Articles (1,594)

Professional performers might be successful in the spotlight, but advisor warns that a new set of skills is necessary to manage any newfound wealth. What to keep in ...Read More

The U.S. retirement plan marketplace keeps evolving. Just ask Shareen Balkey, who sees such changes in 401(k) plans and the like as boosting the need for true fiduciaries to help both plan participants and ...Read More

At the end of each quarter, investors can see dividend and/or capital gain distributions from their mutual funds. The mechanics may seem confusing, so we want to take the opportunity to review the ...Read More

I was trained as a journalist to approach any type of speculative claim with a high degree of skepticism. But it took years of sifting through a wealth of academic research and market evidence for me to finally make a career change. In all honesty, it's just become too apparent ...Read More

Each year, fund managers randomly land in one of four performance quartiles. And, every year, Standard and Poor's issues its annual Persistence Scorecard, tracking the past and subsequent performance of those managers. One of the uses of the study is to track how winning ...Read More

Embarking on a financial plan is like sailing around the world. The voyage won’t always go to plan, and there’ll be rough seas. But the odds of reaching your destination increase greatly if you are prepared, flexible, patient, and well-advised. A mistake many ...Read More

Great-West Financial is a subsidiary of Great-West Life, Co. (TSX: GWO), which itself is a subsidiary of Power Financial Corp. (TSX: POW) based out of Montreal, Quebec, Canada. Great-West Financial is the American market for Great-West Life, Co.’s, selling its investment, ...Read More

Despite a push by regulators to raise legal standards for how brokers work with investors, misdeeds keep popping up in the public record. The latest development is that the Securities and Exchange Commission has settled with Ameriprise Financial Services over allegations the ...Read More

Markets have been up and down this year, which can be hard for many investors to live with. During periods like these, hearing stories about how other people deal with uncertainty can be helpful. My friend Dave Goetsch is an executive producer of The Big Bang Theory. Even though ...Read More

To pique the interest of investors, the financial media often features stories about the hidden dangers in the market—and index funds have been a recurring topic lately. According to some stories, the rising popularity of indexing has distorted prices because fewer shares ...Read More

In 2017, we were again reminded of the importance of following an investment approach based on discipline and diversification vs. prediction and ...Read More

Once again in quarter four of 2017, markets delivered positive results across all major asset classes to close out the year.  While International Developed Markets fell behind the performance of U.S. Domestic Equities when comparing quarter three with quarter four; Emerging ...Read More

In light of all this market volatility over the last few days, we wanted to remind you of the benefits of being a buy and hold ...Read More

After a period of relative calm in the markets, in recent days the increase in volatility in the stock market has resulted in renewed anxiety for many investors. From February 1–5, the US market (as measured by the Russell 3000 Index) fell almost 6%, resulting in many ...Read More

Throughout 2017, the S&P 500 Index recorded 62 new closing highs in 251 days of trading. In the first three weeks of January 2018 alone, the index crossed 10 new record closing highs in 13 days of trading. With stock indices continuing to set new highs, does this mean ...Read More

“Reversion to the mean,” Jack Bogle once said, “is the iron rule of financial markets.” And if you understand nothing else about how investing works, grasping this one simple concept will give you a better chance of succeeding at it than supposedly ...Read More

Prudential Financial is a Fortune 500 company based out of Newark, New Jersey. Traded on the New York Stock Exchange (NYSE: PRU), Prudential Financial employs over 49,000 people across 40 countries, offers insurance products, wealth management, fund management, and retirement ...Read More

“I have found that the importance of having an investment philosophy—one that is robust and that you can stick with— cannot be overstated.” – David Booth The US stock market has delivered an average annual return of around 10% since 1926.[1] ...Read More

Imagine you’re at a village fête, and you decide to have a go at guessing the number of jelly beans in a jar. How confident would you be of guessing exactly right or, say within one or two of the actual number? Chances are, it’s a bit of a long ...Read More

Recently, we received a question from a client that we will paraphrase as follows: “While I know that the returns I have gotten from index funds have beaten the majority of active managers, would I not have been better off in funds like the Fairholme Fund (FAIRX) or the ...Read More

