A College Level Textbook by Tyler Cowen and Alex Tabarrok All too often, we hear horror stories of what students are being taught in ...
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http://www.ifa.com/articles/book_review_-_modern_principles_macroeconomics.aspx
A reasonable question to ask is just how good of a stock-picker do you need to be to beat the index after covering your costs? See the chart below:...
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http://www.ifa.com/articles/a-stock-pickers-market-jay-franklin.aspx
"We have met the enemy and he is us" – Pogo "The investor's chief problem—and even his worst enemy—is likely to be himself." – Benjamin ...
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http://www.ifa.com/articles/investors_continue_their_worst_enemy.aspx
One of the reasons we at Index Funds Advisors advise using funds from Dimensional Fund Advisors is that Dimensional never stops seeking ways to add ...
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http://www.ifa.com/articles/recent_enhancements_small_investment_strategies.aspx
"Investing is an unusual profession: perhaps the only one where amateurs have a good shot at beating the pros." ...
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http://www.ifa.com/articles/what_learn_from_retiring_market_strategist.aspx
While scanning my Google Alerts on investment-related articles, Antione Gara’s Goldman Offers Hedge Funds to the 99% grabbed my attention. The article describes Goldman Sachs ...
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http://www.ifa.com/articles/memo_from_goldman_keep_your_hedge_funds.aspx
Americans who are near or in retirement are faced with the vexing question of when to take Social Security benefits....
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http://www.ifa.com/articles/when_right_time_take_social_security_benefits.aspx
At Index Funds Advisors, we are sometimes asked if there is any company whose stock we would recommend buying. Our tongue-in-cheek answer is shown... ...
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http://www.ifa.com/articles/capitalism_stock_certificate.aspx
As we have pointed out on many occasions, both stock picking and hiring an active manager to pick stocks on your behalf are mug’s games. ...
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http://www.ifa.com/articles/never-ending-pursuit-alpha.aspx
In Step 6 of IFA’s 12-Step Recovery Program for Active Investors, we analyze the problem of style drift, the tendency of active managers to buy ...
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http://www.ifa.com/articles/style_drift_steroids.aspx
As an admitted math geek, I never tire of learning tricks that simplify otherwise complex calculations. My favorite trick is known as "the rule of 72"...
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http://www.ifa.com/articles/rule_mathematical_thing_beauty.aspx
For the last fourteen years, IFA has been educating investors on the sensible way to invest, based on decades of academic research. Amid all the ...
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http://www.ifa.com/articles/retirement_gamble.aspx
- Wednesday, April 17, 2013
In November of 2011, 60 Minutes did an eye-opening expose’ of members of Congress who profited from stock trading based on information. The ...
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http://www.ifa.com/articles/taking_stock_stock.aspx
As someone who follows the world of passive investing quite closely, one publication that I eagerly await every year is The Case for ...
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http://www.ifa.com/articles/vanguard_makes_case_indexing.aspx
Nobel Laureate William Sharpe is one of the academic linchpins of IFA’s investment philosophy....
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http://www.ifa.com/articles/another_arithmetic_lesson_from_william_sharpe.aspx
The first quarter of 2013 was a quarter in which risk was rewarded. Once again, the market climbed a wall of worry centered on government ...
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http://www.ifa.com/articles/2013_quarter_review.aspx
- Wednesday, April 03, 2013
investors who are paralyzed with confusion are hardly to blame, especially since most of these opinions are intelligently and articulately presented. ...
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http://www.ifa.com/articles/what_mother.aspx
Throughout IFA’s Website, you will find references to the three-factor model formulated by Professors Eugene Fama and Ken French, ...
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http://www.ifa.com/articles/momentum_fourth_factor.aspx
- Wednesday, March 27, 2013
Despite the dismal results delivered to their investors since inception1, hedge funds have continued to grow, reaching a record $2.25 trillion ......
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http://www.ifa.com/articles/hedge_funds_deeper_look_into_their_returns.aspx
- Wednesday, March 20, 2013
A story that we have been following for some time now is the SEC/FBI investigation of SAC Capital Advisors for insider trading. On March 15th, ...
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http://www.ifa.com/articles/capital_s_record_not_boast_about.aspx
In the first part of this series, we gave an overview of 529 plans and the due diligence that investors should perform before choosing one ...
