Keynes is Dead – Let Him Rest

British economist John Maynard Keynes died and was put in his grave in 1946. If the U.S. continues to follow his economic policies, we may soon be there with him. The basis of Keynesian policy is that a government should spend more money during an economic downturn to help smooth out economic cycles, and then [...]

Active Funds Still Trailing

Active managers continue to struggle against passively managed indexes. Yesterday, S&P Indices released the Mid-Year 2011 results for its S&P Indices Versus Active Fund Scorecard (SPIVA). This report quantifies active manager shortfalls. The SPIVA Scorecard provides performance comparisons corrected for survivorship bias, equal- and asset-weighted peer averages and measures of style consistency for actively managed [...]

Winning with Small Value Stocks

Small company stocks with value characteristics help you achieve your investment objectives by increasing portfolio returns and lowering risk.  So says many noted academics, including Eugene Fama and Ken French, as well as Zugang Liu, Ph.D., Assistant Professor at Penn State University, who has a new study titled Time, Risk and Investment Styles. Fama and [...]

Index Fund Pollution

Index fund evolution has turned into index fund pollution and that’s not good for investors. The intense marketing of expensive index-like products has smeared the good name of traditional low-cost index funds that John Bogle and Vanguard created in 1975. This is exactly what the proprietors of these products wanted. Unlike traditional index funds that [...]

U.S. is Where the Growth Is

The next surprise stock market could be in the U.S. American companies are heavy in growth industries and light in basic material, compared to the rest of the world. This could play right into the hands of U.S. investors who tend to maintain a bias to U.S. stocks. The table below compares the MSCI U.S. [...]