Tuesday, May 21, 2013
Recent Enhancements to Small Cap Investment Strategies
One of the reasons we at Index Funds Advisors advise using funds from Dimensional Fund Advisors is that Dimensional never stops seeking ways to add
Monday, May 20, 2013
Stupid Is As Stupid Says
You know those days when a long list of to-do’s instantly gives way to the necessity to respond to something that strikes you so viscerally
Monday, May 20, 2013
What we can learn from a Retiring Market Strategist
"Investing is an unusual profession: perhaps the only one where amateurs have a good shot at beating the pros."
Friday, May 17, 2013
Memo from the 99% to Goldman: Keep Your Hedge Funds!
While scanning my Google Alerts on investment-related articles, Antione Gara’s Goldman Offers Hedge Funds to the 99% grabbed my attention. The article describes Goldman Sachs
Wednesday, May 15, 2013
When Is the Right Time to Take Social Security Benefits?
Americans who are near or in retirement are faced with the vexing question of when to take Social Security benefits.
Wednesday, May 15, 2013
Save Yourself the Headache…And The Hole in Your Wallet!
"Experience is simply the name we give our mistakes." - Oscar Wilde - Why investors do not have to learn the hard way to be good investors!
Tuesday, May 14, 2013
The Capitalism, Inc. Stock Certificate
At Index Funds Advisors, we are sometimes asked if there is any company whose stock we would recommend buying. Our tongue-in-cheek answer is shown...
Tuesday, May 14, 2013
To Roth or Not to Roth in Your 401(k)?
A question we are commonly asked at Index Funds Advisors is whether contributions to a 401(k) plan should be to a traditional or a Roth account.
Tuesday, May 14, 2013
The Never-Ending Pursuit of Alpha – Updated
As we have pointed out on many occasions, both stock picking and hiring an active manager to pick stocks on your behalf are mug’s games.
Monday, May 13, 2013
Man vs. Machine: A Battle Best Avoided
A question we are often asked at Index Funds Advisors is whether the individual investor stands a chance against the high-frequency traders.
Monday, May 13, 2013
The Cost of Trading: Seeing the Full Picture
There have been numerous academic studies examining the relationship between the cost of investing and its subsequent impact on performance.
Monday, May 13, 2013
The Evolution of Dimensional
We believe that the best way to add value over benchmark returns is by structuring portfolios around the dimensions of expected returns.
Tuesday, May 07, 2013
Style Drift on Steroids
In Step 6 of IFA’s 12-Step Recovery Program for Active Investors, we analyze the problem of style drift, the tendency of active managers to buy
Wednesday, May 01, 2013
Sell in May? Forget about It!
It never fails that at the beginning of May we receive a query about the “Sell in May and go away” market-timing strategy. We have
Wednesday, May 01, 2013
“You Have to Be in Gold”
We are living in a world of money printing. … That is why I have to recommend gold again. ... Once gold surpasses $1,800 an
Tuesday, April 30, 2013
The Matrix Book: A DFA Tradition
Call us data wonks, but at Index Funds Advisors, one of the things we look forward to every spring is the release of the DFA Matrix Book.
Tuesday, April 30, 2013
The Rule of 72: A Mathematical Thing of Beauty
As an admitted math geek, I never tire of learning tricks that simplify otherwise complex calculations. My favorite trick is known as "the rule of 72"
Monday, April 29, 2013
Gold: And Then There's The Downside!
A Gallup poll published in April of 2012 found that 30% considered gold to be the best long term investment versus stock, bonds, and real estate.
Friday, April 26, 2013
F.A. Hayek: A Progenitor of Market Efficiency
“I am convinced that if it [the price system of a free market] were the result of deliberate human design, and if the people guided
Thursday, April 25, 2013
The 12-Step Recovery Program for Retirement Gamblers
For the last fourteen years, IFA has been educating investors on the sensible way to invest, based on decades of academic research. Amid all the
Saturday, April 20, 2013
Smart Sustainable Investing
There are a handful of funds that address sustainability, with just too many satisfying an emotional pull, packing the proverbial sizzle, but no steak
Wednesday, April 17, 2013
Taking Stock of the STOCK Act
In November of 2011, 60 Minutes did an eye-opening expose’ of members of Congress who profited from stock trading based on information. The
Tuesday, April 16, 2013
Vanguard Makes the Case for Indexing
As someone who follows the world of passive investing quite closely, one publication that I eagerly await every year is The Case for
Monday, April 15, 2013
The Misuse of ETFs and Index Funds
Anyone who has spent more than five minutes on IFA’s Website knows how strongly we argue that all types of investors can
Friday, April 12, 2013
Another Arithmetic Lesson from William Sharpe
Nobel Laureate William Sharpe is one of the academic linchpins of IFA’s investment philosophy.
Thursday, April 11, 2013
Saving for College: Addressing a Significant Financial Challenge (Third of a Three Part Series)
In the first part of this series, we gave an overview of 529 plans and the due diligence that investors should perform before choosing one
Thursday, April 04, 2013
1Q/2013: The Quarter in Review
The first quarter of 2013 was a quarter in which risk was rewarded. Once again, the market climbed a wall of worry centered on government
Thursday, April 04, 2013
Running to Stand Still
Trying to correctly time your entry point to the market is never easy. Just ask the experts. In early February, strategists at a global investment
Wednesday, April 03, 2013
"We're Only Human" – A Look Inside the Psychology of Investor Behavior
"The investor's chief problem, and even his worst enemy, is likely to be himself." - Benjamin Graham, The Intelligent Investor
Wednesday, April 03, 2013
What's a Mother to Do?
investors who are paralyzed with confusion are hardly to blame, especially since most of these opinions are intelligently and articulately presented.
Monday, April 01, 2013
Active vs. Passive: 2012 Standard & Poor's Update
The year 2012 marked the return of the double digit gains across all the domestic and global equity indices.
