Starting on Friday, February 2, and continuing on the following Monday, global equity markets sustained their largest correction in more than two years. While small in historical context, this correction was a rude awakening for many investors who had grown comfortable with the unusual stability in the stock market throughout 2017. Some investors did more than just grow comfortable, they started betting on this stability to continue, in the form of shorting volatility. These bets, which ... [Continue Reading]
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The Dow Jones Industrial Average had its largest decline in history on Monday, February 5--dropping 1,175 points! The headlines practically wrote themselves and were too exciting not to print. This was the largest single day decline in history, as long as we’re measuring in points and not percentages. By that measurement, Monday's drop wasn’t even the biggest decline in this decade. In addition, the 4.6% slide wasn’t significant enough to register within the top 20 daily declines and, of course, ... [Continue Reading]
Facebook, Amazon, Apple, Netflix and Google collectively form the acronym FAANG. You may have heard about this group of stocks in the media recently as they’ve outperformed the market significantly this year. Should you therefore be changing your portfolio allocation to gain more exposure to these companies? That’s the question addressed by Jim Parker, a Vice President at Dimensional, in today’s recommended reading article "Catchphrase Investing." ... [Continue Reading]
From 1926 to 2016, the average annual return for the S&P 500 index was 10.2%. A statistic like this shapes the way we set expectations for future returns for our own portfolios, but without having the right perspective we might be setting ourselves up for disappointment. For example, over that 91 year period how often do you think the S&P 500 produced returns within the range of 8% to 12%? You might be surprised to learn that this was only achieved six times over this period. In the ... [Continue Reading]
At the end of September, another hedge fund titan called it quits, continuing a trend since the global financial crisis began in 2008. Whitney Tilson, a well-known name on Wall Street, announced the closure of Kase Capital Management because in his own words, “Reporting sustained underperformance…was making me miserable.” Just ten years ago, Tilson was one of the hottest names in the hedge fund arena, having outperformed the S&P 500 by more than 100% since his fund opened its doors in the ... [Continue Reading]