Articles From Larry Swedroe (28)

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  • Larry Swedroe

    A Mutual Fund to Drool Over

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    by Larry Swedroe — Tuesday, May 27, 2003

    Bill Miller, the manager of the Legg Mason Value Trust fund, has managed to do what no other current manager has done - beat the S&P 500 index twelve years in a row. Surely that incredible feat cannot be attributed to random chance or luck. Therefore, it ...Read More

  • Larry Swedroe

    Balanced & Lifestyle Funds

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    by Larry Swedroe — Monday, March 17, 2003

    One thing the mutual fund industry does well is to create a product and then create demand for that product, even when the product may not be one that is in the investors' best ...Read More

  • Larry Swedroe

    It's Why They Call It The Equity "Risk" Premium

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    by Larry Swedroe — Friday, January 31, 2003

    One of the most popular investment books of recent times was Dow 36,000: The New Strategy For Profiting From The Coming Rise In The Stock Market. The premise of the authors, James K. Glassman and Kevin A. Hassett, was that equity investing was not risky - ...Read More

  • Larry Swedroe

    The Most Important Determinant of Investment Returns

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    by Larry Swedroe — Friday, August 23, 2002

    Financial economists have demonstrated that the most important determinant of a portfolio's return is its asset allocation - the exposure to equity (and within equities the exposure to the risk factors of size and value) and fixed income (and within fixed ...Read More

  • Larry Swedroe

    There Is Trouble In 401(k) Land

    7,019
    by Larry Swedroe — Tuesday, July 16, 2002

    The historical record provided by academic studies is very clear that the winning investment strategy is to invest in funds that are passively-managed index funds, exchange-traded funds (ETFs), and passive asset class funds. Unfortunately, a conflict of ...Read More

  • Larry Swedroe

    Active Small-Cap Managers Add Value: Myth or Reality?

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    by Larry Swedroe — Thursday, May 30, 2002

    One of the more persistent claims from Wall Street is that the inefficiency of information in small-cap stocks allows active managers to exploit market mispricings and outperform passive benchmarks. It is important to note that part of this claim is true ...Read More

  • Larry Swedroe

    Does Indexing Affect Stock Prices?

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    by Larry Swedroe — Tuesday, March 12, 2002

    Index mutual funds have become the villains of an investment soap opera. Active managers have been blaming their underperformance on S&P 500 Index funds. The theory goes like this: money pours into the index funds because of the dissatisfaction with the ...Read More

  • Larry Swedroe

    Explaining The Value Premium

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    by Larry Swedroe — Monday, February 11, 2002

    The historical evidence is that there is a very strong and persistent value premium. From 1964 to 2000 large value stocks outperformed large growth stocks 14.5 percent to 11.1 percent, and small value stocks outperformed small growth stocks 16.6 percent ...Read More

  • Larry Swedroe

    Never In Doubt, Often Wrong

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    by Larry Swedroe — Wednesday, January 2, 2002

    Economists, if they are smart, learn to never make forecasts, especially about the future. If they have to make a forecast, they learn to never give a number. And, if they have to give a number, they learn to never give a date. In that way they can never ...Read More

  • Larry Swedroe

    The Enron Debacle: Lessons To Be Learned

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    by Larry Swedroe — Friday, December 7, 2001

    In December 2000, with its stock trading at a peak of $85 per share, Enron had a market capitalization of over $60 billion, making it one of the largest U.S. companies. Less than one year later, with the stock trading at well under $1 per share, the ...Read More

  • Larry Swedroe

    Risk and Expected Return

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    by Larry Swedroe — Tuesday, November 20, 2001

    The last half of the twentieth century was a golden era for US equity investors. From 1950 through 1999 the S&P 500 Index produced annualized returns of 13.6% per annum, or a real rate of 9.2% per annum. Even more impressive are the returns of the last ...Read More

  • Larry Swedroe

    The Road Less Travelled

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    by Larry Swedroe — Wednesday, November 14, 2001

    As they begin their journey, investors are faced with an immediate fork in the road-the choice between an active and a passive management strategy. Given the substantial body of evidence it seems clear that passive investing is the strategy most likely to ...Read More

  • Larry Swedroe

    Do You Believe That Your Fortune Is In The Stars?

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    by Larry Swedroe — Tuesday, September 25, 2001

    The brand that has emerged as dominant in the 1990s is not Fidelity, Putnam, or even Merrill Lynch-but instead is Morningstar.[/:Author:] —R. Pozen, The Mutual Fund Business, 1998, p.75 Perhaps the most popular approach to selecting mutual funds is to ...Read More

  • Larry Swedroe

    How The Price You Pay Impacts Returns

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    by Larry Swedroe — Thursday, July 26, 2001

    When forecasting investment returns, individuals often make the mistake of simply extrapolating historic returns into the future. In addition, investors make the mistake of "recency." Bull markets lead investors to expect higher future returns, and bear ...Read More

  • Larry Swedroe

    Survivorship Bias

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    by Larry Swedroe — Friday, April 13, 2001

    The above headline should be an SEC-required disclosure for advertisements of many mutual funds. The reported returns of many fund families and their funds are often either misrepresentations (intentional or unintentional) of the returns earned by ...Read More

  • Larry Swedroe

    Market Trends and Investor Behavior

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    by Larry Swedroe — Friday, February 9, 2001

    It's quiz time. I have devised the following test of "investment memory." The period in question is the 30-year period 1970-1999. As you take this little quiz, keep in mind that the last 15 years have probably been among the greatest periods (if not the ...Read More

  • Larry Swedroe

    Too Many Cooks in The Kitchen

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    by Larry Swedroe — Monday, August 14, 2000

    Brad Barber and Terrance Odean of the Graduate School of Management, University of California at Davis, have done a series of studies on investor behavior and performance. The following summary discusses some of their studies and their main findings. Individual investors on ...Read More

  • Larry Swedroe

    How You Interpret the Data Makes All the Difference

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    by Larry Swedroe — Thursday, August 3, 2000

    Business Week is a highly regarded publication. Unfortunately, while its reporting of the business news is excellent, the value of its investment advice is often wrongheaded. The reason is that their objective is to sell magazines and gain advertising ...Read More