Monday, April 01, 2013
Momentum: A Fourth Factor
Throughout IFA’s Website, you will find references to the three-factor model formulated by Professors Eugene Fama and Ken French,
Wednesday, March 27, 2013
Hedge Funds: A Deeper Look into their Returns
Despite the dismal results delivered to their investors since inception1, hedge funds have continued to grow, reaching a record $2.25 trillion ...
Thursday, March 21, 2013
CalPERS' Continued Setbacks Might Lead to Greener Pastures – For Everyone!
According to Investment News, CalPERS is considering dropping its current active approach to embrace a more passive investment strategy.
Wednesday, March 20, 2013
SAC Capital Sets a New Record – but Not One to Boast About
A story that we have been following for some time now is the SEC/FBI investigation of SAC Capital Advisors for insider trading. On March 15th,
Wednesday, March 20, 2013
Index Funds are Parasitic? That's a New One!
A recent article entitled, "Index funds are parasites and are going to kill the market" commented on the increasingly popular use of index funds.
Monday, March 18, 2013
Saving for College: Addressing a Significant Financial Challenge (Second of a Three Part Series)
In the first part of this series, we gave an overview of 529 plans and the due diligence that investors should perform before choosing one
Thursday, March 14, 2013
Expensive Mistakes
There are two ways of learning: You can be taught how to do something correctly, or you can be shown the consequences of doing it wrong...
Monday, March 11, 2013
Dow 20,000? Not Quite Yet!
At Index Funds Advisors, Inc., we have long counseled investors not to pay heed to market predictions from the talking heads of high finance.
Monday, March 11, 2013
What Is Your Fund's Active Share, and Should You Care?
To borrow from a Vanguard study1, "active share" is defined as the percentage of a portfolio that differs from a benchmark index.
Thursday, March 07, 2013
Northern Exposure: Short-Sighted
Not long ago, fatigued investors were feeling the weight of two severe financial crises, periods of stock market volatility, and an endless supply of bad economic news.
Thursday, February 28, 2013
Papers Cited in IFA's Investment Policy Statement
At Index Funds Advisors, Inc. we take an academic approach to investing. This means that we rely on objective and peer-reviewed research.
Thursday, February 14, 2013
Betting against the House
It's New Year's Day 2012. In addition to overdosing on televised college football, you're spending part of the holiday working on the family finances.
Tuesday, February 12, 2013
Saving for College: Addressing a Significant Financial Challenge (First of a Three Part Series)
With an inflation rate for college costs that has averaged double that of the Consumer Price Index, investors face a substantial headwind.
Monday, February 11, 2013
Unrealized Capital Gains vs. Investment Gains: An Important Distinction
Quite frequently, an IFA advisor or I will speak to a client who thinks he has lost money because of what he sees on an
Tuesday, February 05, 2013
Betting Against Buffett: So Far Not So Good
From the title of this article, you may have thought I was referring to someone who took a short position in Berkshire Hathaway. While I
Wednesday, January 23, 2013
What Some People Will Do to Beat the Market!
While hedge funds as a whole have failed to deliver their investors a higher return than T-Bills1, there are a few that have provided above-market
Tuesday, January 22, 2013
An Explanation of IFA's New Tagline
As you may have noticed, we at Index Funds Advisors have changed our tagline from "matching people with portfolios" to "fiduciaries for wealth".
Friday, January 18, 2013
Economic Forecasting and Market-Timing: Stay Clear of It!
Anybody who watches CNBC during market hours gets treated to a litany of economic predictions and their expected impact on market prices.
Thursday, January 17, 2013
Jack Bogle on CNBC: A $1 Trillion Swing in Investors' Preferences
Investors pulled close to $120 billion out of actively managed U.S. stock funds in 2012 making it the biggest yearly outflow since 2008.
Friday, January 11, 2013
2012: Another Dismal Year for Active Managers and Market Predictors
At Index Funds Advisors, we often counsel investors to avoid a “prediction addiction” and to especially avoid listening to...
Thursday, January 10, 2013
IFA's Concerns with Laddered Bond Portfolios
The primary concern with a bond ladder is the exposure to the default risk, manager continuity risk, and selection risk of individual bonds.
Monday, January 07, 2013
2012: The Year It Didn’t Happen
Judging by the headlines in the financial press, investors spent much of the past year anxiously awaiting one calamity after another that failed to occur.
Thursday, January 03, 2013
The Tax Implications of the “Fiscal Cliff” Bill Passed on January 2nd
The American Taxpayer Relief Act of 2012 has the following provisions: The budget sequestration would be delayed by two months, to give time for further
Wednesday, January 02, 2013
2012: The Year in Review
Markets climbed not just a wall of worry, but a "fiscal cliff" that turned out to be much ado about nothing, at least from the market's perspective.
Friday, December 21, 2012
New Website to Help Stop Investment Scams
A few weeks ago, I wrote about the continuing proliferation of Ponzi Schemes in the post-Madoff world.
Tuesday, December 18, 2012
Arthur Wiesenberger: The Morningstar of His Day
A recent addition to IFA's ever-expanding collection of antique finance books is the 1954 edition of Investment Companies by Arthur Wiesenberger.
Monday, December 17, 2012
The Nobel Foundation: Isn’t It Ironic…Don’t You Think?
The highly coveted Nobel Prize has been the pinnacle of academic achievement for advances in science and culture. Unfortunately, the Nobel Foundation believes in touting
Tuesday, December 11, 2012
Ponzi Schemes After Madoff: A Sad Story Continues
It has been almost exactly four years since Bernie Madoff was revealed as the operator of the largest Ponzi scheme in history (estimated at $64.8
Monday, December 10, 2012
Forecasting Stock Market Returns:
Why We Don't Do It
A recent whitepaper from Vanguard analyzed the impact of sixteen different variables on subsequent equity returns.
