There is a wealth of academic research into what really drives higher expected returns. Simply put, expected returns = current market prices + expected future cash flows. Investors can use this basic equation
Continue reading...Attending to how markets work is important for you and your investment portfolio. Should you buy, sell, or hold tight? Before the news tempts you to jump into or flee from breaking trends, it’s critical
Continue reading...Some investors select mutual funds based on their past performance. Yet, past returns offer little insight into a fund’s future returns. For example, most funds in the top quartile (25%) of previous
Continue reading...Wouldn’t it be great to hold only top selections in your investment portfolio, with no disappointments to detract from your success? Of course it would. It would also be nice to hold a $100 million winning
Continue reading...Market pricing is about you, the market, and the prices you pay. When it comes to investing it helps to know what you’re facing. In this case, that’s “the market.” How do you achieve every investor’s
Continue reading...After taking a closer look at interest rates and inflation we come to the heart of the matter: When interest rates, inflation, or both are on the rise, what’s an investor to do?
Continue reading...Inflation is the rate at which money loses its purchasing power over time. As you might guess, there are many ways to measure such a squishy figure. There are various economic sectors, such as energy,
Continue reading...At its March 15–16 Federal Open Market Committee (FOMC) meeting, the U.S. Federal Reserve raised its federal target funds rate by a quarter-point. It was the first increase since December 2018, but it
Continue reading...Despite our fervent hopes that Ukraine’s sovereign rights would prevail over tyrannical aggression, it’s now clear that Vladimir Putin has doubled down on the latter.
Continue reading...The recent conflict between Russia and Ukraine is an important reminder that geopolitical risk is a part of investing in global markets. Navigating geopolitical events requires expertise and flexibility.
Continue reading...The underperformance of small caps in 2021 was driven by poor returns of small growth companies with low profits. These companies have underperformed historically. An approach that excludes small growth
Continue reading...Since 1926, the US stock market has rewarded investors with an average annual return of about 10% – the market’s long term average. But it’s important to remember that returns in any given year
Continue reading...Capturing the size, value, and profitability premiums in real-world portfolios requires expertise. Investors should be cautious about favoring one premium over another or one region over another based
Continue reading...Have you been reading the daily headlines—watching markets stall, recover, and dip once again? If so, you may be wondering whether there’s anything you can do to avoid the motion sickness.
Continue reading...It was a year of uncertainty and anticipation, of hopes for a return to a degree of normalcy following the onset of the COVID-19 pandemic in 2020. And it was a year that showed, again, the difficulty of
Continue reading...This is no surprise. The world is enormous. To cope with information overload, we engage in what behavioral psychologists refer to as heuristics. These are rules of thumb or mental shortcuts that take
Continue reading...How do you invest your money over the long term? If you’ve read much of our work, you’ve probably noticed we embrace evidence-based investing. But what does that mean?
Continue reading...Reaching a new high doesn’t mean the market will retreat. Stocks are priced to deliver a positive expected return for investors, so reaching record highs regularly is the outcome one would expect.
Continue reading...While both simulated and real-world data suggest momentum may not be suitable as a driver of long-term asset allocations, we believe momentum considerations can be integrated in a cost-effective way to
Continue reading...Many investors want their portfolios to do more than just pursue reliable premiums. They may also want to seek tax efficiency; reflect their environmental, social, and governance (ESG) values; respect
Continue reading...Yields reflect the aggregate expectations of all market participants, including opinions on how and when the Fed will act. And even if a crystal ball could reveal the timing and direction of the Fed’s
Continue reading...“News is, by definition, something that doesn’t last. It exists for only a moment before it changes. … It’s not important to living a good life. It’s not going to help you make better decisions.
Continue reading...Since 1991, one-year returns on US stocks have fluctuated widely. Yet weak returns occurred when inflation was low in some periods, and 23 of the past 30 years saw positive returns even after adjusting
Continue reading...For investors, it can be easy to feel overwhelmed by the relentless stream of news about markets. Being bombarded with data and headlines presented as affecting your financial well-being can evoke strong
Continue reading...Investment opportunities exist all around the globe, but the randomness of global stock returns makes it exceedingly difficult to figure out which markets are likely to be outperformers. How should investors
Continue reading...We view effective tax planning as a way to reduce your lifetime tax bill—or beyond, if you’re preparing for a tax-efficient wealth transfer to your heirs.
Continue reading...After last year’s economic shocks, we shouldn’t be surprised to see prices rebounding. But the potential for inflation is one among many factors investors take into account when agreeing on a price
Continue reading...How do we plan when we cannot know? The particulars may evolve, but it seems there are always an array of tax breaks to encourage us to save toward our major life goals—such as retirement, healthcare,
Continue reading...Value stocks, or those with low relative prices, have outperformed higher-priced growth stocks in the US over the long term. Similarly, the stocks of smaller companies have fared better than the stocks
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