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Passing Shots

The Fifth Set Blog

Topics: Brokers vs. Advisors, Fiduciary, Taxes

Getting to Know the Fifth Set Credentials – The Enrolled Agent (EA)

When an individual or business needs a tax professional, the credential most typically sought out is the certified public accountant (CPA). However, there is another, albeit less well-known designation, that also represents tax practitioner professionals authorized by the US Department of the Treasury: Enrolled Agent  …read more »

IPOs – High Profiles, Low Returns – Following the Evidence

One of the benefits derived from the evidence-based investment approach is the systematic avoidance of underperforming investment strategies.  Media narratives and marketing drive many of these strategies, that while they might help increase advertising sales and commissions, do little to help investors develop successful investment  …read more »

Seven Bullet Points to Address Investor Client Standard of Care

The financial advice industry has long been separated between 1) Registered Investment Advisor firms (RIAs), which operate under the Investment Advisers Act of 1940 and whose representatives’ duty is to deliver investment advice, and 2) Broker-Dealers, whose representatives are in the business of selling financial  …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 »

Why Pay for Passive…Part Three

In a recent white paper, “Vanguard – Quantifying Advisor Alpha“, mutual fund company Vanguard attempts to quantify the added value of the “passive” investment advisor.  They estimate the value at as much as 3% per year without any attempt at outperforming the market. In two  …read more »

Broker Conflicts of Interest and Municipal Bond Investments

Is it a coincidence that seemingly every prospective client’s taxable account currently managed by a brokerage firm includes the same two security types; expensive actively-managed equity mutual funds and individual municipal bonds? Viewed through the lens of massive conflicts of interest, it’s easy to see  …read more »

Prediction Season

Following the end of year holiday season is a somewhat less celebrated but equally anticipated season.  No, I don’t mean award season.  I’m talking about prediction season.  Prediction season is when many Wall Street pundits and talking heads, otherwise known as Chief Market Strategists and  …read more »

The Prediction Paradox

In the summary description of the book The Signal and the Noise: Why So Many Predictions Fail – But Some Don’t, written by political forecaster, Nate Silver, there is a wonderful quote… “The Prediction Paradox: the more humility we have about our ability to make  …read more »

What’s In a Name? Advice From a Brand Name Firm May Not Be Everything It’s Cracked Up to Be

Many investors continue to believe they can feel secure that their finances are managed by a “brand name” firm such as J.P. Morgan.  Underlying this sense of security is a lack of understanding about how the brokerage business is structured.  Financial “advisors” employed by major  …read more »