• Chat with an advisorLIVE CHAT
• CONTACT US  | 
• Call: 888-643-3133  | 

Quote of the Week Archives

IFA’s Quote of the Week provides expert commentary on financial events, proprietary investment research, and a contrarian view of Wall Street. Don’t miss a single issue. Please enter your email below to signup for IFA's Quote of the Week. Connect with IFA Sign up here to receive the latest IFA newsletters, updates, articles, and IFA.tv shows. Enter your email address below.

Quote of the Week Archives:

Sort by Steps

---

• QOW 97
• December 22, 2011
• Alpha Bits or Lucky Charms?
• Meir Statman
• Step 5
• 

• QOW 96
• October 20, 2011
• Pension-Gate
• David Swensen
• Step 5
• 

• QOW 95
• September 23, 2011
• Up and Down, Down and Up
• Warren Buffett
• Step 4
• 

• QOW 94
• September 09, 2011
• A Gross Mistake
• Bill Gross
• Step 4

• QOW 93
• August 23, 2011
• Celebrate the Price
• Sir John Templeton
• Step 4
• 

• QOW 92
• August 05, 2011
• A Special Message From IFA
• Index Funds Advisors
• Step 9
• 

• QOW 91
• July 28, 2011
• The Never-Ending Pursuit of Alpha
• William Bernstein
• Step 3
• 

• QOW 90
• May 09, 2011
• IFA Celebrates 1,000 Months of Data
• William Bernstein
• Step 9
• 

• QOW 89
• April 01, 2011
• Wise Beyond Your Years
• Rod Stewart
• Step 12
• 

• QOW 88
• March 14, 2011
• Fools and Children
• Rabbi Yohanan ben Nappaha
• Step 4
• 

• QOW 87
• February 11, 2011
• The Big Story Behind Small Stocks
• Katie Benner, Scott Cendrowski, and Mina Kimes
• Step 3
• 

• QOW 86
• January 19, 2011
• Fortune Kookie
• Anonymous Fortune magazine writer
• Step 3
• 

• QOW 85
• January 13, 2011
• Fool Me Twice?
• Niels Bohr
• Step 4
• 

• QOW 84
• December 06, 2010
• Who Profits if Markets Are Inefficient?
• Meir Statman
• Step 3
• 

• QOW 83
• September 24, 2010
• The Role of Randomness & the Goal of Persistence
• Charles D. Ellis
• Step 5
• 

• QOW 82
• September 10, 2010
• Proper Benchmarking and Alpha
• Jack Meyer
• Step 5
• 

• QOW 81
• August 30, 2010
• Commodity ETFs Revisited
• Peter Robison, Asjylyn Loder, and Alan Bjerga
• Step 1
• 

• QOW 80
• August 17, 2010
• Resisting the Siren Songs
• Robert Arnott
• Step 1
• 

• QOW 79
• July 29, 2010
• Upton Sinclair's Insight for Improving Your 401(k) Returns
• Upton Sinclair
• Step 7
• 

• QOW 78
• July 15, 2010
• Grading Your Employer’s 401k Plan
• William Bernstein
• Step 7
• 

• QOW 77
• June 15, 2010
• Can You Afford Sophistication?
• Mark T. Hebner
• Step 5
• 

• QOW 76
• May 13, 2010
• Black Swans, Fat Tails and Your Money
• Eugene Fama
• Step 1
• 

• QOW 75
• April 28, 2010
• Who Should You Trust?
• Knut A. Rostad
• Step 12
• 

• QOW 74
• April 22, 2010
• I.R.S.: Investment Returns Sucker
• John Bogle
• Step 7
• 

• QOW 73
• April 01, 2010
• Only Fools Rush In…and Out
• Jim Wiandt
• Step 7
• 

• QOW 72
• March 15, 2010
• One Year Later: Lessons from the Fall
• Mark Hulbert
• Step 4
• 
• 

• QOW 71
• March 01, 2010
• Sweet Surrender
• Paul Samuelson
• Step 3
• 
• 

• QOW 70
• February 12, 2010
• Super Nova to Black Hole
• William Bernstein
• Step 3
• 
• 

• QOW 69
• February 01, 2010
• Professional Advisors Prove Their Worth in 401(k) Plans
• Christopher L. Jones
• Step 11
• 

• QOW 68
• January 22, 2010
• Is Timing with ETFs a Good Idea?
• Harry F. Banks
• Step 4

• QOW 67
• January 08, 2010
• All that Glitters is Not Gold
• Sherlock Holmes
• Step 9
• 

