Profitability: Entering a New Dimension?
Investors should always be skeptical about new strategies that promise abnormal returns. As I explained in last week’s post, some of those strategies are dubious to begin with, and even legitimate one [...]
Why Market-Beating Strategies Don’t Last
This past spring I asked why everyone isn’t beating the market when countless strategies have been shown to deliver outsized returns—at least in theory. I put it down to self-destructive behaviour, bu [...]
Are We In a Secular Bear Market?
If you’ve spent any time at a cottage this summer, away from the bright city lights, you’ve probably enjoyed some beautiful views of the Milky Way. Astronomers believe that our galaxy is a barred spir [...]
How Will Rising Rates Affect Bonds?
Since the 2008–09 financial crisis caused bond yields to plunge to new lows, market forecasters have been predicting a rise in interest rates. And when bond investors think rates will increase, they t [...]
What Are Normal Stock Market Returns?
How often in the last few years have investors said they’re staying out of the equity markets because of the volatility we’ve experienced recently? Many of them are waiting on the sidelines “until thi [...]
Why I Have No Faith in Market Timing
Earlier this week I described the market timing strategy outlined in Mebane Faber’s book The Ivy Portfolio. I chose not to editorialize too much, preferring instead to simply explain the strategy to r [...]
Risk and Uncertainty in Stock Markets
When we consider the risk in investing, we’re often thinking about volatility: that is, the sometimes dramatic movements in equity prices. But as Alan Fustey explains in his book, Risk, Financial Mark [...]
The Models Are Broken—But Indexing Still Works
If you’ve researched the theoretical foundations of index investing, you’ve no doubt come across Modern Portfolio Theory and the Efficient Markets Hypothesis. And if you read the commentaries of activ [...]
Why Daily Market Commentary Is a Joke
I haven’t watched Saturday Night Live for a long time, but I’ve been thinking about a classic line from the show’s Weekend Update sketch. Back in 1988, during the Winter Olympics, Dennis Miller opened [...]
Is the Market Overvalued? Depends Who You Ask
Critics of index investing often argue that the strategy is not sensitive to valuation. They feel that a simple strategy of buy, hold and rebalance is folly: there are times when the market is cheap o [...]
