…

Active Management Fails in Fixed Income

Larry Swedroe explains why active bond fund managers not only fail to outperform, but may also offer investors only the illusion of portfolio diversification. There is a myth that active bond fund managers want and need you to believe. It goes something like this: “Sure, active stock picking isn’t likely to work, but in fixed…

Investors Love Lottery Stocks 

Larry Swedroe looks at research on how demand for such equities could play an important role in explaining the beta anomaly. There are several anomalies that modern financial theory has to deal with. Perhaps the most well-known anomaly for both the CAPM and the Fama-French three-factor models is the existence of momentum in all asset…

Swinging for Smiles

EAT. RELAX. & HAVE FUN! For the first time ever, TDASF is hosting Swinging for Smiles in conjunction with the TDA Meeting. The event will take place on Wednesday, May 2 from 7-10 pm at Topgolf San Antonio. Included with all ticket purchases are two hours of Topgolf play, beer and wine, appetizers, dinner, prizes,…

Recency Bias Can Derail You

Larry Swedroe tackles performance, international equity valuations and the perils of recency bias. For the 10-year period 2008 through 2017, a very wide dispersion in returns has existed in markets. As the following table shows, U.S. stocks far outperformed international stocks, and growth stocks outperformed value stocks. Given these results, it’s no surprise I have…

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