Articles (141)

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

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

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

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

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

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

Dollar cost averaging is the process of investing a lump-sum of money over a predetermined period of time. For example, let’s say you have $120,000 to invest. You can either invest the entire $120,000 or spread it out over a year - investing $10,000 every month. Here is ...Read More

The explosion in ETFs over the past decade has been substantial. Marrying the ideas of fund management with the ability to trade throughout the day, ETFs have become one of the most popular vehicles utilized by investors. In fact, according to the 2017 Fact Book from the ...Read More

2017 started off on a positive note for global investors. With international and emerging markets leading the way, most global indices on are track for another great year. In the U.S., jobless claims fell to their lowest point since March of 1973, housing starts climbed to their ...Read More

Investing, in a nutshell, is really about dealing with risk and uncertainty.  While most of us like to focus on return aspect of investing, it is important to remember that return is only one side of the “investment coin.” Risk and uncertainty is on the other ...Read More

In Step 11 of the IFA 12-Step Recovery Program for Active Managers we talk about the implementation of our 100 IFA Index Portfolios. As strong proponents of a passive investment strategy, we have options in terms of what strategies we would like to utilize to build our globally ...Read More

Applied Quantitative Research (AQR) was founded in 1998 by Clifford Asness, David Kabiller, Robert Krial, and John Liew. Similar to Dimensional Fund Advisors, AQRs roots stem back to the University of Chicago where Asness, Liew, and Krial originally met when they were doctoral ...Read More

Since the 1950s, there have been numerous breakthroughs in the field of financial economics that have benefited both society and investors. One early example, resulting from research in the 1950s, is the insight that diversification can increase an investor’s wealth. ...Read More

As advocates for passive investing, it is a common question amongst clients and prospects about why our 100 IFA Index Portfolios utilize strategies from Dimensional Fund Advisors versus better-known passive fund companies such as Vanguard or iShares. The answer is quite simple: ...Read More

Trivia time: how many stocks make up the Wilshire 5000 Total Market Index (a widely used benchmark for the US equity market)? While the logical guess might be 5,000, as of December 31, 2016, the index actually contained around 3,600 names. In fact, the last time this index ...Read More

Since the firm’s founding in 1999, investor education has been one of the cornerstones of our business model. Understanding the link between investment knowledge and risk capacity, our commitment to providing empirical insight to how financial markets work makes our ...Read More

There were a lot of great themes we could take out of 2016. Ideas like diversification and patience when targeting risk premiums all presented themselves this year. First, it is important to remind investors that 2016 had a very tough start. In the month of January, the S&P ...Read More

New York based money manager, Alliance Bernstein, has built a reputation of being one of the leading investment experts. They currently manage $490 Billion in assets, have 47 locations across 21 different countries, have close to 3,500 employees, and is currently traded on the ...Read More

As many of our readers know, we don’t think too highly of the active mutual fund industry. Not because we have a personal vendetta against them, but because their pursuit of attempting to outperform the market using other investors’ money has only enriched themselves ...Read More

Hedge funds have received a pretty bad wrap since the last financial crisis. Some of the big stories that involved illegal behavior on behalf of hedge funds include Dreier LLP, Weavering Capital, Capitol Investments USA, Westgate Capital Management, Petters Group Worldwide, ...Read More

Boston based money manager, Putnam Investments, has fallen on some hard times. As reported in the Boston Globe article, on Tuesday the company announced that it is going to cut 115 jobs or about 8% of its workforce given the continued outflow of assets from their firm. Currently ...Read More

Diversification provides many benefits for investors. Not only can we increase expected returns for a given level of risk, but we can also increase the reliability of capturing premiums or “dimensions” of expected return. In other words, once we decide that we want ...Read More

Over the last few years we have seen an increase in the number of lawsuits bringing brought against employers for conflicts revolving in and around the retirement plans they provide for their employees. One of the most recent headlines involves New York based money manager, ...Read More

In 1958, economist Leonard Read published an essay entitled “I, Pencil: My Family Tree as Told to Leonard E. Read.” The essay, narrated from the point of view of a pencil, describes the “complex combination of miracles” necessary to create and bring to ...Read More

The 3rd Quarter of 2016 was a great example of the disconnect between markets and economies that many often believe are closely tied together. While economic indicators are extremely important in terms of the market’s anticipation of long term growth, the two do not ...Read More

Many investors have caught on to the idea of the different dimensions of expected return or “premiums” such as the market, size, relative price (value), profitability, and capital investment factors. We at IFA have long advocated for a passive investment strategy ...Read More

Jack Dreyfus, also known as “The Lion of Wall Street,” founded Dreyfus Funds in New York City in 1951. A 1964 Life Magazine article attributes Dreyfus as revolutionizing the advertising of mutual funds, which were largely a part of institutional investing (i.e. ...Read More

The Bank of New York Mellon, officially, has only been in existence since 2007 from a merger, but its roots span all the way back to the birth of our nation. The Bank of New York was founded 232 years ago by the first US Secretary of the Treasury, ...Read More

Columbia Management is one of the largest investment management firms in the world. With close to 7 full decades of industry experience and expertise and over 100 individual investment strategies, Columbia has become a staple within the fund industry. As of year-end 2015, their ...Read More

