All else being equal, someone new to investing would likely think that the smarter you are, the more success you would have in investing. The ability to gather, extrapolate, analyze, vet and measure information and data better than the next person certainly gives you a demonstrable edge that manifests in better investments returns. Right? The Wall Street Journal recently highlighted a hedge fund manager who once managed the investments for Harvard University’s multi-billion dollar endowment. Some of the smartest people in the world, working at Harvard, chose one of the smartest investors in the world, Jack Meyer, to manage the …
An Article Worth Reading
Data is the backbone of the “Evidence Based” investment approach, to which we fully subscribe. In its raw form, data is tedious and not much fun to read about. But the Wall Street Journal recently produced an article summarizing an important study in which the data ends the debate between our investment approach versus its antithesis, the “Wall Street” approach (i.e. based on making predictions and timing the market). After all, data is evidence. Regarding our investment approach, if the evidence said otherwise, we would do otherwise. But the evidence says that costs matter, making predictions doesn’t work, and it’s …
Risk Doesn’t Equal Reward…Unless You Have Patience
The saying “Risk equals reward” is incomplete on its own. For example, were you to say, “Risk equals reward, but not all risks are rewarded”, you’d be correct (that’s a topic for another time). Similarly, as the title of this post suggests, there’s a time factor involved in the reward side of this simple equation. We’d say, “Risk equals reward. You just have to wait for it.” How long? You never know. And therein lies the risk. While we’ve recently hit new highs, the road to these levels has been peppered with stretches of no growth, or no reward for …
We’ve Hit All-Time Highs…Now What?
An answer, in one chart We’ve fielded a few calls recently from clients, who’ve asked if any changes should be made now that we’ve hit new highs in the US indices. Like any answer, we defer to the data and evidence. What does the evidence says happens after we hit new highs? The answer… …is business as usual. This chart tells us that the markets are higher a year after a new high 80.5% of the time, about the same frequency as any other time – even a little more often, though not statistically significant. A market peak, therefore, tells …