• QOW 66
• December 22, 2009
• The Value of the Right Advisor
• William Bernstein
• Step 1
• 
• 

• QOW 65
• December 04, 2009
• From Frying Pan to Fire
• Absence of Value
• Step 5
• 

• QOW 64
• November 23, 2009
• Paying for Pay to Play
• John C. Bogle
• Step 7
• 

• QOW 63
• October 26, 2009
• The Case of the Fallen Fiduciary
• Mark Twain
• Step 5
• 

• QOW 62
• October 02, 2009
• False Discoveries of the Elusive Alpha
• David F. Swensen
• Step 5
• 

• QOW 60
• September 04, 2009
• IFA's Position Statement on Investing
• Mark T. Hebner
• Step 1
• 

• QOW 59
• September 03, 2009
• Probability in Motion
• Warren Weaver
• Step 8

• QOW 58
• July 09, 2009
• Oops, He Did It Again!
• Robert Soros
• Step 5
• 

• QOW 57
• June 01, 2009
• Socialism, So What?
• Mark Hebner
• Step 9
• 

• QOW 56
• July 12, 2009
• Stop the Insanity
• Albert Einstein
• Step 12

• QOW 55
• May 29, 2009
• How to Ruin a Good Thing
• Warren Buffett
• Step 4
• 

• QOW 53
• April 22, 2009
• Testing Market Efficiency
• Mark T. Hebner
• Step 2
• 

• QOW 52
• April 03, 2009
• Hedge Funds: A Fool’s Errand
• Fred Schwed Jr.
• Step 5
• 
• 

• QOW 51
• March 27, 2009
• A Special Message From Mark Hebner
• Mark Hebner
• Step 12
• 

• QOW 50
• March 19, 2009
• Naked Truths
• Warren Buffett
• Step 12
• 

• QOW 49
• March 07, 2009
• Where's the Market Going?
• Michael Edesess
• Step 9
• 

• QOW 48
• February 27, 2009
• Where Have All the Returns Gone?
• Mark Hulbert
• Step 7
• 

• QOW 47
• February 09, 2009
• Risk: A Primer
• Charles Ellis
• Step 1
• 

• QOW 46
• January 12, 2009
• Draw the Line in '09
• John C. Bogle
• Step 1
• 
• 

• QOW 45
• January 02, 2009
• Oh, How the Mighty Fall
• Peter Cohan
• Step 5
• 
• 

• QOW 44
• December 22, 2008
• You’re a Mean One, Mr. Madoff
• Burton Malkiel
• Step 5
• 
• 

• QOW 43
• December 12, 2008
• Last One In Has a Rotten Nest Egg
• The Financial Press
• Step 5
• 

• QOW 42
• December 05, 2008
• Financial Fear Factor
• Franklin D. Roosevelt
• Step 9
• 

• QOW 41
• November 26, 2008
• Are We There Yet?
• Burton Malkiel
• Step 8
• 

• QOW 40
• November 18, 2008
• Don’t Try This At Home
• William Bernstein
• Step 1
• 
• 

• QOW 39
• November 03, 2008
• Free Markets are Doing Their Job
• Marlena I. Lee
• Step 8
• 

• QOW 38
• October 20, 2008
• The Resilience of Capitalism
• Mark T. Hebner
• Step 10
• 

• QOW 37
• October 06, 2008
• The 40-Year Old Lesson
• Harry Markowitz
• Step 10
• 

• QOW 36
• September 26, 2008
• Should You Be Worried About Your Investments?
• Mark T. Hebner
• Step 10
• 

• QOW 35
• September 17, 2008
• Fallen Market Perspectives
• Jeremy J. Siegel
• Step 9
• 

• QOW 34
• September 12, 2008
• What Are You Paying for Your 401(k)?
• Michael C. Keenan
• Step 7
• 

• QOW 33
• September 05, 2008
• Commodities: A Cautionary Tale
• Matt Krantz
• Step 11
• 

• QOW 32
• August 29, 2008
• Should You Invest in Down Markets?
• Benjamin Graham
• Step 9
• 

• QOW 31
• August 18, 2008
• It's Not Easy Bein' Green
• Kermit the Frog
• Step 11
• 

• QOW 30
• August 11, 2008
• A 12-Step Program For Stockoholics
• Bill Miller
• Step 1
• 

• QOW 29
• August 01, 2008
• Lessons From Benjamin Graham
• Benjamin Graham
• Step 4
• 

• QOW 28
• July 25, 2008
• Value of Long-term Equity Investing
• James Pardoe
• Step 9
• 

• QOW 27
• July 16, 2008
• Nobody Told Me There’d Be Days Like These
• John Lennon
• Step 8
• 

