Tag Archives: benchmarks

Oct 2, 2017

Avoid Unintended Stock Market Bets by Understanding Benchmarks

In a recent Financial Planning article,[1] Craig Israelsen advocated using stock market size segments to construct portfolios rather than a total market approach.  His conclusion may be perfectly valid for market participants willing and able to bear greater small-stock exposure, but his analysis fails to adequately take account of this source of risk.  He compared…

READ

Jun 19, 2014

Even Worse Than You Think

It’s commonly recognized that the average active manager underperforms the market. There are good theoretical reasons why this should be true, and ample empirical evidence that it is true. On average during the last ten years, e.g., 59% of large-cap U.S. equity managers lagged the S&P 500, with comparably poor results for mid- and small-cap…

READ

Jun 12, 2014

The Power of Blind Luck

This is a story about the power of randomness, and its application to investing. A good few years ago, I had the pleasure of meeting Bob “The Rock” Cooper. Bob, an otherwise unassuming sales manager from London, had just won the world championship in the princely sport of “Rock Paper Scissors”. Yes, there is such a…

READ

Jul 16, 2013

What’s in a Name

Picking the right ETF among the hundreds that are currently available is certainly a formidable task for many investors – one that has been made more difficult by iShares recent announcement that it is removing index names from a number of its ETFs. Why should this raise concerns for investors and for the financial industry…

READ


Sign up to receive Indexology® Blog email updates