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joincolossus.com) Finance Christine Benz and Dan Lefkovitz talks markets with Jeremy Grantham of GMO. ritholtz.com) Joe Weisenthal and Tracy Alloway talk multi-strategy hedge fund math with Dan Morillo, co-founder of Freestone Grove Partners. (joincolossus.com) Barry Ritholtz talks with Joe Lonsdale of 8VC.
rcmalternatives.com) How skew and kurtosis should play a role in portfolio construction. papers.ssrn.com) The PEG ratio isn't much of a market timing tool. Skew Why investors avoid positive-skew investment strategies. mailchi.mp) Round-ups A round-up of recent white papers including 'A New Paradigm in Active Equity.'
This is as true for professionals as it is for amateurs; it’s also true in music, film, sports, television, and economic and market forecasting. Economic Innumeracy : Some individuals experience math anxiety, but it only takes a bit of insight to navigate the many ways numbers can mislead us. Bad Numbers : 4.
One way that advisors can help bridge this gap is by using Historical Market Visualization (HiMaV) as a more intuitive alternative for illustrating retirement income strategies. What works about HiMaV is that it grounds financial projections in a story-based context. It's about developing a dynamic spending plan (e.g.,
This weekend Jeff Sommer discussed a DFA research paper on market timing; both are well worth your time to read. The broad strokes are: Market timing is extremely difficult, very few people (if any) do it consistently well. Low Stakes : The most successful market timers are often those people who do not have actual assets at risk.
Top clicks this week Three assets that don't diversify your portfolio as well as you think. morningstar.com) The problematic math of passing down generational wealth. awealthofcommonsense.com) The S&P 500 is now nearly 40% of global market cap. rogersplanning.blogspot.com) How market consensus forms.
Top clicks this week How Morgan Housel invests his portfolio. capitalspectator.com) The credit markets are very different than they were in 2009. aswathdamodaran.blogspot.com) How to make the math behind home ownership work (or not). etf.com) The hardest thing about being an investor is deciding what to focus on.
If only there were some ways to prevent investors from interfering with the markets greatest strength the incomparable and guaranteed ability to create wealth by compounding over time. Drawdowns, corrections, and crashes are not the problem your behavior in response to market turmoil is what causes long-term financial harm.
But that’s not all : I also have the opportunity to invest those dollars : I can buy a broad market index, expecting it’ll appreciate; I can buy bonds and enjoy the income they yield; I could purchase real estate, which either gives me a place to live or rent out for income; I could also use that money to start or build a business.
But suddenly they find themselves sitting on an uncomfortably large percentage of their portfolio in a single name. To help us unpack all of this and what it means for your portfolio Let’s bring in Meb Faber He’s the founder and chief investment officer of Cambria. And that’s the broad market.
Bill Hester from Hussman Funds had a lengthy write up on diversifiers that track what he called Bear Market Cumulative Returns (BMCR). A portfolio that goes narrower than an S&P 500 500 or total market fund probably has some exposure to low vol, dividends and the others. Now for a little more fun.
Morgan Housel Finance types tend to focus on attributes like intelligence, math skills and computer programming. We’re going to discuss how to make sure your behavior is not getting in the way of your portfolio. So if the stock market were open once a year, that would actually be fine. None of it matters. Why is this?
At the same time, they also overwhelmingly recognize the value of financial advisors , not only for increasing their wealth beyond what they could have achieved on their own , but also for helping them feel more prepared and less stressed about their finances!
His philanthropy includes sitting on the board of directors of Paul Tudor Jones’ Robin Hood Foundation and Jim Simon’s Math for America. He is fond of noting: “Markets spend a lot of time doing nothing, then they reprice.” He explains what the trading experience was like on Black Monday, 1987.
S&P returns (including dividends) since 2019, graph by the excellent portfolio visualizer website. As one reader recently asked me in an email: The market seems to be in a huge bubble right now due to all sorts of hype around Artificial Intelligence. Now back to the stock market. Its just basic math.
The recent stock market activity has given us plenty of opportunities to experience extremes of emotion… but then again, you can pretty much choose any time period and make a similar statement. There’s no shame in admitting that factor – for a lot of us, math can be very tough. We Want Control… or Do We?
Markets T-bill yields are approaching 4%. barrons.com) Bond math looks a lot different from a year ago, let alone six months. morningstar.com) Just how bad is the drawdown in the 60/40 portfolio this year? morningstar.com) Don't be fooled but short term results, beating the market is really difficult.
First up was a webinar about model portfolios at ETF.com. Outsourcing the work related to actually being an advisor would not feel right to me and I enjoy what I get to do including portfolio construction. I think that when investors hear about model portfolios they sort of think in terms of set and forget.
Many risks important for our portfolios are new, hidden, or nuanced in some underappreciated way—and likely to be misunderstood and mispriced in the markets. Other risks can hide in plain sight. In short: we need informed creativity, not calculation. Please read the Alpha Architect disclosures at your convenience.
If you do the math, that yields a better long term result in nominal terms and also in risk adjusted terms. Getting that exact result is not going to be easy for too many people but the idea of structuring a portfolio to be less volatile while avoiding interest rate risk is something that someone who is so inclined can do.
I've been saying meaningful yield without too much volatility is what investors hope the bond portion of their portfolio will give. The simple 40 year trade for bonds of "number go up" is finished and as a matter of math, can't be repeated. Taking volatility out of a fixed income portfolio is fairly simple.
But in today’s market, with rapidly shifting macro conditions, rising rates, and ongoing uncertainty, which approach is winning? We dive into the numbers, examine the some of the portfolio stock selections, and offer guidance on what type of investor each strategy may suit best. View the model portfolios.