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http://www.ifa.com/articles/saving_college_addressing_significant_financial_challenge_second_three_part_series.aspx
At Index Funds Advisors, Inc., we have long counseled investors not to pay heed to market predictions from the talking heads of high finance....
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http://www.ifa.com/articles/dow_20000_not_quite_yet.aspx
To borrow from a Vanguard study1, "active share" is defined as the percentage of a portfolio that differs from a benchmark index....
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http://www.ifa.com/articles/what_your_fund_active_share_should_you_care.aspx
- Monday, February 11, 2013
Quite frequently, an IFA advisor or I will speak to a client who thinks he has lost money because of what he sees on an ...
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http://www.ifa.com/articles/unrealized_capital_gains_investment_gains_important_distinction.aspx
- Tuesday, February 05, 2013
From the title of this article, you may have thought I was referring to someone who took a short position in Berkshire Hathaway. While I ...
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http://www.ifa.com/articles/betting_against_buffett_not_good.aspx
- Wednesday, January 23, 2013
While hedge funds as a whole have failed to deliver their investors a higher return than T-Bills1, there are a few that have provided above-market ...
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http://www.ifa.com/articles/what_some_people_will_beat_market.aspx
Anybody who watches CNBC during market hours gets treated to a litany of economic predictions and their expected impact on market prices....
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http://www.ifa.com/articles/economic_frcstng_market-timing_stay_clear.aspx
At Index Funds Advisors, we often counsel investors to avoid a “prediction addiction” and to especially avoid listening to......
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http://www.ifa.com/articles/2012_another_dismal_year_active_managers_market_predictors.aspx
- Wednesday, January 02, 2013
Markets climbed not just a wall of worry, but a "fiscal cliff" that turned out to be much ado about nothing, at least from the market's perspective....
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http://www.ifa.com/articles/2012_year_review.aspx
- Friday, December 21, 2012
A few weeks ago, I wrote about the continuing proliferation of Ponzi Schemes in the post-Madoff world....
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http://www.ifa.com/articles/website_help_stop_investment_scams.aspx
- Tuesday, December 11, 2012
It has been almost exactly four years since Bernie Madoff was revealed as the operator of the largest Ponzi scheme in history (estimated at $64.8 ...
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http://www.ifa.com/articles/ponzi_schemes_after_madoff_story_continues.aspx
- Monday, December 10, 2012
A recent whitepaper from Vanguard analyzed the impact of sixteen different variables on subsequent equity returns....
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http://www.ifa.com/articles/predicting_stock_market_returns.aspx
- Friday, November 30, 2012
With all the chatter in the financial media about the impending fiscal cliff, investors cannot be blamed for their confusion. Some investors have expressed a ...
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http://www.ifa.com/articles/rates_stock_returns.aspx
- Thursday, November 29, 2012
While driving to work today, I was racking my brain for a good topic to write about when suddenly, a black Ferrari convertible zoomed past ...
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http://www.ifa.com/articles/what_license_plate_reveals.aspx
- Wednesday, November 07, 2012
Warren Buffett, Market Efficiency and the Disappearance of Alpha...
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http://www.ifa.com/articles/warren_buffett_market_efficiency_disappearance_alpha.aspx
- Thursday, November 01, 2012
Anyone who is concerned with retirement would benefit from reading this book. Even the most math phobic among us should not be intimidated by the title....
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http://www.ifa.com/articles/most_important_equations_your_retirement_-_book_moshe_milevsky.aspx
At Index Funds Advisors, Inc. we have consistently warned investors away from the complex financial products put out by the large Wall Street firms....
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http://www.ifa.com/articles/mortgage_reit_leveraged_taking_risk_dizzying_heights.aspx
- Wednesday, October 24, 2012
Professors Brad Barber and Terrance Odean published a survey of studies showing the deleterious impact of bad behavior on investors' wealth....
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http://www.ifa.com/articles/impact_investor_behavior.aspx
- Tuesday, October 23, 2012
As a registered investment advisor, Index Funds Advisors, Inc. is constantly solicited by mutual fund companies and ETF (exchange-traded fund) providers hoping to convince us ...
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http://www.ifa.com/articles/when_minuses_not_make_plus.aspx
At Index Funds Advisors, Inc, we often talk about the Efficient Markets Hypothesis which states that current prices incorporate all publicly available information....