Friday, November 30, 2012
Tax Rates and Stock Returns
With all the chatter in the financial media about the impending fiscal cliff, investors cannot be blamed for their confusion. Some investors have expressed a
Thursday, November 29, 2012
What a License Plate Reveals
While driving to work today, I was racking my brain for a good topic to write about when suddenly, a black Ferrari convertible zoomed past
Wednesday, November 07, 2012
Warren Buffett, Market Efficiency and the Disappearance of Alpha
Warren Buffett, Market Efficiency and the Disappearance of Alpha
Tuesday, November 06, 2012
Deja Vu: Sandy and the Great Blizzard of 1888
While Sandy was well forecasted, folks back in 1888 had no benefit of foresight. Northeasterners were caught off-guard that early Sunday morning.
Thursday, November 01, 2012
Can You Do Well While Doing Good?
Investors have long been rewarded for the capital they provide to the
global markets. For some, investing is purely about return.
Thursday, November 01, 2012
The 7 Most Important Equations for Your Retirement - A New Book by Moshe Milevsky
Anyone who is concerned with retirement would benefit from reading this book. Even the most math phobic among us should not be intimidated by the title.
Friday, October 26, 2012
The New UBS Mortgage REIT Leveraged ETN - Taking Risk to Dizzying Heights
At Index Funds Advisors, Inc. we have consistently warned investors away from the complex financial products put out by the large Wall Street firms.
Wednesday, October 24, 2012
The Impact of Bad Investor Behavior
Professors Brad Barber and Terrance Odean published a survey of studies showing the deleterious impact of bad behavior on investors' wealth.
Tuesday, October 23, 2012
When Two Minuses Do Not Make a Plus
As a registered investment advisor, Index Funds Advisors, Inc. is constantly solicited by mutual fund companies and ETF (exchange-traded fund) providers hoping to convince us
Friday, October 19, 2012
The Google Earnings Debacle: The Piranhas Attack
At Index Funds Advisors, Inc, we often talk about the Efficient Markets Hypothesis which states that current prices incorporate all publicly available information.
Thursday, October 18, 2012
The Top Ten Money Excuses
Human beings have an astounding facility for self-deception when it comes to our own money. Here are ten of these excuses: "I want to live today."
Wednesday, October 17, 2012
Sector Rotation: A Sound Investment Approach or an Exercise in Futility?
Introduction Recently, many investors have succumbed to one of the siren songs of active investing, sector-picking. They believe that they can predict which industrial sectors
Monday, October 15, 2012
Hedge Fund Warnings from the SEC
Anyone who is contemplating investing in a hedge fund would do well to read the SEC's Investor Bulletin: Hedge Funds.
Friday, October 12, 2012
Beating a Dead Horse
Once again, the S&P Indices versus Active Funds (SPIVA®) Scorecard shows the dismal story for active management getting worse and worse. For domestic equity funds
Thursday, October 04, 2012
Another Wall of Worry
Investors have been confronted with a steady drumbeat of discouraging news over the past year. It's not difficult to explain why mutual fund investors have generally favored fixed income strategies rather than equities over this past twelve-month period.
Tuesday, September 11, 2012
Confusion of Confusions: An adaptation of the classic masterpiece by Joseph Penso (de la Vega) on the 17th century Amsterdam Stock Exchange
A few weeks ago, I wrote about the origin of stock trading in Amsterdam, so it is only appropriate that I follow up with a
Tuesday, September 11, 2012
A Problem with Jack Bogle? I Don’t Think So!
For anyone who works in the investment advisory business, particularly on the passive side, John (Jack) Bogle is a name held in the highest esteem.
Friday, September 07, 2012
The Economic Consequences of the New Deal
Benjamin Stolberg and Warren Jay Vinton wrote The Economic Consequences of the New Deal in 1935. Benjamin Stolberg was a journalist and writer.
Sunday, September 02, 2012
In Other News
Bad news sells because fear is a more powerful emotion than greed. Newspaper editors know that, which is why the front pages are often so depressing.
Monday, August 13, 2012
Amsterdam: Where It All Began
In his magnificent work, The Birth of Plenty - How the Prosperity of the Modern World Was Created, William Bernstein outlines the four necessary conditions
Tuesday, August 07, 2012
Knightmare on Wall Street
Question: Which of the following statements applies to last week's stock market behavior?
Monday, August 06, 2012
Pension-Gate Continues - Maryland has been Called Out
Index Funds Advisors, Inc. has repeatedly called attention to the scandalous waste of money on active management by state retirement systems.
Thursday, August 02, 2012
Caught Short! A Saga of Wailing Wall Street
Continuing with our series of blogs on books in the financial humor genre, we will take a quick look at Caught Short—A Saga of Wailing
Friday, July 27, 2012
Where are the Customers’ Yachts? or A Good Hard Look at Wall Street
Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party
Friday, July 27, 2012
The Greatest Hits of Investing
For more than a decade, I have had the privilege of hearing many colleagues discuss the fundamentals of investing in simple and effective ways.
Sunday, July 15, 2012
The Cost of Safety
Investors are now so risk averse they are willing to pay the government to look after their money; not a risk-free return, but a return-free risk.
Sunday, July 15, 2012
Pop Quiz
Question: The twenty-two prominent firms listed below share a common characteristic. What is it? AT&T Inc. Abbott Laboratories, Allstate Corp.
Thursday, July 12, 2012
Retirement Plan Shadows
The retirement plan industry is full of shadows. Turns out the retirement plan business has among the blackest, densest and least known of all.
Friday, June 29, 2012
Credit Ratings vs. Market Pricing
Dimensional takes advantage of the information embedded in prices, rather than relying on third parties rating services.
