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Michael Lewis authored “Moneyball” back in 2003, and it seems like it immediately captured the attention of baseball fans and insiders everywhere. Since that time, its concepts have been applied to numerous areas including basketball, which is in the midst of a seismic shift in how basketball is evaluated and what skills and actions contribute th....
A reader asked if I could expand on my post from two weeks back on expected stock returns. Specifically, he asked if I could focus on how tilts toward certain types of stocks could be expected to provide (or subtract) additional expected return beyond what we expect the overall market to do.
In that post, I noted that a reasonable expectation for the long-term real return of U.S. stocks was about 4 percent. ....
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 ....
The past year or so has provided a vibrant debate about the long-term returns stock market investors should expect. Part of this discussion has been driven by the long-term return assumptions used by public pension plans in the U.S. It’s also been driven by the great stock market performance of the past few years and how that should impact long-term expected returns. Further, some investors seem to be worri.... Late in 2012, I reviewed the mid-year 2012 Standard & Poor’s Indices Versus Active scorecard. S&P has since updated the scorecard through year-end 2012, and I wanted to quickly hit on some of its findings. I’ll focus on the five-year results since those are long enough to actually begin drawing mea....
As the number of exchange-traded funds (ETFs) has multiplied, the number of sector ETFs has exploded. There are now ETFs that cover every sector of the U.S. stock market imaginable (health care, telecommunications, consumer discretionary, etc.) and even international and emerging markets sector ETFs. Lost in all this is the general finding that sectors really aren’t that important, particularly over longer periods of time.
The long-term returns of most....
I’ve gotten a few questions about the performance analysis noted in a recent New York Times piece about Dimensional Fund Advisors and Vanguard. Here’s the quote:
“What’s more, investors in Vanguard stock mutual funds have had higher actual returns than investors in Dimensional funds. On an asset-weighted basis....
Historically, when compared with comparable maturity Treasury bonds, municipal bond yields have been lower due to their federal tax exemption. Over the very long term, this yield “discount” has averaged about 25-30 percent. An interesting change, though, has occurred from about the start of the financial crisis to today.
Municipal yields have generally been about the same or higher than Treasury yields even before adjusting for tax exemption. The chart....
The profitability effect has been getting a good bit of attention lately, which all seems to have started with University of Rochester professor Robert Novy-Marx’s paper titled “The Other Side of Value.” Novy-Marx found that firms with high profitability have historically outperformed firms with low profitability after accounting fo....
With interest rates on intermediate- and long-term bonds ticking up a good bit over the beginning of the year, many investors are refocusing on the potential risk within bond portfolios. (As one data point iShares 20+ Treasury ETF is down about 1.8 percent year-to-date.) For many bond portfolios, that risk can come from either interest rate risk or credit risk. Here I’ll focus on interest rate risk.
The potential interest rate risk in a bond or bond fund portfolio is largely determ....
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 | Jared Kizer
Director of
Investment Strategy
BAM Advisor Services
(see bio)
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Click on the icon below to get in touch and find an independent BAM ALLIANCE advisor.
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