Groundbreaking investment research from 1992—supported by other studies since then—indicates that value stocks and small stocks outperform the stock market as a whole. Recently, professors Eugene F. Fama of the University of Chicago and Kenneth R. French of Dartmouth—authors of the 1992 study—have identified another important component of stock returns: the higher returns of small and value stocks are due […]
Month: August 2007
It is the ‘unknown unknowns’ that will affect your portfolio
Among the many peculiar word constructions former Secretary of Defense Donald Rumsfeld is remembered for, there is one that applies to all forecasts of the future: the “unknown unknowns.” In his words, they are “the ones we don’t know we don’t know.” That phrase, incidentally, was already commonly used in the Defense Department and elsewhere in its shortened version, “unk-unk.” It […]