• QOW 25
• June 30, 2008
• Investments with higher expected returns
• William F. Sharpe
• Step 8
• 

• QOW 24
• June 20, 2008
• Commodity Futures
• Truman A. Clark
• Step 11
• 

• QOW 23
• June 12, 2008
• Eugene Fama Receives Morgan Stanley-AFA Award for Excellence in Finance
• Richard C. Green
• Step 8
• 

• QOW 22
• June 04, 2008
• A Good Portfolio
• Harry Markowitz
• Step 11
• 

• QOW 21
• March 27, 2008
• Who still believes markets don't work?
• Rex Sinquefield
• Step 1
• 

• QOW 20
• May 19, 2008
• Chances are you won't beat an Index Fund
• David F. Swensen
• Step 8
• 

• QOW 19
• May 12, 2008
• Index funds, an alternative to actively managed funds
• Michael C. Keenan
• Step 7
• 

• QOW 18
• May 01, 2008
• Risks and benefits of hedge fund investing
• Stanford Graduate School of Business
• Step 5
• 

• QOW 17
• April 28, 2008
• Managers who can beat the street
• Jack Meyer
• Step 5
• 

• QOW 16
• April 14, 2008
• Active Management Taxes
• Theodore Aronson
• Step 7
• 

• QOW 15
• April 21, 2008
• Hidden Fees in 401k
• George Miller
• Step 7
• 

• QOW 14
• April 07, 2008
• Reported Mutual Fund Returns
• John C. Bogle
• Step 1
• 

• QOW 13
• March 31, 2008
• The Bigger Fool
• Ben Kenobi
• Step 5
• 

• QOW 12
• March 26, 2008
• A thing is worth only what someone else will pay for it
• Latin Truism
• Step 3
• 

• QOW 11
• March 17, 2008
• Hedge funds are risky
• Burton G. Malkiel
• Step 5
• 

• QOW 10
• March 11, 2008
• The stock market is like a gambling casino
• Burton G. Malkiel
• Step 9
• 

• QOW 9
• March 03, 2008
• Chance Alone
• Merton Miller
• Step 3
• 

• QOW 8
• February 25, 2008
• History You Don't Know
• Harry S. Truman
• Step 9
• 

• QOW 7
• February 18, 2008
• Higher Expected Returns?
• William F. Sharpe
• Step 8
• 

• QOW 6
• February 11, 2008
• Tax Loss Harvesting
• Mark T. Hebner
• Step 7
• 

• QOW 5
• February 04, 2008
• Our favourite holding period is forever
• Warren Buffett
• Step 10
• 

• QOW 4
• January 28, 2008
• Two Kinds of Investors
• William Bernstein
• Step 4
• 

• QOW 3
• January 21, 2008
• Surprising truths about long and short-term investing
• Charles Ellis
• Step 8
• 

• QOW 2
• January 14, 2008
• Unforeseen Circumstances
• Burton Malkiel
• Step 4
• 

• QOW 1
• January 07, 2008
• You will almost never find a fund manager who can repeatedly beat the market
• John C. Bogle
• Step 5
• 

• 12-Steps:
  • Chart Index
  • The 12-Step Introduction
  • The 12-Step Overview
  • About the Author
  • Preface
  • Short Book on Investing
  • IFA 12-Step Brochure [PDF]
  • Intro Print Version [PDF]
  • PowerPoint Presenation
  • PowerPoint [PDF]
  • Art Gallery
  • FAQ
  • IFA Store
  • Buy the Book
  • Backtested Disclosures
• Step 1
  

  Step 1: Active Investors

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • 1.2.1 Active Investors
  • 1.2.2 Index Funds Investors
  • 1.2.3 Beating the Market
  • 1.2.4 Risk Measurements

  Problems

  • 1.3.1 Active Investors are Everywhere
  • 1.3.2 Active Investors are Gamblers
  • 1.3.3 Active Investors Lose
  • 1.3.4 The Poor Accounting of Active Investors
  • 1.3.5 Stock Market Prices are Random
  • 1.3.6 Stock Markets are Efficient
  • 1.3.7 When Risk Capacity is not Matched with Risk Exposure
  • 1.3.8 The High Cost of Turnover
  • 1.3.9 The Emotional Stress of Active Investing
  • 1.3.10 More than 1,500 Investors can be Wrong

  Solutions

  • 1.4.1 Active Investors Anonymous
  • 1.4.2 The Ulysses Pact
  • 1.4.3 The History of 12-Step Recovery Programs
  • 1.4.4 The Big Book of Investing
  • 1.4.5 Top Investors Agree
  • 1.4.6 Index Funds Investors Win
• Step 2
  

