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Passing Shots

The Fifth Set Blog

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 »

Investor (Mis)behavior

A well-written recent New York Times article seeks to elucidate the causes of investor (mis)behavior through recent research into behavioral finance.  In the article, the author, Gary Belsky, details five cognitive biases that are hard-wired into human brains.  These biases form the basis for investor  …read more »

Why Pay for Passive – Part Two

In Part Two, we return to our friends at Beat the Market Investors (‘BTMI’), the former active money manager of FSIA-client ‘Jack’. It was an associate at BTMI who posed the question to Jack as he was in the process of transferring his assets, ‘if  …read more »

Why Pay for Passive? The Better Question is…Why Pay for Active? – Part One

A new client of Fifth Set Investment Advisors (I’ll call him Jack) was in the process of informing his prior firm (I’ll call them Beat the Market Investments, ‘BTMI’) that he was moving his account from them. BTMI is a money manager strictly in the  …read more »

A(nother) Lesson for Stock Pickers

There’s much to reflect on following the announcement from J.P. Morgan that it lost $2 billion on a hedging strategy gone bad; “retiring” top executives, Jamie Dimon’s crow eating and supporters of the Volcker Rule saying “I told you so”. Another, less media-driven angle on  …read more »

Why bother with hedge funds?

Why do people bother to invest in hedge funds? Other than a lack of transparency, excessive fees, tax inefficiency, illiquidity, and underperformance, I suppose they’re OK. They do make for nice cocktail party banter. A recent satirical glimpse into the changing language of the hedge  …read more »