He was described as “one of the greatest investors of our time” by Fortune magazine in 2006. His record of beating the Standard & Poor’s 500 Index for 15 years from 1991 through 2005 is unmatched. And yet his mutual fund—Legg Mason Value Trust—suffered poor returns over subsequent years, landing him in the bottom of the pack in 2010 out of 1,187 […]
As the world’s stock markets took a vicious tumble in late summer and early fall, one of the market’s most prescient observers issued a warning: don’t sell now. Burton Malkiel, economics professor at Princeton and author of “A Random Walk Down Wall Street,” wrote an editorial in the Wall Street Journal urging investors to ignore the market’s recent trends and to focus on […]
Any investor should be willing to admit 2011 was a pretty crazy year for the markets. They were churned through the year by a weather and nuclear disaster in Japan, a deadlock over finances in Congress that led to a downgrade of U.S. debt, and a major crisis in Europe that threatened to blow apart the European Union and end […]
During the past quarter, the world-wide equity markets took a steep fall. In contrast, our bond positions did their job and held up the “fort.” The chart below shows the 3-month, 5-year, and 10-year performance of many DFA funds (representing different asset classes) compared to the S&P 500 Index: Market Returns for the period ending September 30, 2011 DFA Fund […]
As a fiduciary, we are required to utilize a due diligence process in selecting service providers, including the selection of custodians. We are also required to periodically re-evaluate these relationships. Sparrow Wealth Management clients have utilized Charles Schwab as your custodian for about ten years now. During the past year, we have evaluated a number of custodians, and we have […]
Two of America’s eminent investment researchers were recently asked whether the hyperactive markets of the last few years indicate that the concept of buy-and-hold investing is outdated. Their answer? Absolutely not, reports the Journal of Indexes in its May-June issue. “Obviously, it would be much better if we knew when the market was going to go down 40 percent, and we could […]
Investors have a lot of choice when deciding how to handle market fluctuations. Many opt for “tactical asset allocation”—in other words, they move out of stocks, for example, when they think returns will be bad, and move back in when they expect better returns. Many others choose a better strategy—they spread their money among a bunch of different asset classes […]
During the past quarter, U.S. stocks and real estate performed exceptionally well, followed by moderate returns internationally. Short and intermediate bonds remained flat. Isn’t it interesting that U.S. and international stocks performed so well, despite the havoc caused by the earthquake and tsunami in Japan? The following chart shows the 1-year, 5-year, and 10-year performance of many DFA funds (representing […]
What does it take to feel wealthy? About $7.5 million, according to a group of people who should know. That finding came in a recent survey of 1,000 millionaire households by Fidelity, the second-largest mutual fund company. The average wealth of the households surveyed was $3.5 million, and surprisingly some 42 percent of those respondents said they do not feel […]
A long-held axiom among professional investors says that diversifying a portfolio by adding international stocks helps to reduce risk and enhance returns. But as the world’s developed economies in Asia and Europe have become more tightly entwined, critics have argued that global investing’s allure has declined because stock market patterns in major markets have converged. Rex Sinquefield, who helped develop […]