  Step 2: Nobel Laureates

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Fee Page
  • Backtested Disclosures

  Definitions

  • 2.2.1 Nobel Prize in Economic Sciences
  • 2.2.2 The University of Chicago, Center for Research in Security Prices, and the Stock Market Database

  Problems

  • 2.3.1 Investors Rely on Lady Luck
  • 2.3.2 Active Investors are Unaware of Academic Studies

  Solutions

  • Alfred Nobel
  • Blaise Pascal
  • Edmund Halley
  • Adam Smith
  • Louis Bachelier
  • Alfred Cowles
  • Harry Markowitz
  • James Tobin
  • Frank Modigliani
  • Merton Miller
  • William Sharpe
  • Paul Samuelson
  • Eugene Fama
  • Michael Jensen
  • Rex Sinquefield
  • Friedrich von Hayek
  • Burton Malkiel
  • John Bogle
  • David Booth
  • Kenneth French
  • Who Do You Trust?
  • Market Forces: May They Be With You
• Step 3
  

  Step 3: Stock Pickers

  • • Page: 
    • page 1
    • page 2
    • page 3
    • page 4
    • page 5
    • page 6
    • page 7
    • page 8
    • page 9

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • 3.2.1 Stock Pickers
  • 3.2.2 Adjusted Performance

  Problems

  • 3.3.1 Why Stock Pickers Fail
  • 3.3.2 The Stock Picker’s Graveyard
  • 3.3.3 Incubator Funds
  • 3.3.4 Studies and Observations that Show the Daunting Odds of Stock Picking
  • 3.3.5 Stock Pickers and Coin Flippers
  • 3.3.6 Stock Pickers are Focused on Short Term
  • 3.3.7 Stock Pickers are Style Drifters
  • 3.3.8 Stock Pickers are Looking for a Needle in a Haystack
  • 3.3.9 Stock Pickers Play a Zero Sum Game
  • 3.3.10 Stock Pickers in International Markets
  • 3.3.11 Stock Pickers in Small-Cap Markets
  • 3.3.12 Stock Pickers Pay More Taxes
  • 3.3.13 Stock Picking Gurus and Their Real Records
  • 3.3.14 Stock Pickers Don’t Want You to Know the Truth

  Solutions

• Step 4
  

  Step 4: Time Pickers

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • 4.2.1 Random Walk Theory
  • 4.2.2 Efficient Market Hypothesis

  Problems

  • 4.3.1 Pickers are Fooled by Randomness
  • 4.3.2 Academic Studies Prove that Time Picking doesn’t Work
  • 4.3.3 Time Picking Gurus
  • 4.3.4 Gains and Losses are Impossible to Identify in Advance
  • 4.3.5 Time Pickers Pay More Taxes

  Solutions
• Step 5
  

  Step 5: Manager Pickers

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  Problems

  • 5.3.1 Past Performance is No Guarantee of Future Results
  • 5.3.2 Persistence in Track Records
  • 5.3.3 Sources of Information Used by Manager Pickers
  • Is a Highly Rated Fund a Good Thing?
  • The Forbes Mutual Fund Honor Roll
  • Mutual Fund Advertisements
  • 5.3.4 Markets Make Managers
  • 5.3.5 Irrelevant Benchmarks

  Solutions
• Step 6
  

  Step 6: Style Drifters

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • 6.2.1 Investment Style
  • 6.2.2 Style Drift

  Problems

  • 6.3.1 Style Drift Alters Risk Exposure
  • 6.3.2 Style Drifters
  • 6.3.3 Style Drift and the Fama/French Risk Factors

  Solutions
• Step 7
  

  Step 7: Silent Partners

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  Problems

  • 7.3.1 Active Investors are Unaware of All the Costs
  • 7.3.2 Taxes
  • 7.3.3 Inflation

  Solutions

  • 7.4.1 Index Funds and Tax-Managed Index Funds
  • 7.4.2 Reduce Taxes and Turnover Costs with Index Funds
• Step 8
  

  Step 8: Riskese

  • • Page: 
    • page 1
    • page 2
    • page 3
    • page 4
    • page 5

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • 8.2.1 Standard Deviation
  • 8.2.2 Probability Distributions and Histograms
  • 8.2.3 Mean Reversion
  • 8.2.4 Expected Return
  • 8.2.5 Rolling Period Returns
  • 8.2.6 Risk
  • 8.2.7 The Dimensions of Stock Return
  • Market Risk Factor
  • Size Risk Factor
  • Value Risk Factor
  • Term Risk Factor
  • Default Risk Factor
  • 8.2.8 Implications of the Fama/French Three-Factor Model
  • 8.2.9 Time Diversification of Risk

