Zero Commission Revolution
October 24, 2019
Sending shockwaves across the investment world, Charles Schwab announced zero commissions for stock and exchange-traded fund (ETF) trading effective October 7 (mutual funds will still have a small cost to buy and sell). Rival brokers, TD Ameritrade, E*TRADE, and later, Fidelity, followed suit. The move to zero commission trading is aimed at both keeping clients […]
Factor Primer Series: Small-Cap
October 10, 2019
Returning to our series on factor investing (What is a Factor?), today we turn our attention to small-cap stocks. As a reminder, last time we defined factors as a source of excess return that is sensible, persistent over long time periods, pervasive across markets, and cost-effective to capture. What is the Small Cap Factor? The […]
The Positives of Negative Interest Rates
September 26, 2019
Negative interest rates are unbelievable. In fact, in many ways, they were inconceivable until just a few short years ago. Interest rates had a theoretical stopping point at 0% in past financial theory. After all, why would someone lock in a negative return on an investment? Wouldn’t they just hold cash instead? It turns out […]
Factor Investing Primer Series: What Is a Factor?
September 12, 2019
Factor investing, sometimes referred to as smart beta or enhanced indexing, is rooted in academic research. In their attempts to better understand the market, researchers have uncovered a number of persistent anomalies in the market. They sought to explain, then systematically exploit these “factors” in the market. As the breadth of this research evolved, researchers […]
How and When to Invest That Bonus Money
August 27, 2019
To invest or not to invest? That is the question. For financial professionals (private equity professionals, investment bankers, and asset managers) this question surfaces on an annual basis as bonuses are paid. After determining your saving priorities, a decision must be made about how to deploy the cash. Since bonuses and carry are such a […]
Indexing – Not as Easy as It Seems
August 22, 2019
With practically every area of the market up significantly this year, the appeal of index funds has been growing as well. Investors are attracted to the broad diversification, low cost, and tax efficiency index funds provide, and as a result, flows into index strategies eclipsed $1.6 billion in 2017 and 2018, according to Forbes. In […]
Child’s UTMA is Ending – What Protection Exists?
August 13, 2019
Uniform Transfers to Minors Act, or UTMA, accounts are a popular way to hold investments and bank accounts for minors. Such accounts are owned by the minor but controlled by a designated adult custodian. The minor becomes the outright owner of the account assets when he or she reaches the age of majority specified in […]
Market Volatility Returns
August 8, 2019
Volatility returned with a vengeance this past week, interrupting what has otherwise been an impressive first seven months of the year for global stocks. Worldwide markets have fallen 5% since the beginning of August as investors sold out of equities and moved into the safety of bonds. What is causing this volatility? Will it impact […]
Mind the Valuation Gap
July 25, 2019
Growth has continued to outperform value in 2019, continuing what has become a decade long trend. For the year, growth stocks have outperformed value stocks 25.7% to 18.1%*. Going back 10 years, growth has outperformed value 16.5% to 13.2%* on an annualized basis (*as of July 15, 2019 using the Russell 1000 Growth and Russell […]
Picking Up Pennies
July 11, 2019
In investments, there’s not much more boring than cash. Sure, it provides immense comfort when the markets go south, but in the long-term, cash is the piece of your portfolio which is basically set up to fail versus inflation. By that measure alone, it’s exposure should be limited. Even so, cash still plays a critical […]
Behaving Badly in Las Vegas
June 27, 2019
There is arguably no better place in the world to observe bad behavior than on the Las Vegas Strip. After all, “What happens in Vegas, stays in Vegas.” However, when it comes to behaving badly, we investors can give Vegas casino-goers a run for their money. At the 2019 AICPA ENGAGE wealth management conference in […]
Annoying Averages
June 13, 2019
Growing up in school, no one wants to be average. From the start, averages are ingrained into us, and behaviorally, we always want to be better than average in everything we do. Take this question: Are you an above average driver? My guess is you’d answer yes. And I’d venture to say that more than […]