Tempted to Trust Your Gut? – Another Reason to Commit to a Disciplined Strategy
“The three worst words of stock market advice: Trust Your Gut.” That was the headline of a recent article by Jason Zweig in The Wall Street Journal, reporting on a new academic study. Dr. Robert Shiller of Yale, who won the Nobel Prize in economics in 2013, has been surveying investors about their expectations since […]
When Stock Pickers Stop Picking Stocks
Many investors pay high fees for actively managed funds. Traditionally with these funds, an investor pays the “manager” of the fund to select investments that they believe will outperform the market. This, in turn, should give the investor a higher return than the market produces. Although many expect a higher rate of return, evidence shows […]
Tax Efficiency: Index Funds vs. Actively Managed Funds
Tax season is in full swing, which may bring up many questions and considerations about your investments. Am I saving in the most tax-efficient locations for my financial situation? Are my individual investments tax-efficient as well? A recent article by Vanguard discusses how broadly based index funds are more tax-efficient than actively managed funds. Rockbridge […]
Market Commentary January 2016
Stock Markets In 2015, domestic large cap stocks (S&P 500) and REITs were up while other markets were down – emerging markets were off big! The positive results in the S&P 500 were driven by just two stocks – Amazon and Google. Otherwise it would have looked like other market indices. These results, I think, […]
The Problem With Diversification – Emerging Markets
One of the tenets of successful long-term investing is the practice of portfolio diversification. Through diversification, investors can increase their expected long-term return for a given level of risk (volatility). This is accomplished by investing in assets that are not perfectly correlated to one another, but each asset individually has a positive expected return. This […]
Investing and Action Movies
When we go to a good action flick, we enjoy the suspense and surprises, but no one wants that experience when investing. James Bond and Mission Impossible would not be box office hits without some interesting plot twists, and an occasional victory by the villain, and yet the end result is usually something we expect […]
The Devil’s Financial Dictionary
There is an endless amount of terminology that surrounds the finance and investment industries. It can certainly be confusing to the average investor, and may be responsible for some uncertainty when it comes to how to invest and which advisor to trust. The Devil’s Financial Dictionary is a book that has recently been released by […]
Market Commentary October 2015
Stock Markets The chart to the right shows what we have had to put up with recently: all but REITs were down for the quarter (all were down since the beginning of the year), and emerging markets were downbig, showing variability over the trailing twelve months. These periods remind us that markets do go down, […]
Portfolio Versus Benchmark Returns
Measuring investment performance without a benchmark is like judging the results of a football game when you only know one team’s score. To get the real story, there must be a “measuring stick.” Obviously, in football you also need to know the opponent’s score. In the case of investment performance, results should be compared to […]
Patience and Perspective
No one likes to see their savings decline in value. Times like these are not much fun for investors, watching markets “correct” in the face of abundant global uncertainties. As investment advisors, one of our most important jobs is to help long-term investors keep hold of their long-term perspective. Here are some things to consider. […]