Resources

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…

Factor Performance Across Business Cycles

A recent study explores how Fama-French factors perform across various stages of recession and recovery. Arnav Sheth and Tee Lim contribute to the literature on the performance of factor-based investment strategies through their December 2017 study, “Fama-French Factors and Business Cycles.” In it, they examined the behavior of six Fama-French factors—market beta (MKT), size (SMB),…

Expect Volatility

Dips in the stock market over the last few days jolted a lot of investors. But, as Buckingham’s Sue Stevens explains, volatility is normal, and the best course of action right now is simply to do nothing. The past two years have seen an unusually low level of volatility in the stock market. That can…

Yet More Investing Lessons from 2017

Larry Swedroe concludes his list with 2017’s lessons eight through 10. Every year, the markets offer lessons on the prudent investment strategy. So far, we’ve covered what they taught us last year in lessons one through three and four through seven. Today, we’ll finish off 2017’s list with lessons eight through 10. Lesson 8: Hedge funds are not…

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