By pursuing a globally diversified approach to investing, one doesn’t have to attempt to pick winners to achieve a rewarding investment experience. Every day we enjoy the benefits of an interconnected world. We might start our day with a cup of coffee that originated in ...Read More

As investors ring in the new year, some may see the occasional headline about the “January Indicator” or “January Barometer.” This theory suggests that the price movement of the S&P 500 during the month of January may signal whether that index will ...Read More

As we begin 2018, it has become a tradition that we reflect on the prior year by collecting our IFA statistics (or, what has grown to be known as IFA By the Numbers) on the abundance and wealth of information we provide in dedication towards replacing speculation with an ...Read More

The financial media is drawn to catchphrases, acronyms, and buzzwords that can be sold as the new thing. FAANG (Facebook, Apple, Amazon, Netflix, and Google) is the latest of these. But does this constitute an investment strategy? For journalists, commentators, and marketers, ...Read More

Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional ...Read More

It is important for investors to rebalance their portfolio to achieve risk control and maintain long-term investing ...Read More

Most of us remember the days at school when we had our routine fire drill. The fire alarms around the school would ring, we would all calmly and collectedly stand up, form a line, and walk out of the school to a safe place. While I am sure many ...Read More

Focusing on what you can control can lead to a better investment experience. Whether you’ve been investing for decades or are just getting started, at some point on your investment journey you’ll likely ask yourself some of the questions below. Trying to answer these ...Read More

Imagine I told you, “Over the past 10 years, you’ve made money in the stock market, but you could have made a lot more.  The people managing your money charged you more than average, and had big parties each year.  This year the main party was awesome ...Read More

Professor Richard Thaler from the University of Chicago received the 2017 Nobel Memorial Prize in Economic Sciences for his work in behavioral finance. This comes just four years after his colleague, Eugene Fama, received his Nobel Memorial Prize for his work on asset pricing ...Read More

At Index Fund Advisors, it is standard operating procedure for us to tailor how we manage client portfolios at year-end in anticipation of dividend and capital gains distributions from the mutual funds that we buy. The gist of this strategy is that we do not want to buy into ...Read More

In the September 2017 issue of The Atlantic magazine, an article entitled “Are Index Funds Evil?” caught the attention of us, and what we would suspect, the attention of many passive investors. The crux of the argument made has to deal with shareholder ...Read More

Most investors are aware of the standard “age in bonds” asset allocation strategy. Naturally, as you get older the higher your allocation to bonds. A 20 year old would have an 80/20 stock/bond split while a 70 year old would have a 30/70 stock bond split. The ...Read More

Markets delivered strong positive results across the board in the 3rd Quarter of 2017. International Developed Markets and Emerging Markets continued their outperformance of the U.S. In the U.S., companies posted profit growth not seen in close to six years, factory-sector ...Read More

We at Index Fund Advisors provide many reasons why investors should steer clear of actively managed mutual funds. Mainly, they have failed to deliver on their proposed value proposition: excess risk-adjusted returns (i.e. “alpha”). The number that has delivered is ...Read More

Many investors remember the most recent financial crisis and the toll that it took, not only on their retirement portfolio, but also their sanity. The subsequent impact of this event left many jaded in terms of trusting markets with their long-term savings. One of the ...Read More

Franklin Templeton is one of the biggest asset managers in the world. Celebrating its 70th Anniversary this year, Franklin Templeton has become a household name among retail and institutional investors alike. Based out of San Mateo, CA, Franklin Templeton manages approximately ...Read More

For the investors who are familiar with the known dimensions of expected return (size, relative-price, profitability, etc.), chances are that you have decided to tilt your portfolio accordingly. IFA’s 100 Index Portfolio also tilt our asset allocation towards small cap and ...Read More

Near the very top of everyone’s financial planning list of questions is, “when can I afford to retire?” What may seem like a very straightforward question does not have such a straightforward answer. The value an independent fiduciary wealth advisor brings to ...Read More

Boston based asset manager, Loomis Sayles, has been around since just before the Great Depression. As of March 31, 2017, they manage close to $250 billion in assets under management across 10 mutual fund strategies, institutional separate accounts, collective trusts, and hedge ...Read More