The second quarter of 2016 was mixed in terms of good and bad news as well as performance. While the Eurozone experienced a big shock in terms of the unanticipated “Brexit” vote, the United States experienced falling jobless claims, increasing in consumer prices, and ...Read More

San Francisco based Dodge & Cox is one of the most well-known investment management firms in the world. More impressively, they have been able to build a very sizeable asset base on the back of just 6 mutual funds. According to Morningstar, total assets under management as ...Read More

A common question we receive from clients has to do with bond strategies. Should we buy bond funds or build individual bond ladders? There are a few things to keep in mind when thinking the role of fixed income from a portfolio standpoint. As an investment advisor, we think ...Read More

Vanguard is the largest fund management company in the world. Mostly known for being a pioneer in the development of index funds, they also carry quite a few actively managed funds in their lineup.                      ...Read More

Invesco Ltd. is one of the most well-known investment firms in the country. Their operations span over 20 different countries around the world and are involved in investment management, wealth management, banking, and alternative ...Read More

T. Rowe Price has clearly stated their value proposition to their investors. But what exactly is that value and, more importantly, who is receiving the bulk of that value?                               ...Read More

Once again, Oppenheimer Funds has produced an excellent commercial highlighting their investment of ideology of understanding the collective human behavior that drives markets and building investment solutions based on their understanding of that behavior. The most recent ...Read More

The first quarter of this year was a textbook case on the importance of having discipline when approaching the investment process. January was a punishing month for markets around the world as fears of China’s economic slowdown precipitated across all major asset classes. ...Read More

King Midas of Pessinus was a well-known character in Greek mythology that was known for turning whatever he touched into gold, known as the Midas Touch. Some companies have embraced the story of King Midas and his touch within their own ...Read More

Oppenheimer Funds is a subsidiary of Oppenheimer Holdings & Co., one of the largest financial institutions in the entire world. Having roots dated over a century ago, the Oppenheimer name has acted as a beacon of financial expertise. Their services include investment baking, ...Read More

Wells Fargo is one of the largest institutions in the world. In fact, it is considered a Systematically Important Financial Institution (SIFI), in which its failure could potentially lead to a much larger financial crisis, similar to what we experienced in 2008 and ...Read More

No doubt one of the biggest stories over the last 18 months has been oil. Currently, oil prices (as measured by the WTI Crude Index) are at levels we haven’t seen for almost 13 years. While many see falling oil prices acting as a tailwind for the overall economy, ...Read More

The best way we can describe the 4th Quarter, overall, is a great end to somewhat of an abysmal year. Stocks delivered positive results in the United States, International/Developed, and Emerging Markets. Global Real Estate and Foreign Bonds also posted positive results, while ...Read More

The dimensions of expected return are a finer topic that most of our own investors are aware of, but not necessarily the greater ...Read More

As we start the beginning of the year as we all customarily do, evaluating some of the things we neglected in the previous year, such as health and wellness, certain relationships, etc., and decide to reverse those trends this year, the one thing that should not be on the ...Read More

The world economy is a continuously shifting system. Consumer preferences are in constant flux and new ideas for businesses are cropping up what seems like every single day. Where investors place value can tell us a lot about the future growth of any local or regional economy, ...Read More

The 3rd Quarter of 2015 could pretty much be summed up by one word: red. We saw a lot of it, all over the world, among pretty much all asset classes. While Greece was dominating the headlines during the 2nd Quarter of this year, those stories of uncertainty migrated ...Read More

Many market participants presume that long-term interest rates will rise when a Fed tightening policy begins. However, history shows that short-term rates and long-term rates do not move in ...Read More

Anyone who is keeping even a casual eye on financial headlines these days is aware that fixed income returns have been a moving target for a while now – at home and abroad. The general consensus is that rates will rise eventually. With almost nowhere to go but up, ...Read More

There has been tremendous asset growth in exchange-traded funds (ETFs) over the last 5 years. According to the Investment Company Institute (ICI), net assets have grown from $777 billion at year-end 2009 to $1.974 trillion at year-end 2014 (250% total growth)[i]. Understandably, ...Read More

For about the past ten years, there has been an on-going debate in the world of indexing centering around whether index funds should be weighted by capitalization (the traditional method) or by fundamental factors such as dividends, sales, book value, et al. Proponents of ...Read More

Many of our clients have been concerned about the issues involving Greece. Likewise, growth in China, the world’s second largest economy has begun to slow causing concern for investors about what the future holds from one of the biggest contributors to the global economy. ...Read More

The 2nd Quarter of 2015 was quite a tumultuous one. With concerns over Greece existing the Eurozone, markets experienced significant volatility late in the quarter. For those investors who were able to ride out the volatility, they were rewarded in terms of performance. European ...Read More

As most of our readers can probably tell, we are big fans of Dimensional Fund Advisors (DFA). Our recommended mutual fund lineup, record-keeper for retirement plans, and experts for research in the field of finance all come from DFA. While most clients and prospects probably ...Read More

Owners of all-purpose motor vehicles often appreciate their cars most when they leave smooth city freeways for rough gravel country roads. In investment, highly diversified portfolios can provide similar reassurance. In blue skies and open highways, flimsy city sedans might ...Read More