Articles (1,551)

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 ...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 ...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 ...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 ...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 ...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 ...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. ...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 ...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 ...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 ...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 ...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 ...Read More

The financial advisory business has a very low barrier to entry. Actually, let me rephrase that. It has absolutely NO barrier to entry. Your neighbor, hair stylist, or even your pastor can give financial ...Read More

“Given that active managers’ performance can vary based on market cycles, the newly available 15-year data tells a more stable narrative. Over the 15-year period ending Dec. 2016, 92.15% of ...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 ...Read More

A recent article from the LA Times highlighted the recent trend of small investors putting more of their retirement savings into passive index funds. Citing multiple statistics from the Investment Company ...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 ...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 ...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 ...Read More

The growth in passive investing continued in ...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 ...Read More

“We're blind to our blindness. We have very little idea of how little we know. We're not designed to know how little we know.”– Daniel KahnemanThe Intelligent Investor   Working in the ...Read More

It should be quite obvious to anyone that economics have an effect on markets. Predictions about employment, GDP growth, inflation, fiscal and monetary policy, trade balance, all have an effect on global ...Read More

What Are Required Minimum Distributions? Required Minimum Distributions are distributions required to be taken annually from traditional IRAs and employer-sponsored retirement plans after you reach age 70.5. ...Read More

Many investors receive company stock or stock options from their employer as part of their overall compensation. What may seem like a small part of their overall portfolio, company stock can become a much ...Read More

When it comes to analyzing active management performance, it is important to understand the role that luck can play over various time horizons. Given the randomness of markets around the world, there is always ...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 ...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 ...Read More

Back in 2007, Warren Buffett made a $1 Million bet with Ted Seides from Protégé Partners that a simple index fund will outperform hedge funds over the subsequent 10-year period. We have covered ...Read More

We often remind our readers that when dealing with random variables, like returns in the market, it is crucial that you are able to speak the language of statistics, which we call Riskese. In the world of ...Read More

Ever ridden in a car with worn-out shock absorbers? Every bump is jarring, every corner stomach-churning, and every red light an excuse to assume the brace position. Owning an undiversified portfolio can ...Read More

We take an academic approach to investing at Index Fund Advisors, Inc. We utilize an evidence-based strategy that relies on objective, peer-reviewed research that has been published in academic financial and ...Read More

The beginning of the year is a great time to remind investors of the contribution limits for various savings vehicles in order for them to maximize their tax-preferential savings and avoiding, what can be, ...Read More

College endowment performance is out for 2016 and there is a surprising winner with a not so surprising investment strategy, at least to us. Many endowments have been known for following the “Yale ...Read More

As we start approaching April 18th, we wanted to keep our clients informed of when their 1099 Composites will be available online at Fidelity, TD Ameritrade, and Charles Schwab. The chart below details when ...Read More

The fiduciary rule issued last year by the Department of Labor (DOL) and backed by the previous administration is now under review at the request of the new administration and implementation may be delayed. ...Read More

As we begin 2017, 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 ...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 ...Read More

Expectations can be a double edged sword. On one side, expectations represent what is most likely to take place, which can have practical value when talking about planning for the future. On the other hand, it ...Read More

Every year brings its share of surprises. But how many of us could have imagined that 2016 would see the Chicago Cubs win the World Series, Bob Dylan receive the Nobel Prize in Literature, Donald Trump elected ...Read More

Over the holiday weekend, I was having a discussion with a family member about saving for college given the recent birth of their daughter. This particular family member was looking into a 529 plan, but was ...Read More

After coming off of a performing 2016 and with certain indices, like the Dow Jones Industrial Average, at or near all-time highs, many investors may be wondering if a market contraction is on the horizon. ...Read More

As an investor it is important to understand the value your advisor provides for the fee they are charging you. While many traditional financial firms believe the majority of their value comes in the form of ...Read More

As we come to the end of the year it is important to reflect on some of the lessons learned from 2016. One of the biggest that comes to mind is the importance of discipline when it comes to investing, ...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 ...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 ...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 ...Read More

Saving for retirement, let alone saving enough for a retirement, is a difficult endeavor for most investors. With the majority of baby boomers being underfunded for retirement, the overall conclusion that ...Read More

At about the same time last year we saw the Federal Reserve raise the Federal Funds Rate by 0.25%. In anticipation to the Fed’s announcement, investors took to the markets to try and get ahead in terms ...Read More

The Wall Street Journal recently published a series of articles under the title “The Passivists.” Highlighting the merits of a passive investment approach, authors tackle topics such as the ...Read More

The Wall Street Journal recently published a series of articles under the title “The Passivists.” Highlighting the merits of a passive investment approach, authors tackle topics such as the ...Read More

The Wall Street Journal recently published a series of articles under the title “The Passivists.” Highlighting the merits of a passive investment approach, authors tackle topics such as the ...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 ...Read More

“You make more money selling advice than following it. It’s one of those things we count on in the magazine business—along with the short term memory of our readers.” – Steve ...Read More

The Wall Street Journal recently published a series of articles under the title “The Passivists.” Highlighting the merits of a passive investment approach, authors tackle topics such as the ...Read More

While we believe there are many reasons why investors should look into adopting a passive investment strategy that incorporates buying, holding, and rebalancing a globally diversified portfolio of index funds, ...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 ...Read More

As we approach the year-end, clients should be expecting both dividend and capital gain distributions from the mutual funds in their portfolio. The mechanics may confuse some investors, so we wanted to take ...Read More