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Passing Shots

The Fifth Set Blog

Topics: Asset Allocation, Efficient Market Hypothesis, Evidence-Based Investing, Index, Index Investing, Long-term investing, Passive, Portfolio Management, Random Walk

“The Market” has Recovered its Coronavirus Losses, but Most Stocks are Down Year-To-Date

How we, as investors, define “the market” can obscure actual investment experiences.  To illustrate, look at the following four measures of 2020 year-to-date returns through June 16th. S&P 500 (Large U.S. Stocks): -2.4% Russell 3000 (Broad U.S. Stocks) -2.8% Russell 3000 median stock: -17.6% FAANG[1]  …read more »

Great Stock Market, Horrendous Economy, What is Happening Here?

From March 24th, 2020 through May 26th, 2020, the stock market, as measured by the S&P 500, returned 36%.  That is not typo.  Over the same period of time, we have seen a torrent of terrible economic news. For example, on April 24th, the Congressional  …read more »

The Coronavirus Market Meltdown Continues – Two Ways to Place the Volatility in Context

This morning global equity markets continued the recent volatility around the Coronavirus’ human and economic impacts.  As of this morning, the S&P 500 is trading down roughly 5% and since February 20th, 2020, the S&P is down roughly 17%.   The uncertainly around the virus and  …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 »

U.S. News & World Report: Ian Post on “7 Ways Millennials Are Becoming Great Investors”

Read Ian’s comments in a recent U.S. News & World Report article that looks at what we can learn from the way Millennials invest… Millennials know to start saving early. The best thing you can do for your investments is start early. “Through compounding and  …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 »

A Brief History of the Index Fund

On the 40th anniversary[1] of the launch of the First Index Investment Trust (now the Vanguard 500 Index Fund), it is interesting to note how the original premise of index funds has held up over time.  The premise that a low-cost, unmanaged fund, simply composed  …read more »