Harvard Business School graduate Jerome L. Dodson founded San Francisco-based Parnassus Investments in 1984. Launching their first investment strategy in 1984, the Parnassus Fund (PARNX), with an eye towards responsible investing, one of the distinguishing characteristics of ...Read More

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. While some investors diligently study individual stocks and other investors handsomely pay active managers to deliver alpha (an ...Read More

Debt: properly used can be very beneficial, but misused can lead an individual down the path of financial ruin. Many financial firms espouse the benefits of acquiring debt by using securities portfolios as collateral for margin loans. Getting a loan against your securities ...Read More

One of the hottest topics in the financial services industry over the last two years has been the Department of Labor’s “Fiduciary Rule” as it applies to retirement assets. There have been many debates in the U.S. Congress and practitioners alike about the ...Read More

Ronald Baron is widely known as one of the most successful investors in the U.S. Getting his start in the brokerage industry, Mr. Baron focused on the smaller, less desirable companies that didn’t seem necessarily attractive to most money managers. Finding success early on ...Read More

Each year, Dimensional analyzes returns from a large sample of US-based mutual funds. Our objective is to document the power of market prices by assessing fund manager performance relative to index benchmarks. This year’s study updates results through 2016. The evidence ...Read More

Markets continued their climb during the 2nd Quarter of 2017 with most of the gains coming from outside of the United States. In the U.S., home sales reached highest levels since its peak before the 2008 Financial Crisis, job openings hit hew highs, the unemployment level fell ...Read More

The financial services industry has evolved over the last six decades. What started as essentially a broker or salesman role for getting people access to publicly traded securities has transformed into an academic discipline. We have documented this evolution from its roots with ...Read More

Multi-factor investing is slowly becoming a more common investment strategy among professional investment management firms. These firms, more informally known as “quants,” use statistical models to understand the common factors that drive performance in markets ...Read More

The global market breakdown represents the value of capitalism among the U.S., International/Developed, and Emerging Markets around the world. Investors can use the global market breakdown as a starting point in determining their overall equity asset allocation and then make ...Read More

Should stock investors worry about changes in interest rates? Research shows that, like stock prices, changes in interest rates and bond prices are largely unpredictable.[1] It follows that an investment strategy based upon attempting to exploit these sorts of changes ...Read More

JP Morgan publishes their annual “Long-Term Capital Market Assumptions” report every year with the hopes of providing professionals guidance in terms of what we should expect from markets over the next 10 to 15 years. On its face, being able to accurately forecast ...Read More

You may think that college endowments, with all their access to academic knowledge and brainpower, would outperform portfolios composed of index funds. Unfortunately, this is simply not the case. Take a look at the chart below from the National Association of College and ...Read More

A very common sales pitch amongst the active management community is their ability to provide “downside protection” for investors in falling markets. Here is an example from MFS Investment Management and our appropriate response. Given that most investors remember ...Read More

Giving investment advice should always aim to meet investors at their level of understanding. We do not expect everyone to have a PhD in Economics, so it is important to focus on big ideas that are the most crucial to understand. This can include ideas such as diversification, ...Read More

Legg Mason, Inc. has been a powerhouse in the world of asset management for over a century. Founded in Baltimore, Maryland in 1899, Legg Mason is a publicly traded company (NYSE: LM) manages $710 billion in assets across six continents and employs over 3,400 professionals across ...Read More

After more than 35 years in the financial services industry, I have found that having an investment philosophy—one that is robust and that you can stick with—cannot be ...Read More

How can we determine whether or not we have identified an exploitable risk premium—a source of higher expected returns that we can implement in our portfolios? To understand the concept of a risk premium, imagine that the only available investment is Treasury Bills, widely ...Read More

It should go without saying that doing business should always involve doing the very best for the person on the other side of the handshake. Unfortunately, this is not a requirement from a legal standpoint. The concept of caveat emptor, or “buyer beware” pervades ...Read More

DALBAR 2016 QAIB: Investors are Still Their Own Worst Enemy   Tom Allen & Mark Hebner   For 23 years, DALBAR has been publishing their annual Quantitative Analysis of Investor Behavior study that examines investor performance in mutual funds. Their goal is to shed ...Read More