Category Archives: Uncategorized

History of the 401(k)

Thirty-nine years ago, the Revenue Act of 1978 was signed, adding section 401(k) to the Internal Revenue Code and creating the first US defined contribution plans. While the code itself simply described a provision under which employees would not be taxed on the portion of income they chose to receive as deferred compensation, it ushered Read more […]

The Wind Bloweth Where It Listeth…

In the latest quarterly rebalance (effective at market close on May 19, 2017), the S&P 500 Low Volatility Index added more weight from the technology sector. The jump from 7% to 12% is the largest increase for any sector. Meanwhile, the index continued to shed weight in Consumer Staples and Utilities, historically the stalwarts of Read more […]

100 Days Later in Mexico

100 days…is it a milestone?  Is it a key number?  I’m not sure, but everybody looks like they love to write about it, so I will too.  What I know is in Mexico we have a saying that goes, “If the U.S. sneezes, Mexico gets a cold.”  Following Dennis Badlyans’s post “Does the Outperformance of Read more […]

15 Years of SPIVA – Where Does the Active Versus Passive Debate Go From Here?

In the inaugural publication of the Journal of Portfolio Management in 1974, Nobel Laureate Paul Samuelson wrote that there is no “brute fact” that “there could exist a subset of decision makers in the market capable of doing better than the averages on a repeatable, sustainable basis.”[1]  That article partly inspired John Bogle to launch Read more […]

Skewered

When an investor buys a stock her largest possible loss is the money invested while the gain is unlimited.  Most investors avoid losing their entire investment, few investors make as much as they hoped. One result of this favorable bias is that the distribution of stock returns is usually skewed to the right. The sketch Read more […]

Security Selection & Sector Allocation Effects of Equal Weighting the S&P 500®

Constituents of the S&P 500 Equal Weight (EW) and S&P 500 are identical, but the EW version is rebalanced quarterly so that every company has equal representation after the rebalance.  That often results in significantly different performance between the two indices, because equal weighting gives more representation to smaller stocks and alters the distribution of Read more […]

How Much Is Your Social Security Benefit Worth?

Social Security benefits are the gold standard of retirement income.  As Nobel Laureate Robert Merton commented in his article “The Crisis in Retirement Planning,” published in the Harvard Business Review (July/August 2014): “Ask someone what her pension is worth and she will reply with an income figure: ‘two-thirds of my final salary,’ for example.  Similarly, Read more […]

Alaska Healthcare Profiled

According to an April 6, 2017, CNN story titled “High-cost Alaska sits in the eye of health care reform storm,” Alaska currently has the highest healthcare costs of any U.S. state.[1]  In this first profile edition, we look at the state of Alaska and compare just how different the cost profile is for people living Read more […]

Rieger Report: Why foreign investors like U.S. municipal bonds

A trend that has been catching attention is purchases of U.S. municipal bonds by foreign investors.  A terrific summary was recently published by VanEck’s Michael Cohick and that can be found by clicking here. As that research points out, the Federal Reserve data on foreign investor holdings has jumped to end 2016 at $106 billion.  That Read more […]

Rising Rates Arrive

Which of the figures below belong together?   It’s obvious, even if analogies aren’t your strong suit, that A is like C and B is like D.  A and C are not like B and D. The economic relevance of this simple visual exercise is this: At its March 2017 meeting, the Federal Open Market Read more […]