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http://www.ifa.com/articles/google_earnings_debacle_piranhas_attack.aspx
- Wednesday, October 17, 2012
Introduction Recently, many investors have succumbed to one of the siren songs of active investing, sector-picking. They believe that they can predict which industrial sectors ...
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http://www.ifa.com/articles/sector_rotation_sound_investment_approach_exercise_futility.aspx
Anyone who is contemplating investing in a hedge fund would do well to read the SEC's Investor Bulletin: Hedge Funds....
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http://www.ifa.com/articles/hedge_fund_warnings_from.aspx
Once again, the S&P Indices versus Active Funds (SPIVA®) Scorecard shows the dismal story for active management getting worse and worse. For domestic equity funds ...
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http://www.ifa.com/articles/beating_dead_horse_-_still_need_charts.aspx
- Tuesday, September 11, 2012
A few weeks ago, I wrote about the origin of stock trading in Amsterdam, so it is only appropriate that I follow up with a ...
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http://www.ifa.com/articles/confusion_confusions_adaptation_classic_masterpiece_joseph_penso_vega_17th_century_amsterdam_stock_exchange.aspx
- Tuesday, September 11, 2012
For anyone who works in the investment advisory business, particularly on the passive side, John (Jack) Bogle is a name held in the highest esteem. ...
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http://www.ifa.com/articles/problem_with_jack_bogle_think.aspx
In his magnificent work, The Birth of Plenty - How the Prosperity of the Modern World Was Created, William Bernstein outlines the four necessary conditions...
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http://www.ifa.com/articles/amsterdam_exchange.aspx
Index Funds Advisors, Inc. has repeatedly called attention to the scandalous waste of money on active management by state retirement systems....
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http://www.ifa.com/articles/pension-gate_continues_maryland_been_called.aspx
- Thursday, August 02, 2012
Continuing with our series of blogs on books in the financial humor genre, we will take a quick look at Caught Short—A Saga of Wailing ...
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http://www.ifa.com/articles/caught_short_saga_wailing_wall_street.aspx
Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party ...
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http://www.ifa.com/articles/hard_look_wall_street.aspx
This is one of those weeks where we have so many juicy stories that I truly don’t know where to begin. How about another Madoff ...
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http://www.ifa.com/articles/busy_week_world_high_finance.aspx
Recently, when I was browsing the Morningstar Website, I stumbled upon a video titled “What’s Driving Investors Away From Actively Managed Funds?” In the interview ...
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http://www.ifa.com/articles/actively_managed_funds_continue_lose_market_share.aspx
In this concluding article in the series exploring different ways investors might attempt to increase the income generated by their portfolios, we look at high-yield ...
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http://www.ifa.com/articles/reaching_yield_junk_other_high-risk_bonds.aspx
Once in a while, when I need a topic to write about, I browse the latest press releases from the Securities and Exchange Commission (SEC). ...
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http://www.ifa.com/articles/when_truth_stranger_than_fiction.aspx
In August of 1976, while everyone was dreading the potential epidemic of Legionnaires’ disease, Nobel Laureate Paul A. Samuelson wrote a now famous column in ...
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http://www.ifa.com/articles/index-fund_investing_revisiting_piece_investment_history.aspx
Normally, when you make a mistake, you choke down a slice of humble pie and life goes on. On rare occasion, however, there are mistakes ...
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http://www.ifa.com/articles/naked_short-selling_wall_street_firms_exposed.aspx
While some may accuse us of hindsight for writing this blog during the unfolding of the Facebook IPO debacle in which $12.8 billion of shareholder ...
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http://www.ifa.com/articles/concerns_with_ipos.aspx
Source: NASA On rare occasions, a change so profound and significant occurs in the financial world that it is given the “big bang” designation. Examples ...
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http://www.ifa.com/articles/A_Big_Bang_for_401k_Plans.aspx
The only consistent data point we observed is that a majority of active equity and bond managers in most categories lag comparable benchmark indices....
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http://www.ifa.com/articles/active_passive_deeper_look_into_fixed_income.aspx
“We have met the enemy…and he is us.” So begins the 51-page report from the Kauffman Foundation, a $2 billion non-profit with a vision to ...
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http://www.ifa.com/articles/ewing_marion_kauffman_foundation_report_venture_capital_funds_cautionary_tale.aspx
About a month ago, I wrote about Nicolas Darvas, a world famous dancer who claimed that he made $2 million in the stock market. This ...
