Periodically during a presidential election cycle, we receive questions from clients about the desirability or wisdom of altering the composition of a portfolio based on what might unfold after the election. Dimensional Fund Advisors recently published an excellent new article addressing this topic titled, “Presidential Elections and the Stock Market.” In this article, Dimensional finds that historically, volatility and returns are not noticeably different based on which political party is ... [Continue Reading]
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“If you can predict the future, you shouldn’t worry about being diversified” – Greg Carlson, CCM CEO and Co-Founder Diversification has many benefits for investors when utilized appropriately. A diversified portfolio can have lower volatility, higher returns and increase the probability of a successful retirement. Because portfolio diversification is so universally accepted and often coined as ‘the only free lunch in investing,’ people frequently assume that it will only have a positive ... [Continue Reading]
Warren Buffett’s famous bet in 2007 that a low cost S&P 500 index fund would outperform a group of five prominent hedge fund managers is nearing its end. Without a sudden change in fortune, the low cost index fund is set to more than double the returns generated by the group of hedge fund managers. As noted by Money Talk News founder, Stacy Johnson, in Karla Bowsher's article “3 Lessons From Buffett’s Million-Dollar Wager,” this bet is simply another reminder of how difficult it is to beat ... [Continue Reading]
Global Gross Domestic Product (GDP) growth has stagnated since the financial crisis in 2008, and here in the U.S. this economic recovery has been the slowest since World War II. GDP growth in the United States has averaged just 2.1% since the beginning of 2009, well below the 3.2% average over the past 70 years. Potential reasons for this slow growth are numerous; debt deleveraging, low capital spending by corporations, central bank market manipulation, etc. While the list of potential reasons ... [Continue Reading]
This week we’d like to recommend Charles Ellis’ interview with Consuelo Mack on wealthtrack.com. Charles Ellis has had a long and prestigious career in the investment management industry. In addition to founding and managing his consulting firm, Greenwich Associates, Mr. Ellis served as a trustee for the Yale Endowment, was on the board of directors for the Harvard Business School and worked as a director for the Vanguard Group. Mr. Ellis has authored several best-selling books throughout his ... [Continue Reading]