Understanding how markets function is critical when making investment decisions. This is why Hendrick Bessembinder’s 2018 study of historical stock returns was so important; it revealed to investors that the vast majority of individual stocks underperform. This information is critical. It helps us better understand why active stock-picking managers underperform at such a high frequency, and it gives us a deeper understanding of the importance of portfolio diversification--not just to mitigate ... [Continue Reading]
Articles and resources related to Diversification.
March 9, 2009, is an important day in our shared history. We didn’t necessarily know it at the time as it took a few months for the significance of the day to reveal itself, but it was on this date when the financial markets hit rock bottom during the Global Financial Crisis (GFC). From that day forward the markets stopped their painful retreat and began to recover. That was ten years ago now, and as we reflect on those ten years, of course there are countless learnings and insights that could ... [Continue Reading]
As we all observed and experienced, the close of 2018 brought an unsettling time in the equity markets. Markets historically don’t respond favorably to uncertainty, be it financial, political or social, and recent volatility appears to be tied to a host of uncertainties. Many individual investors react to uncertainty based on emotion, even though we’ve seen throughout the history of the market how important it is that investors don’t allow emotion to influence decisions. Throughout recent market ... [Continue Reading]
There’s a classic line in the 1987 movie “Wall Street,” where Michael Douglas’ character Gordon Gekko states, “lunch is for wimps.” The implication is that in the business of money management, there’s no time to waste, certainly not for something as trivial as lunch. With only so many hours in the workday and a never-ending stream of new information to digest, the idea is that analysts and portfolio managers must spend every waking minute trying to gain an edge. This narrative is powerful, and ... [Continue Reading]
Although it may not be immediately apparent depending on where you’re reading this, much of the world is currently engrossed in the World Cup. The 2018 FIFA World Cup (including 64 total matches) is being hosted in cities throughout Russia, with the championship match to be played on July 15th. The largest tournament of the world’s most popular sport often takes over the lives of its fans – typically ranking as the most watched global event every four years. As a frame of reference, while the ... [Continue Reading]