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4/30/2013 10:40 AM
Many pundits (and a good number of individual investors) have been predicting high inflation as a result of the Federal Reserve’s monetary policy. Over the four years ending 2012, inflation has averaged just 2.2 percent per year, and currently the market expects inflation over the next five years to be just 2.1 percent per year. Clearly, realized inflation has been low and the market expects inflation to be low in the future, which can hardly be interpreted as signs that high inflation is a foregone conclusion. This .... 2/20/2013 10:13 AM
Numerous studies have documented the counterproductive tendencies of individual investors. These include paying excessive mutual fund fees, holding tax-inefficient portfolios, having improper asset allocations, chasing returns and poorly diversifying portfolios. My colleague Carl Richards has aptly termed this collection of behaviors "The Behavior Gap," since they can greatly reduce the returns that investors could have earned. I firmly believe corre.... 1/15/2013 4:09 PM
This post is obviously a bit anecdotal, but I’ve been thinking about three prominent predictions from the past few years and analyzing those predictions relative to what the market was forecasting and what academic research had to say. The three predictions were:
- Interest rates would increase so, you should stick to short-term bonds (if investing in bonds at all).
- The municipal market would experience significant trouble in 2011.
- ....
3/7/2012 10:02 AM
It’s hard to think of an area of the world’s capital markets that is more misunderstood and confusing than the fixed income markets. I wanted to clear up some of the fallacies I frequently hear when I talk to investors about fixed income.
“I expect rates to go up, so I’m just going to keep everything in short-term fixed income.”
If I’ve heard this once over the past couple of years, I’ve heard it a thousand ti.... 2/22/2012 10:05 AM
I’m taking a break this week from my posts on return premiums to focus on market-based forecasts (a topic that came up in a recent presentation I did for a group out in Oregon). Humans can’t help themselves from forecasting, and many unfortunately act on their own market forecasts or those of the “experts,” which tend to do more harm than good. Yet we can look to the markets themselves for forecasts of the future — forecasts that I would argue are generally more useful than .... 1/10/2012 5:41 PM
It’s depressing how little investment knowledge most so-called financial professionals have. (I have theories why this is the case, but those are for another post.) One recent, real-world example of a severe lack of financial knowledge is the ongoing dispute about how state and local pension liabilities should be valued.
In one camp, we have our so-called financial professionals arguing the current methodology is appropriate. This methodology is best d.... 4/1/2011 10:41 AM
At an annual inflation rate of 3 percent, a retiree who is currently spending $100,000 per year will find that spending has grown to approximately $134,000 within a 10-year period. Ideally, most investors want the growth in the value of their portfolio to track inflation as closely as possible and hopefully exceed it substantially. Inflation protection is also important because traditional asset classes such as stocks and nominal bonds have tended to do poorly when inflation is unexpectedly high.
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 | Jared Kizer
Director of
Investment Strategy
BAM Advisor Services
(see bio)
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