  Problems

  • 8.3.1 Active Investors don’t Understand Risk and Return
  • 8.3.2 Investors Like Comfort and Dislike Uncertainty
  • 8.3.3 Stock Pickers Dilute the Two Important Risk Factors
  • 8.3.4 The Myth of the Ideal Investment

  Solutions
• Step 9
  

  Step 9: History

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • 9.2.1 Historical Databases and Studies
  • 9.2.2 Time Series Construction

  Problems

  Solutions

  • 9.4.1 Long-term History Characterizes Risk and Return
  • 9.4.1a Probability of Portfolio Recovery
  • 9.4.2 Cross Correlation among Indexes
  • A Comparative History of Several Indexes
    using Rolling Periods
  • A Comparative History of Market Cap Deciles
  • The Returns Matrix
• Step 10
  

  Step 10: Risk Capacity

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • Dimension One: Time Horizon and Liquidity Needs
  • Dimension Two: Attitude Toward Risk
  • Dimension Three: Net Worth
  • Dimension Four: Income and Savings Rate
  • Dimension Five: Investment Knowledge

  Problems

  • 10.3.1 Investors do not Properly Assess Risk Capacity
  • 10.3.2 Risk Capacity Changes over Time

  Solutions

  • 10.4.1 The Risk Capacity Survey
  • 10.4.2 The Ten Dimensions of Risk
  • 10.4.3 The Color of Risk Spectrum
  • 10.4.4 Twenty Risk Capacities
  • 10.4.5 Capacity Adjusted Risk
• Step 11
  

  Step 11: Risk Exposure

  • • Page: 
    • page 1
    • page 2
    • page 3
    • page 4
    • page 5
    • page 6

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Backtested Disclosures

  Definitions

  • 11.2.1 Modern Portfolio Theory
  • 11.2.2 Diversification
  • 11.2.3 Global Diversification
  • 11.2.4 Portfolio Rebalancing
  • 11.2.5 Whole Portfolios
  • 11.2.6 The Prudent Investor Act
  • Five Principles of Prudence

  Problems

  • 11.3.1 How Much Risk is There?
  • 11.3.2 Where is the Data?
  • 11.3.3 Investors Want to Avoid Risk
  • 11.3.4 Risk is Good in Proper Doses
  • 11.3.5 Portfolios Get Out of Balance
  • 11.3.6 Selecting Index Funds

  Solutions

  • 11.4.2 Index Mutual Funds Earn more Return and Eliminate more Risk
  • 11.4.3 The Most Efficient Funds on the Market
  • Small Cap Strategy
  • U.S. Small-Cap Strategy
  • U.S. Micro-Cap Strategy
  • Value Strategies
  • U.S. Small-Cap Value Strategy
  • U.S. Large-Cap Value Strategy
  • Real Estate Securities Strategy
  • U.S. Large Company Strategy
  • Developed International Markets
  • Emerging Markets
  • Fixed Income
  • 11.4.4 Are Commodities Worth the Risk?
  • 11.4.5 Matching People with Portfolios
• Step 12
  

  Step 12: Invest and Relax

  • • Page: 
    • page 1
    • page 2
    • page 3

  • Introduction
  • Quotes
  • Summary
  • Review Questions
  • Fees
  • Backtested Disclosures

  Definitions

  • 12.2.1 Registered Investment Advisers
  • 12.2.2 Dimensional Fund Advisors
  • 12.2.3 Rebalancing Portfolios
  • 12.2.4 Rebalancing Formula
  • 12.2.5 Tax Loss Harvesting
  • 12.2.5a Mutual Fund Distributions
  • 12.2.5b Cash Withdrawal Considerations
  • 12.2.6 Financial Advice
  • Estate Planning
  • Insurance
  • Accounting and Tax Advice
  • Investment Advisors
  • Life Planning
  • The Glide Path of Life and Your IFA Index Portfolio
  • Retirement Planner

  Problems

  • 12.3.1 Active Investors Procrastinate
  • 12.3.2 Active Investors "Go It Alone"
  • 12.3.3 The Media Wants Investors to Worry
  • Asset Allocation
  • Minimization of Investment Costs
  • Minimization of Taxes
  • Reliable Investment Performance
  • A Simple and Understandable Investment Strategy
  • An Easier Way to Track Investment Performance
  • Increased Leverage and Compounding
    of Investment Wealth
  • Invest like Institutional Investors

  Solutions