Insights

Yet More Investing Lessons from 2017

Larry Swedroe concludes his list with 2017’s lessons eight through 10. Every year, the markets offer lessons on the prudent investment strategy. So far, we’ve covered what they taught us last year in lessons one through three and four through seven. Today, we’ll finish off 2017’s list with lessons eight through 10. Lesson 8: Hedge funds are not…

Investing Lessons from 2017

Larry Swedroe unpacks lessons one through three from 2017. Every year, the markets provide us with lessons on the prudent investment strategy. Many times, markets offer investors remedial courses, covering lessons it taught in previous years. That’s why one of my favorite sayings is that there’s nothing new in investing—only investment history you don’t yet…

More Investing Lessons from 2017

Larry Swedroe resumes his list with 2017’s lessons four through seven. Earlier this week, we began discussing what the markets taught us in 2017 about prudent investment strategies. We tackled lessons one through three then, so today we’ll resume with lessons four through seven. Lesson 4: Don’t make the mistake of recency. Last year’s winners are…

To Be a Retirement Savings Pro

Can we better save for retirement by acting as if that “someday” is today? While on vacation recently in the Abaco Islands, on the outer rim of the Bahamas, I found myself on an important mission: taking the golf cart to the local market to restock our dwindling supply of the necessary ingredients for piña…

Don’t Write Off Value

Larry Swedroe takes a look at the data and builds his case for why investors should continue to expect a value premium going forward. Recency bias—the tendency to give too much weight to recent experience and ignore long-term historical evidence—underlies many of the mistakes commonly made by investors. It’s particularly dangerous because it causes investors…

Mutual Fund Ratings and “Category Kings”

Larry Swedroe explores how awarding star ratings and crowning “category kings” can influence investor (and manager) decisions. To date, an overwhelming body of academic research (including on active share as a predictor) has demonstrated that a mutual fund’s past performance not only fails to guarantee its future performance (as the required SEC disclaimer states), but…

Does Past Performance Matter?

Larry Swedroe tackles new evidence showing that hiring recently outperforming managers and firing recently underperforming ones remains a losing strategy. Despite most investors’ belief that past performance matters, a large body of academic research has found little-to-no evidence that more managers than would be randomly expected persistently outperform the market on a risk-adjusted basis. While…

Discipline Is Critical to Successful Investing

Will disciplined value investing be rewarded long term? Larry Swedroe on the evidence, and current stock valuations. Having a well-thought-out investment plan is the necessary condition for successful investing. However, it’s not sufficient. The sufficient condition is having the discipline to stay the course during the virtually inevitable periods when a strategy underperforms. That, of…

Iconic Report Supports Index Investing

Larry Swedroe reviews results from the new mid-year 2017 SPIVA scorecard. Since 2002, S&P Dow Jones Indices has published its S&P Indices Versus Active (SPIVA) scorecards, which compare the performance of actively managed equity mutual funds to their appropriate index benchmarks. The 2017 midyear scorecard includes 15 years of data. Equity Following are some of the highlights…

Vanguard Debunks Dividend Myth

A new Vanguard study found that a total-return approach is superior to one focused on dividend strategies. Larry Swedroe unpacks the research and explains the downside of a preference for dividends. Dividend strategies have drawn increasing interest from investors around the world as central banks have pursued both quantitative and qualitative easy monetary policies, keeping…

More Hazards of Individual Stocks

If diversification is a free lunch, use the full buffet. In a recent article that highlighted the perils of owning individual stocks, I offered the historical evidence demonstrating how only a small percentage of stocks have accounted for all the gains provided by the market—with the vast majority earning a big, fat zero in aggregate cumulative…

Active Even Fails Institutions

Larry Swedroe unpacks new SPIVA data on institutional managed account performance. Vanguard founder John Bogle’s “cost matters hypothesis” explains why, after subtracting fees, returns from active management tend to be smaller than returns from passive management, as the latter costs less. However, retail investors tend to pay higher advisory and management fees than institutional investors….

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