Jason Zweig wrote an article titled How Not to Invest in the Bond Market. This blog has pretty much evolved into 100 ways to build a portfolio without bonds. The article devoted a good amount of space to bond marketmath, focusing on the pain of owning the iShares 20+ Year Treasury ETF (TLT) and bond funds in general.
My back-to-work morning train WFH reads: • Ken Griffin’s Hand-Picked Math Prodigy Runs Market-Making Empire : Citadel Securities CEO Peng Zhao left for college at age 14, caught Griffin’s eye early in his career and built systems now mopping up market share.
If any of us had constructed this portfolio and implemented it for ourselves, it would have been a very acceptable result. The portfolio did just fine, it captured most of the upside and avoided the full brunt in 2022's large decline. One thing lacking from the "Endowment ETF Model Portfolio" is any hint of endowment-like results.
As I read the FT article, I had a thought about how to try to make the fund work as part of diversified portfolio, not the entire portfolio. The way Portfolios 1 and 2 are weighted, the math works for being a 60/40 portfolio and then from there we add portable alpha/capital efficiency/return stacking.
There was an article on LinkedIn (via Abnormal Returns) by Victor Haghani that dug into the math working against leveraged ETFs. In a 60/40 portfolio, a 30% weighting to SSO would in theory equal a 60% weight to equities, opening the door to some sort of of capital efficient portfolio even if that just meant sitting in cash.
It's been a while since this sort of thing was relevant for my day job so something could have changed, weeklies didn't exist for example, but if my math is correct then it was way over exposed which would account for last week's decline in the fund price. Please leave a comment if I did the work incorrectly.
She really has an incredible background in everything from capital markets to derivatives, to wealth management. You’ve been involved with capital markets for your entire career. It’s a town of about 4,000 people, so exposure to markets or investment banking or any of the careers in finance was not something that you really envisioned.
She is the president of the New York Stock Exchange, the world’s largest, with over 2,400 listed companies for a combined market cap of about $36 trillion. It could be — if they’re a foreign company, they will look at their home markets as well. They may have specific concerns about certain areas of the market.
My Two-for-Tuesday morning train WFH reads: • Stock Pickers Never Had a Chance Against Hard Math of the Market : In years like this one, when just a few big companies outperform, it’s hard to assemble a winning portfolio. Businessweek ) but see With cash earning 5%, why risk money on the stock market?
But today, data is widely available and it’s a key tool you can use to enhance your portfolio returns. Portfolio management was a lot less evidence-based than it is today. As it turns out, there are ways you can use data to your advantage, even if you’re not a math wizard. market volatility.
Bill Bernstein : I’ll give credit to a guy you may have heard of named Frank Armstrong, who was one of the early efficient market passive indexing advocates. I couldnt figure out where it came from; so I worked out the canonical math. I’m not gonna be a stock picker, or a market timer. Indexings is an admission.
Keep it to something broad like a total market fund or a market cap weighted large cap index. And then just a little math, the "guarantee" based on the 50/50 allocation would be 2.5% Portfolio 3 with 65% HEQT and 35% SPHB was down quite a bit less than the S&P 500 last year and the standard deviation is noticeably lower too.
Barron's had a fun article that looked at some ideas from William Bernstein titled The Trick To A Bullet Proof Portfolio? Based on the title, it would seem to be in the neighborhood of creating an all-weather portfolio which we've looked at in several different forms over the course of my full 19 years of blogging.
Here's a quote I saw attributed to Barry Ritholtz: “The Best Portfolio is probably the one which sacrifices a bit of performance, but helps you sleep at night.” Over the last five years, it missed out on the stock market rally until late 2020 when it went parabolic, then drifted lower for much 2021.
By Justin Carbonneau ( Twitter | LinkedIn | YouTube ) — Imagine a world where a single company has a market capitalization of $10 trillion. For reference, Apple, one of the world’s most valuable companies as today, has a market cap of $2.8 With a current market cap of $2.8 times its current value. trillion.
In my ongoing quest to redefine portfolio construction, I've mentioned labeling asset classes based on their attributes versus just their proper names like growth which could include more than just equities or inflation protected which could include more than just TIPS and so on. We talk frequently about portfolios being relatively simple.
That means the real answer to what’s the earliest you can retire depends far more on your investment portfolio , retirement lifestyle, and medical coverage strategy than on a number printed on your birth certificate. Outliving your savings Here’s the math: the earlier you retire, the longer your savings have to last. Retiring at 55?
She has a really fascinating background, very eclectic, a combination of math and law. You, you get a, a BS in Mathematics and a JD from Boston University Math and Law. It is something, math has always come easy to me since a child. I didn’t get an advanced degree in math. Not the usual combination. What happened?
Simple math, it looks like the carry index has compounded at less than 3%. If you use the fund in the manner that I think they intend, a blow up for the stocks and managed futures ETF would be a setback for a portfolio but not a catastrophe. The red line for T-bills is price only. No question, the odds are low but it's not impossible.
Her job is portfolio and product solutions and that means she could go anywhere in the world and do anything. One, one is true and I’ve always said is that I wanted people to stop, ask if I could doing math. And no one asked me if I can do math anymore with a degree from Booth, particularly in econometrics and statistics.
You might have a generic 60/40 portfolio that you expected to cover the rest of your income needs but that possibly needs updating after recent market activity. 3] So, it’s easy math: the less you work, the less you’ll earn. Regardless, Social Security can provide a helping hand with your income.
We’d have to tax ~85% of imports to cover that, but that would also reduce imports so it’s unrealistic and the basic math doesn’t come close to working. They are anti-free market and anti-Capitalist! Especially when US firms realize they have more pricing power due to the government’s manipulation of the market.
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