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http://www.ifa.com/articles/wall_street_other_vegas.aspx
While we at Index Funds Advisors, Inc. do not dismiss the bleak scenario envisioned by the authors of books such as Aftershock or The Day ...
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http://www.ifa.com/articles/books_doomsday_genre_read_this_before_you_read_them.aspx
...
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http://www.ifa.com/articles/Exchange_Traded_Notes.aspx
...
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http://www.ifa.com/articles/Bestting_vs_Investing.aspx
...
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http://www.ifa.com/articles/How_I_Made_2Mil.aspx
Betting vs. Investing: What We Can Learn from March Madness...
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http://www.ifa.com/articles/Betting_vs_Investing.aspx
- Wednesday, March 21, 2012
Where the Money Grows...
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http://www.ifa.com/articles/The_Money_Grows.aspx
MF Global and the Meaning of Chutzpah...
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http://www.ifa.com/articles/MF_Global_and_the_Meaning_of_Chutzpah.aspx
- Wednesday, March 14, 2012
...
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http://www.ifa.com/articles/.aspx
- Wednesday, March 14, 2012
Active vs. Passive: The View from Standard & Poors...
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http://www.ifa.com/articles/Active_vs_Passive.aspx
- Wednesday, March 14, 2012
Escaping from the Great Vampire Squid...
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http://www.ifa.com/articles/Escaping_from_the_Great_Vampire_Squid.aspx
The S&P Persistence Scorecard report on the performance of active funds has been issued, and for manager pickers, the results are not so encouraging....
read more »
http://www.ifa.com/articles/Manager_Picking_is_a_Mugs_Game.aspx
- Tuesday, February 28, 2012
Our experiment will be Warren Buffett and his son, Howard Buffett, who has been designated as the future chairman of the board of Berkshire Hathaway....
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http://www.ifa.com/articles/howard-buffett-berkshire-hathaway.aspx
- Tuesday, February 14, 2012
The End of Wall Street as We Know It—And We Feel Fine...
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http://www.ifa.com/articles/The_End_Of_Wall_Street.aspx
- Tuesday, February 07, 2012
Tough Times for American Funds...
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http://www.ifa.com/articles/Tough_Times_for_American_Funds.aspx
- Friday, February 03, 2012
Just How Skilled of a Manager-Picker Do You Need to Be?...
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http://www.ifa.com/articles/Just_How_Skilled_of_a_Manager-Picker_Do_You_Need_to_Be.aspx
- Thursday, February 02, 2012
Morningstar's Manager of the Year: Luck or Skill?...
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http://www.ifa.com/articles/Luck_or_Skill.aspx
- Tuesday, January 31, 2012
A review of Simon Lack's latest book, The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True, and link to adverse practices of Hedge Funds industry....
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http://www.ifa.com/articles/the_hedge_fund_mirage.aspx
- Wednesday, January 18, 2012
IFA completed an analysis of state retirement pension plans which showed that all of them would have fared better with a portfolio of index funds....
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http://www.ifa.com/articles/private_equity_funds.aspx
...
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http://www.ifa.com/articles/Tilting_Towards_Small_Cap_Stocks.aspx
- Tuesday, January 03, 2012
2011: The Year in Review...
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http://www.ifa.com/articles/2011_The_Year_in_Review.aspx
- Tuesday, December 20, 2011
In this continuing series we look at preferred stock, a special equity security that has properties of both equity and debt instruments....
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http://www.ifa.com/articles/Reaching_for_Yield_Preferred_Stock.aspx
- Sunday, December 11, 2011
Reaching for Yield: High-Yield Mortgage REITs...
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http://www.ifa.com/articles/Reaching_for_Yield_High_Yield_Mortgage_REITs.aspx
- Sunday, December 11, 2011
Hedge Funds on Edge...
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http://www.ifa.com/articles/Hedge_Funds_on_Edge.aspx
- Wednesday, December 07, 2011
International Diversification: Is It Still Worthwhile?...
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http://www.ifa.com/articles/International_Diversification_Is_It_Still_Worthwhile.aspx
- Tuesday, December 06, 2011
Reaching for Yield: High-Dividend Stocks...
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http://www.ifa.com/articles/Reaching_for_Yield_High_Dividend_Stocks.aspx
- Thursday, December 01, 2011
Is There a Manager Risk Premium?...
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http://www.ifa.com/articles/Is_There_a_Manager_Risk_Premium.aspx
- Monday, November 28, 2011
...
