During the past quarter, U.S. and international stocks were back in negative territory, with international and emerging markets down the most. This quarter had a negative impact on our one-year returns, leaving only the S&P 500 and real estate in positive territory for the year. The following chart shows the 1-year, 5-year, and 10-year performance of many DFA funds (representing […]
Year: 2012
Public pension fund travails show that risk and fees matter
Some pension funds for state and local employees have sought higher risk investments in order to boost returns and make up for funding shortfalls. Others have stuck to a traditional diversified stock and bond mix. Guess who has done better? (Here’s a hint: it wasn’t the pension plans that took high risks). Falling tax revenues and rising retirement costs have […]
Gold disappoints over the long-term
Gold has been on a tear since 2000, but its long-term record of growth for individual investors is pretty poor. From the end of 1999 through 2011, gold beat most major equity asset classes, gaining an average of 12.3 percent per year, says Dimensional Fund Advisors, a large California-based investment firm. But the record since 1975, when individual U.S. investors […]
Scary predictions by perma-bears end up being hot air
Volatilestock markets generate a peculiar type of celebrity known as the “perma-bear.” This is the highly negative forecaster who gets credited with calling a bear market before it starts. What you usually don’t get told is that he or she has been calling for a bear market for years without success. When their big chance finally comes, perma-bears milk it […]
The Death of Equities, Revisited
A recent article appearing in the Financial Times caught our eye—or perhaps we should say ear. At first glance it was unremarkable—just one among dozens of recent think pieces suggesting that investors were losing interest in stocks as markets around the world continued to stagnate. But the tone of the article sounded remarkably familiar. We dug out our copy of the “Death […]
Is this the last generation to use 401ks?
The 401k retirement savings account offered by employers has become ubiquitous over the last 30 years. But some retirement planning experts predict that 401ks will be overtaken by a new form of retirement savings in the future. The reason is simple: the accounts don’t help lower income employees who lack the ability to save for retirement, and they put each […]
Investors are sitting on wads of cash just at the wrong time
The latest consumer inflation rate was clocked at 2.3 percent in April. Sounds pretty benign, doesn’t it? Well it isn’t if you are keeping large sums of money in the bank at today’s interest rates. In fact, “safe” money in the bank is being subject to erosion just as surely as any stock market decline might affect your investment portfolio. […]
Stocks are scary to own, but they are your best inflation fighters
Individual investors have fled the stock market in droves ever since the great bear market of 2008. The latest statistics show investors selling more stock mutual funds than they buy and putting much of the proceeds into bond funds. Meanwhile market volatility has increased again as another round of scary financial headlines from Europe have pushed prices down sharply in […]
2012 NAPFA National Conference Highlights
I am just flying home from Chicago, where I had the opportunity to spend the past week with my fee-only advisor colleagues at the 2012 NAPFA National Conference. I had a great time and learned a lot too. Here are some of the highlights: William Strauss, senior economist with the Federal Reserve Bank of Chicago, said that while “growth of […]
A race against hedge funds puts Warren Buffett ahead
Billionaire investor Warren Buffett is running ahead on a bet with two hedge fund managers that the Standard & Poor’s 500 Index would beat an index of hedge funds. Buffett, whose flagship Berkshire Hathaway was added to the S&P index in 2010, contends that the active money management and high fees associated with hedge funds cannot beat the market. His […]
