Treasuries Still Make Sense (Part 2 of 2)

Yesterday, in Part 1 of this blog, we began to answer this reader question: “I’ve been questioning whether 40 to 50 percent of my portfolio should be kept in US Treasury funds as a way to reduce portfolio volatility. Are US Treasuries still an appropriate way to reduce volatility given our country’s dire financial condition?” [...]

Treasuries Still Make Sense (Part 1 of 2)

A reader recently emailed a question about the viability of owning Treasury bonds as a diversifier for equity risk given the high federal deficit. “I’ve been questioning whether 40 to 50 percent of my portfolio should be kept in US Treasury funds as a way to reduce portfolio volatility. Are US Treasuries still an appropriate [...]

Why Active Bond Funds Bomb

It’s hard for equity managers to beat their benchmarks, but it’s twice as hard for bond managers. A strong headwind pushes back performance. On average, actively managed mutual funds underperform index funds because higher fees drag down performance. Only 1 out of 3 actively-managed stocks funds beat its benchmark over a 5-year period. Less known [...]

The Odds Favor Index Investors

Index investors have the highest probabilities of meeting their investment objectives. The returns of index funds are better than the average active funds in every investment category, and portfolios of index funds romp portfolios of actively managed mutual funds. The job of creating an all-index fund portfolio is easy because there are funds covering every [...]

Seeking Alpha and Discovering the Truth

Larry Swedroe’s newest book, The Quest for Alpha, is only 190 pages but it could have easily been 500 pages. This compact book is chock-full of academic research that tightly summarizes the active versus passive debate, and instructs you on how to seek out a successful portfolio. Those of you familiar with Larry Swedroe’s work will [...]