Do you swing with the EAFE or do you sit on the fence between Europe and the Pacific Rim? I am a fence-sitter because splitting the EAFE has delivered better performance. The MSCI EAFE acronym stands for Morgan Stanley Capital International Europe, Australasia, and Far East. It is a benchmark of large-cap developed market stocks [...]
The Efficient Fund Hypothesis
April 10, 2012 By
The Efficient Fund Hypothesis (EFH) is about successful long-term mutual fund investing. Specifically, it spells out the reasons why a low-cost index fund portfolio provides the highest probability of reaching your financial goals. It’s not about picking winning funds and it’s not about market timing. It’s about success. EFH is a wonderful idea that few [...]
Financial Advisors Encourage Bad Behavior
March 30, 2012 By
Seeking financial advice is bad for your wealth. New research by top academics concludes that the advisor industry mostly reinforces bad behavior, rather than fixing it, even when clients start with a well-diversified, low-fee portfolio. High fees and commissions incentivize advisors to promote performance chasing and costly actively-managed products. The Market for Financial Advice: An [...]
This Decade’s Biggest Investment Challenge
February 21, 2012 By
Every decade has its big investment challenge. We saw raging inflation in the 1970s, a market crash in the 1980s, irrationally high stock valuations in the 1990s, and two difficult bear markets in the 2000s. What is this decade’s investment challenge? You might be thinking historically-low interest rates. They are a concern, but not the [...]
The Fed’s New Tax on Retirees
January 30, 2012 By
Last week, the Federal Reserve rolled out their inflation forecast and interest rate intentions through 2014, and it’s not good news for retirees or anyone else who relies on interest income. The yield on money market funds, CDs, and other fixed income investments will likely remain well below the inflation rate for the foreseeable future. [...]
