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Passing Shots

The Fifth Set Blog

Topics: Asset Allocation, Diversification, Efficient Market Hypothesis, Evidence-Based Investing, Long-term investing, Portfolio Management, Random Walk, Risk Premium, Uncategorized

The S&P 500 is at Record Levels…Five Key Takeaways for Investors

On February 19th, 2020, the S&P 500 index closed at 3,386.15.  That marked the highpoint before the COVID-19 pandemic and subsequent global economic collapse drove the U.S. stock market down 33% in a little over a month.  On August 18th, 2020, amid the continuing twin  …read more »

“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 »

Coronavirus Pandemic Market Meltdown: Shouldn’t the Market be Lower Than It Is?

From February 20th, 2020 through March 23rd, 2020, the S&P 500 plummeted 34%. Concerns about the human and economic impact of the Coronavirus drove stock prices to down at a historic pace. Since then, in the U.S., we have seen tens of thousands lose their  …read more »

The Coronavirus Market Correction – Two Ways to Place Volatility in Context – An Update

Since our March 9th note placing current market volatility in context, the market, as measured by the S&P 500, has continued to see major swings in both directions.  S&P 500 daily losses of 4.9%, 9.5%, 12%, 5.2% and 4.3% have occurred as well as daily  …read more »

Six Quick Thoughts on the Coronavirus Market Meltdown

As I sit to write this post, the Dow Jones Industrial Average is down just less than 1,000 points.  Concerns around the impact of the Coronavirus on both human lives and economic growth is dragging down global equity markets.  Investors are understandably concerned about what  …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 »

Global Asset Allocation: Sometimes You Have to Take the Pain

Diversifying a portfolio through the global allocation of various asset classes increases expected return and reduces portfolio volatility over time.  Both worthwhile goals.  But like eating well and exercising to stay healthy, global asset allocation doesn’t happen without a little suffering. In 2014, investors with  …read more »

The Key to Successful Investing

Responding to an email, I came up with this and thought it was worth sharing… The fundamental problem with bond guys is they are programmed to focus on what could go wrong.  Equity guys are programmed to ignore everything that could go wrong.  Strategic asset  …read more »

What’s better than real world stock picking performance? A world with no investment skill….

No, the title doesn’t have a typo. The results of a recent S&P Dow Jones Indices study profiled in a New York Times article found that only 2 out of 2,862 (or 0.07%) broad domestic stock funds performed in the top quartile of funds over  …read more »

Active Manager Folly: Mutual Fund Landscape Study from Dimensional Fund Advisors

A new study  from Dimensional Fund Advisors reviewing the mutual fund industry highlights the low probability game investors and their advisors play when they attempt to select the best active managers. A few of the interesting data points to come out of the study:    …read more »