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Passing Shots

The Fifth Set Blog

Investors Are Usually Wrong

In a recent New York Times article, Jeff Sommer, discussed the implications of new data from Dalbar, a research firm that studies the behavior of mutual fund investors.  Their latest research shows that over the past 10 years, stock investors under-performed the S&P 500 by  …read more »

Interest Rate Changes and Stock Returns – A Way to Actively Position Stock Portfolios?

Jerome Powell, Chair of the Federal Reserve recently signaled the Fed’s readiness to cut the target for short term interest rates (federal funds rate) at the next meeting on July 30th and 31st.  According to the Federal Reserve Bank of Atlanta, as of 7/19/19, the  …read more »

The Guru and The Investor: Act 2 – The Evidence-Based Advisor Strikes Back

Act Two The Setting Following his interview of a hedge-fund manager to see if he should manage his retirement assets, the Investor turns his search to a different type of advisor, for a philosophy based on something called ‘evidence-based investing’.  This seemingly outlandish idea is  …read more »

The Evidence is in (Again). Indexing Beats Active Management.

S&P Dow Jones Indices released their latest SPIVA (S&P Index vs Active) scorecard for the period ending December 2018.  If you’re a fan of active fund managers, the news is not good. Following are some quick data points and a video from NBR with Bob  …read more »

The Guru and The Investor: A Hedge Fund Story

Act One The Setting Guru appears on CNBC to explain what will happen with interest rates, Brexit, and the economy over the next two years.  Investor sees Guru on TV and assumes that CNBC would only have people on their shows who knew what they  …read more »

Déjà Vu All Over Again

Investment fads do not lead to investment success.  Discipline to a long-term investment strategy is the key.   This post from Dimensional Fund Advisors offers a compelling rebuttal of past investment fads and an alternative investment approach driven by evidence and academic research…    

John Bogle, Founder of Vanguard and Pioneer of Index Investing, Passes Away

John (Jack) Bogle passed away this week at the age of 89.  The founder of Vanguard was instrumental in the rise of index and low-cost investing.  His efforts positively impacted the lives of millions of investors.  David Booth, founder of Dimensional Fund Advisors, offers some  …read more »

Five Money Saving 2018 Year-End Tax Tips

As we approach the end of the year and begin making plans for 2019, it is an ideal time to take advantage of tax saving opportunities that are still available for 2018. Here are five ways to reduce your tax obligations before year-end. 401k/403b/457 Plans  …read more »

What People Want to Know and What is Knowable Are Two Different Things: The FiveThirtyEight Political Forecast Model and a Better Approach to Investing

With the 2018 midterm elections tomorrow, I noted a similar conceptual approach between a political forecast website I follow called FiveThirtyEight (www.fivethirtyeight.com) and the evidence-based approach to investing.    If you are not familiar with FiveThirtyEight, it is a political and sports forecast website developed by  …read more »

The S&P 500 vs. The World: S&P 500 Returns Have Been the Best So Why Bother with Anything Else?

  From January 2014 through August 2018, the S&P 500 Index, driven by the strength in large growth stocks, particularly large technology stocks, has bested the rest of the major global asset classes by a wide margin. The chart below shows how the S&P 500  …read more »