Thursday, June 28, 2012
A Busy Week in the World of High Finance
This is one of those weeks where we have so many juicy stories that I truly don’t know where to begin. How about another Madoff
Wednesday, June 27, 2012
Actively Managed Funds Continue to Lose Market Share
Recently, when I was browsing the Morningstar Website, I stumbled upon a video titled “What’s Driving Investors Away From Actively Managed Funds?” In the interview
Tuesday, June 26, 2012
Reaching for Yield: Junk and Other High-Risk Bonds
In this concluding article in the series exploring different ways investors might attempt to increase the income generated by their portfolios, we look at high-yield
Monday, June 25, 2012
Investing Anomalies
Investing is historically chock-full of strategies based on absurd anomalies. These include the January effect, the Super Bowl Indicator, the Harvard MBA Indicator, and “Sell
Monday, June 25, 2012
When Truth is Stranger than Fiction
Once in a while, when I need a topic to write about, I browse the latest press releases from the Securities and Exchange Commission (SEC).
Tuesday, June 19, 2012
"Index Funds" by Mark Hebner - A Gem
"Index Funds" - A Gem by Taylor Larimore Mark Hebner's updated "Index Funds" is a beautiful little book full of colorful pictures, complex charts
Tuesday, June 12, 2012
Index-Fund Investing: Revisiting a Piece of Investment History
In August of 1976, while everyone was dreading the potential epidemic of Legionnaires’ disease, Nobel Laureate Paul A. Samuelson wrote a now famous column in
Monday, June 04, 2012
Naked Short-Selling: Two Big Wall Street Firms Get Exposed
Normally, when you make a mistake, you choke down a slice of humble pie and life goes on. On rare occasion, however, there are mistakes
Tuesday, May 29, 2012
Book Collector
Book collector Farzam Khassian shares his thoughts on his hobby of collecting rare investment and financial books. He has collected more than 1,000 financial books
Thursday, May 24, 2012
IFA’s Concerns with IPOs
While some may accuse us of hindsight for writing this blog during the unfolding of the Facebook IPO debacle in which $12.8 billion of shareholder
Thursday, May 24, 2012
Sharing the Wealth: The Case for Equities
Quiz Question: What do these companies have in common: Whitbread of the United Kingdom, Molson Coors of North America, Qantas of Australia, Honda of Japan, and Adidas of Germany?
Wednesday, May 23, 2012
A Big Bang for 401(k) Plans?
Source: NASA On rare occasions, a change so profound and significant occurs in the financial world that it is given the “big bang” designation. Examples
Tuesday, May 22, 2012
Active vs. Passive: A Deeper Look into Fixed Income
“The only consistent data point we have observed over a five-year horizon is that a majority of active equity and bond managers in most categories
Tuesday, May 15, 2012
The Ewing Marion Kauffman Foundation Report on Venture Capital Funds: A Cautionary Tale
“We have met the enemy…and he is us.” So begins the 51-page report from the Kauffman Foundation, a $2 billion non-profit with a vision to
Wednesday, May 02, 2012
Mal-location of Capital
I used to play a lot of golf, probably far too much. When my friends would ask for advice, the number one question I would get is
Wednesday, May 02, 2012
Wall Street: the other Las Vegas
About a month ago, I wrote about Nicolas Darvas, a world famous dancer who claimed that he made $2 million in the stock market. This
Tuesday, May 01, 2012
Books of the Doomsday Genre: Read This before You Read One of Them
While we at Index Funds Advisors, Inc. do not dismiss the bleak scenario envisioned by the authors of books such as Aftershock or The Day
Sunday, April 29, 2012
The Road to Serfdom
The Road to Serfdom was written by Friedrich von Hayek in 1944. Friedrich von Hayek was a prominent Austrian economist during the twentieth century, and
Friday, April 20, 2012
Where's the Party?
The surge in stock prices around the world in the first quarter serves as a reminder that predicting market trends can be a frustrating business.
Thursday, April 19, 2012
Exchange-Traded Notes: We Hate to Say We Told You so, but….
Thursday, March 29, 2012
Betting vs. Investing: What We Can Learn from Mega Millions
Thursday, March 29, 2012
How I made $2,000,000 in the Stock Market
Thursday, March 22, 2012
Betting vs. Investing: What We Can Learn from March Madness
Betting vs. Investing: What We Can Learn from March Madness
Wednesday, March 21, 2012
Where the Money Grows
Where the Money Grows
Tuesday, March 20, 2012
MF Global and the Meaning of Chutzpah
MF Global and the Meaning of Chutzpah
Wednesday, March 14, 2012
Escaping From the Great Vampire Squid
Wednesday, March 14, 2012
Active vs. Passive: The View from Standard & Poors
Active vs. Passive: The View from Standard & Poors
Wednesday, March 14, 2012
Escaping from the Great Vampire Squid
Escaping from the Great Vampire Squid
Wednesday, March 14, 2012
An Investor Protection Plan
It is sickening to witness the fleecing of investors. If you are using a retail broker or relying on much of the financial media, you may be a victim.
Tuesday, March 13, 2012
Manager Picking is a Mug’s Game
The S&P Persistence Scorecard report on the performance of active funds has been issued, and for manager pickers, the results are not so encouraging.
Tuesday, February 28, 2012
The Sizzle or the Steak: Exotic Market-Linked CDs
FDIC insured market linked CDs may not be the toxic paper that collateralized debt obligations, subprime mortgages, and credit default swaps have been
Tuesday, February 28, 2012
Can You Pay an Active Manager to Beat the Market for You?
Our experiment will be Warren Buffett and his son, Howard Buffett, who has been designated as the future chairman of the board of Berkshire Hathaway.
Thursday, February 23, 2012
Who Has the Midas Touch?
In regard to gold and its investment merits, however, Buffett has had little to say—at least in the pages of his annual shareholder letter.
Thursday, February 23, 2012
A Stock-Picker's Market?
