Active Management’s Surprising Survival
While this article does get a little into the technical side of investing this month, its theme is at the core of our philosophy at Waypoint so we think it’s a good reminder to investors and clients. It involves the idea (myth, really) that investors can consistently create “alpha” or out-performance by making changes to their investments (or hiring someone to do so) based on their current opinion with where we are economically or politically or historically. Recently, our Director of Research with the BAM Alliance Larry Swedroe wrote (again) about the truths and myths of “active” investment management and the attempt to outperform:
It’s truly an amazing paradox. According to the Thomson Reuters Lipper second-quarter 2018 snapshot of U.S. mutual funds and exchange-traded products, active funds of all kinds, including money market funds, manage about $16.4 trillion.
That’s more than 2 1/2 times the $6 trillion managed by passive funds and ETFs. That’s also despite the overwhelming evidence that active management is a loser’s game (one that’s possible to win, but with odds of doing so that are so poor, the winning strategy is not to play). > SEE MORE
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The BAM Alliance
Using Factors To Lower Risk
Many investors today are confronting what could be considered a “perfect storm” that is creating strong head winds against the pursuit of higher expected returns. So far, we have discussed the main factors currently working against investors, as well as some steps they might consider taking to help combat this problem. > SEE MORE
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The BAM Alliance
Genes, Experience Affect Choices
Are you a value investor or a growth investor? Could your preference be influenced by a biological predisposition partially ingrained from birth? Is it possible that your choice of investment could be explained by your personal experiences, both early on and later in life? > SEE MORE
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The BAM Alliance
For True Freedom, Learn to Deal With Uncertainty
Almost 10 years ago, I knew a guy on a financial rocket ship. He had a great house, a successful business and a solid income.
But then things changed. With the benefit of hindsight, it was clear he bought a little too much house and spent a little too much money. At the beginning, he was rewarded for buying the house. Its value went up a lot in a short time. For context, imagine Florida, Arizona or Las Vegas in 2006-7. Houses were selling even before hitting the official market and for way more than the asking price. > SEE MORE
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The BAM Alliance
The 10 Most Important Things to Help Ensure Your Family’s Wealth and Well-Being
Several lifetimes ago, when I was a newly minted wealth advisor, I would often begin planning conversations by listing all the many ways that comprehensive money management could help families find personal excellence in their busy lives. Fortunately for all concerned, I soon realized that, in my enthusiasm to impart everything there was to know, I was sharing too much information in too short a time for it to have lasting value. > SEE MORE
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