Theory
What are Market Valuations? (Part 2)
Taking distributions from an investment portfolio amplifies the impacts of portfolio volatility, making retirement income planning particularly tricky as distributions tend to be the primary income source for retirees. We can use Monte Carlo simulations to show the increase of money-weighted investment returns in retirement, which has important implications about the choice for a fixed portfolio return assumption.
Read MoreWhat are Market Valuations? (Part 1)
Taking distributions from an investment portfolio amplifies the impacts of portfolio volatility, making retirement income planning particularly tricky as distributions tend to be the primary income source for retirees. We can use Monte Carlo simulations to show the increase of money-weighted investment returns in retirement, which has important implications about the choice for a fixed portfolio return assumption.
Read MoreDoes Dollar Cost Averaging Make Sense?
The appeal of market timing is obvious. Who wouldn’t want to get in and out of the market at the best time every time? We’ve talked a lot about market timing in the past – timing risk premiums, trying to time the markets on a daily basis, and the importance of staying disciplined even when it seems obvious the markets are going to go down.
Read MoreHow Good Is the VIX Index at Predicting Market Volatility?
Here is a summary of the VIX Index.
Read MoreThe Problems with Indexing
Index funds dominate the passive management landscape (though they are not the entirety). But just because there’s no way to guess which active managers will do well in the future doesn’t mean index funds don’t have problems themselves.
Read More5 Companies Comprise One-Third of S&P 500 Returns – Is This the Death of Diversification?
Everyone is always eager to declare the death of diversification. They say it fails in a crisis, that correlations are going up throughout the markets, or that building a diversified portfolio is just too dang time-consuming and expensive (seriously). Now people are ringing the same death knell because so much of the market’s returns are…
Read MoreWhat is Risk?
Risk is one of those complicated concepts that you can’t really pin down to one definition, but it’s the single most important factor for investors.
Read MoreThe Dangers of Putting Our Faith in Statistics
Statistics are great and all, but just because the numbers say something will happen doesn’t make it the gospel truth.
Read MoreWhich Makes More Sense for Retirees: A Total-Return or Income Portfolio?
Total-return investing focuses on building diversified portfolios from stocks and bonds to seek greater long-term investment growth.
Read MoreHow Index Investing Became What It Is Today
Index investing came from humble beginnings to become one of the most widely used strategies in use today.
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