A reasonable question to ask is just how good of a stock-picker do you need to be to beat the index after covering your costs? See the chart below:
Tuesday, February 14, 2012
The End of Wall Street as We Know It—And We Feel Fine
The End of Wall Street as We Know It—And We Feel Fine
Tuesday, February 07, 2012
Tough Times for American Funds
Tough Times for American Funds
Monday, February 06, 2012
Paradox of Skill
Manager selection is a process that requires analyzing noisy performance data, so it should lean heavily on the notion of statistical significance.
Friday, February 03, 2012
Just How Skilled of a Manager-Picker Do You Need to Be?
Just How Skilled of a Manager-Picker Do You Need to Be?
Thursday, February 02, 2012
Morningstar's Manager of the Year: Luck or Skill?
Morningstar's Manager of the Year: Luck or Skill?
Tuesday, January 31, 2012
The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True
A review of Simon Lack's latest book, The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True, and link to adverse practices of Hedge Funds industry.
Monday, January 30, 2012
Two Contrasting Views of Stock Markets
Thursday, January 19, 2012
Hedge of Darkness
It's true. Big money can be made from hedge funds. If you run one, that is.
Wednesday, January 18, 2012
Problems with Private Equity Performance
IFA completed an analysis of state retirement pension plans which showed that all of them would have fared better with a portfolio of index funds.
Friday, January 13, 2012
Tilting Towards Small Cap Stocks: Is It Still Worthwhile?
Monday, January 09, 2012
2011 Review: Economy and Markets
Thursday, January 05, 2012
Two and Twenty: So how’s that working for you? The Underperformance of Hedge Funds
Tuesday, January 03, 2012
2011: The Year in Review
2011: The Year in Review
Wednesday, December 21, 2011
Stemming the Tide
"Those who advocate research on embryonic stem cells in the hope of achieving such a result make the grave mistake of denying the inalienable..."
Tuesday, December 20, 2011
Reaching for Yield: Preferred Stock
In this continuing series we look at preferred stock, a special equity security that has properties of both equity and debt instruments.
Sunday, December 11, 2011
Reaching for Yield: High-Yield Mortgage REITs
Reaching for Yield: High-Yield Mortgage REITs
Sunday, December 11, 2011
Hedge Funds on Edge
Hedge Funds on Edge
Wednesday, December 07, 2011
International Diversification: Is It Still Worthwhile?
International Diversification: Is It Still Worthwhile?
Tuesday, December 06, 2011
Reaching for Yield: High-Dividend Stocks
Reaching for Yield: High-Dividend Stocks
Thursday, December 01, 2011
Is There a Manager Risk Premium?
Is There a Manager Risk Premium?
Monday, November 28, 2011
What Does a Winning Streak Tell Us?
Bill Miller's departure from the Legg Mason Capital Management Value Trust adds a chapter to the debate regarding the value of active stock selection.
Tuesday, November 22, 2011
Index Funds Advisors, Inc’s Concerns with Muni Bonds
Index Funds Advisors, Inc’s Concerns with Muni Bonds
Monday, November 14, 2011
Fidelity Magellan's Alpha over Many Managers
Fidelity Magellan's Alpha over Many Manager
Sunday, October 30, 2011
Stock-Pickers and the Illusion of Validity
If you ask 1,000 stock-pickers for an explanation for why they chose to buy a particular stock, you are likely to get 1,000 different answers.
Tuesday, October 25, 2011
IFA’s Concerns with ETFs
IFA’s Concerns with ETFs
Wednesday, October 19, 2011
Pension Gate
Plan sponsors and trustees of investments such as retirement plans, foundations and endowments frequently implement an active investment strategy.
Wednesday, September 28, 2011
UBS: A Rotten Culture Inspires Rotten Actions
UBS: A Rotten Culture Inspires Rotten Actions
Monday, September 26, 2011
Warren Buffett, Market Efficiency and the Disappearance of Alpha
Warren Buffett, Market Efficiency and the Disappearance of Alpha
Thursday, September 22, 2011
Up and Down, Down and Up
Intense volatility can be very scary for investors, making them susceptible to acting on visceral emotions.
Sunday, September 18, 2011
Indexing: Is It Appropriate for All Asset Classes?
Using the Morningstar Direct database, IFA performed its own study of how actively managed funds have done vs. the passively managed DFA funds in categories outside of domestic large cap. The table below summarizes the results:
Wednesday, September 07, 2011
The Turn of the Tide
The Turn of the Tide
Monday, August 29, 2011
Leverage- A Good Idea or a Dangerous Risk?
Leverage amplifies market returns - when the market goes down, the amplification of the negative return creates a hurdle that is difficult to overcome
Thursday, July 21, 2011
The Never-Ending Pursuit of Alpha
Both stock-picking and hiring active managers to pick your stocks for you are mug’s games. Very few investors, if any, receive alpha consistently.
Tuesday, July 12, 2011
Constructing Portfolios: It’s all about the Factors
Index Funds Advisors constructs its portfolios based on the three-factor asset pricing model that Eugene Fama and Kenneth French introduced in 1993.
Monday, July 04, 2011
Non-Traded REITs: One More Way for Investors to Be Parted from Their Money
A real estate investment trust (REIT) is a security that trades like a stock on the major exchanges and invests in commercial real estate directly.
Sunday, June 26, 2011
Cognitive Biases and Their Impact on Investment Decision-Making
Here, we look at a couple of real-world examples of cognitive biases and relate them to investor behaviors that IFA has observed more than a few times
Sunday, June 19, 2011
Planning for Retirement? Take Off Those Rose-Colored Glasses!
An article in the Wall Street Journal shows the problem of people not having the finances that they need for retirement will be worse than expected.
Monday, June 06, 2011
IFA’s Concerns with Currency Speculation and Trading
Currency trading is just another type of speculation, and as we all know, the expected return of speculation is zero before costs and negative after.
Thursday, June 02, 2011
CALPERS Arizona Land Speculation: The Taxpayer’s Dollars Are Just Dust in the Wind
CALPERS bought land in Arizona with the hope that it'd be developed into a residential community. The land sold for only 8% of its purchasing price!