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http://www.ifa.com/articles/A_Step_In_The_Wrong_Direxion.aspx
- Tuesday, November 22, 2011
Index Funds Advisors, Inc’s Concerns with Muni Bonds...
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http://www.ifa.com/articles/IFA_Concern_with_Muni_Bonds.aspx
If you ask 1,000 stock pickers for an explanation for why they chose to buy a particular stock, you are likely to get 1,000 different answers....
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http://www.ifa.com/articles/Stock-Pickers_and_the_Illusion_of_Validity.aspx
- Tuesday, October 25, 2011
IFA’s Concerns with ETFs ...
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http://www.ifa.com/articles/IFAs_Conerns_with_ETFs.aspx
- Wednesday, September 28, 2011
UBS: A Rotten Culture Inspires Rotten Actions...
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http://www.ifa.com/articles/UBS_A_Rotten_Culture_Inspires_Rotten_Actions.aspx
- Monday, September 26, 2011
Warren Buffett, Market Efficiency and the Disappearance of Alpha...
read more »
http://www.ifa.com/articles/Warren_Buffett,_Market_Efficiency_and_the_Disappearance_of_Alpha.aspx
- Sunday, September 18, 2011
Using the Morningstar Direct database, IFA performed its own study of how actively managed funds have done vs. the passively managed DFA funds in categories outside of domestic large cap. The table below summarizes the results:...
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http://www.ifa.com/articles/Indexing-is-it-Appropriate.aspx
Leverage amplifies market returns - when the market goes down, the amplification of the negative return creates a hurdle that is difficult to overcome...
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http://www.ifa.com/articles/Leverage_A_Good_Idea_or_a_Dangerous_Risk.aspx
Both stock-picking and hiring active managers to pick your stocks for you are mug’s games. Very few investors, if any, receive alpha consistently....
read more »
http://www.ifa.com/articles/Never_Ending_Pursuit_of_Alpha.aspx
Index Funds Advisors constructs its portfolios based on the three-factor asset pricing model that Eugene Fama and Kenneth French introduced in 1993....
read more »
http://www.ifa.com/articles/Constructing_Portfolios.aspx
A real estate investment trust (REIT) is a security that trades like a stock on the major exchanges and invests in commercial real estate directly....
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http://www.ifa.com/articles/Non-Traded_REITs.aspx
Here, we look at a couple of real-world examples of cognitive biases and relate them to investor behaviors that IFA has observed more than a few times...
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http://www.ifa.com/articles/Cognitive_Biases.aspx
An article in the Wall Street Journal shows the problem of people not having the finances that they need for retirement will be worse than expected....
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http://www.ifa.com/articles/Planning_for_retirement.aspx
Currency trading is just another type of speculation, and as we all know, the expected return of speculation is zero before costs and negative after....
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http://www.ifa.com/articles/IFAs_Conerns_with_Currency_Speculation_and_Trading.aspx
CALPERS bought land in Arizona with the hope that it'd be developed into a residential community. The land sold for only 8% of its purchasing price!...
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http://www.ifa.com/articles/CALPERS_Arizona_Land_Speculation.aspx
IFA implores taxpayers to keep an eye on government officials entrusted with public funds and to help them steer clear of the sharks of Wall Street....
read more »
http://www.ifa.com/articles/Wall_Street_Still_Running_Amok.aspx
Tactical Asset Allocation, or TAA, is simply market-timing but with only a set portion of the whole portfolio. It is IFA's position that TAA is futile...
read more »
http://www.ifa.com/articles/Tactical_Allocation.aspx
IFA relies on the scientific method of statistical analysis. The most important application of statistics lies in the realm of hypothesis testing....
read more »
http://www.ifa.com/articles/Use_of_Statistics_in_Making_Investment_Decisions.aspx
Investors should not waste their time seeking managers who supposedly deliver alpha, or returns above what can be explained by the assumption of risk....
read more »
http://www.ifa.com/articles/Fooled_by_Randomness.aspx
- Sunday, September 12, 2010
Alpha takes the volatility (price risk) of a mutual fund (or any managed portfolio) and compares its risk-adjusted performance to a benchmark index....
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http://www.ifa.com/articles/The_Pursuit_of_Alpha.aspx
A simple test determining whether or not the market does a good job of setting prices....
read more »
http://www.ifa.com/articles/Testing_Market_Efficiency.aspx