Tuesday, May 31, 2011
Wall Street Still Running Amok
IFA implores taxpayers to keep an eye on government officials entrusted with public funds and to help them steer clear of the sharks of Wall Street.
Thursday, May 26, 2011
Tactical Asset Allocation: The Market-Timing Wolf in Sheep's Clothing
Tactical Asset Allocation, or TAA, is simply market-timing but with only a set portion of the whole portfolio. It is IFA's position that TAA is futile
Thursday, May 26, 2011
The Use of Statistics in Making Investment Decisions
IFA relies on the scientific method of statistical analysis. The most important application of statistics lies in the realm of hypothesis testing.
Wednesday, May 25, 2011
Will the Manager You Picked Deliver Alpha or Have You Been Fooled by Randomness?
Investors should not waste their time seeking managers who supposedly deliver alpha, or returns above what can be explained by the assumption of risk.
Thursday, May 05, 2011
What's the Significance?
This statistical significance will be discussed in the context of what investors care about first and foremost—expected returns and risk premiums.
Sunday, January 09, 2011
Burton Malkiel on Tech | Ticker
Look at the performance of mutual funds over the last forty years: It’s clear that index funds like Vanguard’s have a huge advantage over other guys.
Wednesday, September 22, 2010
Father Robert J Spitzer on Fiduciaries
What led to the financial crisis in the us? Why did we get to the point of catastrophic collapse? Why is it that our financial institutions seem to have drifted into this ethical neutrality that led to the complete absence of truth trust and transparency?
Sunday, September 12, 2010
Option Theory Does Not Refute Time Diversification
Option Theory Does Not Refute Time Diversification
Sunday, September 12, 2010
The Pursuit of Alpha: A Useful Endeavor or a Fool's Errand?
Alpha takes the volatility (price risk) of a mutual fund (or any managed portfolio) and compares its risk-adjusted performance to a benchmark index.
Friday, September 03, 2010
Hawking’s Attack on God Draws Logical Response
The battle lines have been drawn on what promises to be the grand debate over Grand Design – Stephen Hawking’s latest work. In his book, Hawking directly fires at a cornerstone of faith — the need for a Creator of the universe. Sensitivity to this issue h
Thursday, July 29, 2010
Financial Regulatory Reform through the Eyes of Caritas in Veritate
Financial Regulatory Reform through the Eyes of Caritas in Veritate
Saturday, July 24, 2010
Mary Brunson on KRLA Part 1
Mary Brunson discusses the screening methodology used to create the Investing for Catholic Index Portfolios.
Saturday, July 24, 2010
Mary Brunson on KRLA Part 2
Mary Brunson discusses the mission the United States Conference for Catholic Bishops has encouraged her to undertake.
Wednesday, June 02, 2010
Investors Demanding Social Justice
The ICCR doesn’t accept that doing good and doing well have to be mutually exclusive at American companies, recent experience notwithstanding. If ever the corporate world could use a healthy infusion of responsibility, this would seem to be the time.
Thursday, May 27, 2010
Eugene Fama on CNBC's Squawk Box
The Father of Modern Finance talks with CNBC's Squawk Box.
Tuesday, April 27, 2010
Father Finn on a Clear Path in the Fight for Transparency
The battle lines have been drawn all over the financial world: Wall Street vs. the government, Main Street vs. Wall Street, Main Street vs. Wall Street AND the government…
Sunday, April 25, 2010
Vatican Radio Interviews Fr. Seamus Finn, OMI Interviewed on Bringing Faith Values to the Financial Sector
Putting faith principles back into the world of finance and business is not usually the business of priests, but it is for Oblate Seamus Finn, Director of the Justice, Peace/Integrity of Creation Office of the Missionary Oblates of Mary Immaculate in Washi
Sunday, April 25, 2010
Bank of America is 2nd Major U.S. Financial Institution to Face Derivatives Proxy Vote By Shareholders
The verdict at BofA’s Wednesday Annual Meeting comes on the heels of a huge 30 percent support at Citigroup on the same Resolution. Of the four derivatives disclosure resolutions being filed, that with BofA may be the most telling, considering how the mish
Tuesday, April 20, 2010
Heeding the Call for Ethical Investment Strategies
Heeding the Call for Ethical Investment Strategies
Thursday, April 15, 2010
Shareholders: Treasury Should Be Consistent On Capitol Hill And On Wall Street By Voting Citi Shares For More Derivatives Disclosure
Major Citigroup Shareholder Meeting Vote Tuesday Gives U.S. Chance to be Consistent on Derivatives/Financial Reform; U.S. is Biggest Cit Shareholder With 27% Stake.
Thursday, April 01, 2010
JPMorgan, Citigroup Resist Nuns' Proposal on Swaps Disclosure
April 2 (Bloomberg) -- Goldman Sachs Group Inc. and JPMorgan Chase & Co. aren’t doing “God’s work” when it comes to derivatives, according to investor groups of nuns and priests.
Thursday, April 01, 2010
JPMorgan, Citigroup Resist Nuns’ Proposal on Swaps Disclosure
Goldman Sachs Group Inc. and JPMorgan Chase & Co. aren’t doing “God’s work” when it comes to derivatives, according to investor groups of nuns and priests.
Wednesday, March 24, 2010
DMFC SRI Presentation
Investing for Catholics Presentation
Sunday, February 28, 2010
Haiti : Vatican Radio Interview
S�amus Finn, OMI – talks about the situation in Haiti and re-development needs of the devastated country.
Monday, February 08, 2010
Father S�amus Finn Radio Interview - February 9th 2010
.mp3 Audio from radio interview
Monday, February 01, 2010
St. Paul and the Principles of Right Economic Order
Video of St. Paul and the Principles of Right Economic Order
Saturday, January 30, 2010
Are You an Active Investor?
The first step on the index funds journey is to recognize active investor behavior. If all investors were lined up in a row, could the active investors be identified? Active investors actively engage in stock picking, time picking (market timing), manager
Monday, January 18, 2010
Catholic Investing Effort Taps Top-Level Expert
Investing for Catholics today announced the addition of Father S�amus Finn, OMI as a consultant to the firm. Father Finn is the Director of Justice, Peace and the Integrity of Creation for the Missionary Oblates of Mary Immaculate. He has been selected by
Sunday, December 13, 2009
The crib is where we can learn the secret of true joy
"The crib is a school of life where we can learn the secret of true joy," which doesnt mean having many things, but signifies being loved by God, by giving to others for others and love one another.
Sunday, December 13, 2009
A Tribute to David Booth
Mr. David Booth’s $300 million gift to his alma-mater has to be a milestone in the annals of finance, economics and investments. University of Chicago’s announcement that its business school was being renamed Chicago-Booth.
Monday, November 30, 2009
To beat index funds, luck is your only hope
Investors who continue to send money to actively managed mutual funds in the hope that managers will be able to beat less-costly index funds are going to lose out almost all of the time, a new study finds.
Sunday, November 08, 2009
Ethical Business Decisions: Pope Benedict’s Blueprint for Economic Justice
On Nov. 8, Supreme Knight Carl Anderson gave the following address to a gathering of business leaders and professionals at Fairfield University. His keynote presentation was centered on the recent social encyclical by Pope Benedict XVI, Caritas in Veritate
Tuesday, October 27, 2009
Harry M. Markowitz explains Portfolio Theory
what it is and how it's used from a top-down model from the asset classes to the investments. He covers Standard Deviation, Variance, Correlation, and Covariance. Markowitz also explains what happened in 2008 with Modern Portfolio Theory.
Friday, October 02, 2009
Mark T. Hebner - Big Losses, Big Government and Your Investments
Mark T. Hebner covers historic recovery patterns and probability of future returns, the risks and returns that come with big government, the role of commodities in your investments, the pros and cons of inflation-hedging securities, and an investment strat
Thursday, September 03, 2009
IFA's Position Statement on Investing
Mark Hebner describes IFA's Position on Investing
Friday, July 03, 2009
The Signers of the Declaration of Independence
Sunday, June 28, 2009
CARITAS IN VERITATE
TO THE BISHOPS PRIESTS AND DEACONS MEN AND WOMEN RELIGIOUS THE LAY FAITHFUL AND ALL PEOPLE OF GOOD WILL ON INTEGRAL HUMAN DEVELOPMENT IN CHARITY AND TRUTH
Monday, April 20, 2009
Harry Markowitz - Portfolio Theory Vs. Financial Engineering, and Their Roles in Financial Crises
Harry Markowitz gives an IFA Exclusive Presentation on Portfolio Theory Vs. Financial Engineering, and Their Roles in Financial Crises. Markowitz explains the difference between Portfolio Theory and Financial Engineering. Markowitz also covers Black Monday
Monday, April 06, 2009
Clarion Call
When returns are poor (and sometimes even when they're good), investors wonder if things have changed. Is this time different? Does a buy-and-hold strategy still make sense?
Thursday, April 02, 2009
IFA's Quote of the Week - 52 (Fred Schwed Jr.)
“Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor. He said, ‘Look, those
Thursday, March 26, 2009
IFA's Quote of the Week - 51 (Mark Hebner)
"Important services such as rebalancing, tax managed investments and tax loss harvesting help investors maximize returns at a given level of risk."
Tuesday, March 24, 2009
Testing Market Efficiency
A simple test determining whether or not the market does a good job of setting prices.
Wednesday, March 18, 2009
IFA's Quote of the Week - 50 (Warren Buffett)
"You only find out who is swimming naked when the tide goes out."
Sunday, March 08, 2009
The Resilience of Capitalism: Part II
Now that February 2009 numbers are in, I wanted to update my discussion about this very challenging investment environment over the last 16 months and offer some much-needed perspectives. I am sympathetic to your concerns and want to help you through this
Thursday, March 05, 2009
IFA's Quote of the Week - 49 (Michael Edesess)
"Let’s change our verb tenses when speaking of investment markets."
Thursday, February 26, 2009
IFA's Quote of the Week - 48 (Mark Hulbert)
"It is very hard, if not impossible," he wrote in his study, "to justify active management for most individual, taxable investors, if their goal is to grow wealth."
Friday, February 20, 2009
The Invisible Hand and Why Prices Change
The Hebner model attempts to simplify free market forces into 3 simple variables: Price, Expected Return and Uncertainty. In short, prices move in the opposite direction of uncertainty so that expected returns can remain constant.
Sunday, February 08, 2009
IFA's Quote of the Week - 47 (Charles Ellis)
In his book Index Funds: The 12-Step Program for Active Investors, Mark Hebner identifies that 85% of investors are active investors. This means that a majority of investors handle their investments in one or more of the following ways:
Wednesday, January 21, 2009
Active vs. Passive Investing
The debate between active vs. passive investing has dragged on for more than 40 years; certainly far longer than necessary as reams of academic research continue to reveal the failure of active management to outperform a passively managed and properly sele
Monday, January 12, 2009
Index Funds Advisors, Inc. Interview with Harry M. Markowitz
Index Funds Advisors, Inc. Video Interview with Harry M. Markowitz - 1990 Nobel Prize Winner and the Father of Modern Portfolio Theory
Sunday, January 11, 2009
IFA's Quote of the Week - 46 (John C. Bogle)
"We need a mutual fund industry with both vision and values; a vision of fiduciary duty and shareholder service, and values rooted in the proven principles of long-term investing and of trusteeship that demands integrity in serving our clients."
Thursday, January 01, 2009
IFA's Quote of the Week - 45 (Peter Cohan)
"Why didn't I just throw my money out of the window - and light it on fire?"
Sunday, December 21, 2008
IFA's Quote of the Week - 44 (Burton Malkiel)
"It's like giving up a belief in Santa Claus."
Tuesday, December 16, 2008
Mark Hebner's Response to Madoff's Mayhem
Like so many of you, I have watched in great dismay as the horrific details unfold regarding the Bernard Madoff investment scam—one that has quickly shaped up to be the biggest such scam in history.
Thursday, December 11, 2008
IFA's Quote of the Week - 43 (The Financial Press)
"The $50 billion allegedly lost to investors would make Madoff's fund one of the biggest frauds in history."
Tuesday, December 09, 2008
Eugene Fama, Jr. on Efficient Markets
Index Funds Advisors, Inc. Video Interview with Eugene Fama Jr.
Tuesday, December 09, 2008
The Resilience of Capitalism
As a general rule of thumb, the equity allocation of your portfolio should have an approximate time horizon or holding period of 7 to 10 years. This would indicate that you should have an allocation of fixed income that will meet your withdrawal needs for
Thursday, December 04, 2008
IFA's Quote of the Week - 42 (Franklin D. Roosevelt)
“The only thing we have to fear is fear itself.”
Tuesday, November 25, 2008
IFA's Quote of the Week - 41 (David G. Booth)
"You've already paid for the risk, so it might be good to stick around for the expected return."
Monday, November 17, 2008
IFA's Quote of the Week - 40 (William Bernstein)
"No one in his right mind would walk into the cockpit of an airplane and try to fly it, or into an operating theater and open a belly. And yet they think nothing of managing their retirement assets. I’ve done all three, and I’m here to tell you that mana
Sunday, November 02, 2008
IFA's Quote of the Week - 39 (Marlena I. Lee)
"Return generation is the responsibility of the market, which sets prices to compensate investors for the risks they bear. "
Wednesday, October 22, 2008
What to do about the Financial Transparency Crisis
The current financial crisis is a combination of three ill winds that combined to make the “perfect” storm. One ill wind is the bursting of the real estate bubble; the second is the ongoing consequences of the subprime and near-subprime mortgage fiasco;
Sunday, October 19, 2008
IFA's Quote of the Week - 38 (Mark T. Hebner)
"Investing in the absence of an investment policy statement reduces decision making to an individual event-driven process of chasing short-term results, eliminating the expectation of achieving the long-term returns of capitalism."
Wednesday, October 08, 2008
To Optimize or Not Optimize
One question that clients sometimes ask is, “Are IFA’s portfolios optimized?” It’s a fair question. That word “optimization” is thrown around somewhat loosely, and it certainly sounds like a good thing.
Sunday, October 05, 2008
IFA's Quote of the Week - 37 (Harry Markowitz)
"To reduce risk it is necessary to avoid a portfolio whose securities are all highly correlated with each other. One hundred securities whose returns rise and fall in near unison afford little protection than the uncertain return of a single security."
Thursday, September 25, 2008
IFA's Quote of the Week - 36 (Mark T. Hebner)
"It is a certainty that equity markets will be full of uncertainty. This uncertainty is the reason investors should expect returns."
Tuesday, September 16, 2008
IFA's Quote of the Week - 35 (Jeremy J. Siegel)
"The current financial crisis calls out for new products and services as well as more, not less, information about what is safe and profitable in the future environment."
Thursday, September 11, 2008
IFA's Quote of the Week - 34 (Michael C. Keenan)
"Fiduciaries should strongly consider index funds as an alternative to actively managed funds. Index funds incur about 80% less in transaction costs than actively managed funds…long-term returns for actively managed funds trail their respective indexes."
Thursday, September 04, 2008
IFA's Quote of the Week - 33 (Matt Krantz)
"Remember when you buy a commodity, you're not buying something that generates earnings and profit. You're buying a hard asset and hoping another buyer will be willing to pay more for that asset in the future."
Thursday, August 28, 2008
IFA's Quote of the Week - 32 (Benjamin Graham)
"The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage."
Sunday, August 17, 2008
IFA's Quote of the Week - 31 (Kermit the Frog)
"It's not easy bein' green."
Sunday, August 10, 2008
IFA's Quote of the Week - 30 (Bill Miller)
“It seemed like we needed a 12-step program to cure us of our addiction to buying beaten-up stocks..."
Thursday, July 31, 2008
IFA's Quote of the Week - 29 (Benjamin Graham)
"The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenienc
Thursday, July 24, 2008
IFA's Quote of the Week - 28 (James Pardoe)
"Let other people overreact to the market...if you can stay cool while those around you are panicking, you can surely prevail."
Thursday, July 24, 2008
IFA's Quote of the Week - 27 (John Lennon)
"Nobody told me there’d be days like these."
Sunday, June 29, 2008
IFA's Quote of the Week - 25 (William F. Sharpe)
"Some investments do have higher expected returns than others. Which ones? Well, by and large they’re the ones that will do the worst in bad times."
Thursday, June 19, 2008
IFA's Quote of the Week - 24 (Truman A. Clark)
"Investors acquiring commodity futures in expectations of higher returns, lower risk, and improved inflation protection are making bets. Current evidence indicates that the odds are against them."
Wednesday, June 11, 2008
IFA's Quote of the Week - 23 (Richard C. Green)
"For a long career full of breakthroughs that have advanced our understanding of financial markets, and his early fundamental work on efficient markets, we are proud to have Professor Fama as the first recipient of this prestigious award."
Tuesday, June 03, 2008
IFA's Quote of the Week - 22 (Harry Markowitz)
"A good portfolio is more than a long list of good stocks and bonds. It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of contingencies."
Monday, May 26, 2008
IFA's Quote of the Week - 21 (Rex Sinquefield)
"So who still believes markets don't work? Apparently it is only the North Koreans, the Cubans and the active managers."