Out of sight, out of mind: At least that seems to be the case when it comes to mutual fund investors and their costs of investing. Mutual fund buyers seem to have become very educated about visible sales commissions in recent years. However, they still don’t seem to pay attention to high, but hidden, operating expenses, a trio of finance […]
How mutual fund companies bury their mistakes
The mutual fund industry has an open secret: each year it buries hundreds of funds that couldn’t make it. Some of these funds were small unknowns while others were yesterday’s popularity club winners, unable to repeat their success in changing markets. Remember Munder funds and Amerindo funds, two big technology and Internet stock investors of the late 1990s? Well, only […]
Client Letter – Q1 2003
War in the Middle East, a depressed economy at home, a three-year bear market: what should investors do in these highly uncertain times? Some investors jump out of stocks and head for the “safety” of fixed income investments or temporarily stop making investment purchases. Others hang on to their investments but agonize over fears of capital loss. These are probably […]
Do the stars hold the key to the stock market?
A large body of academic investment research indicates that technical stock market analysis has about as much credibility as astrology. Technical analysts use graphs and charts of prices and trading volume to make predictions about individual stocks, industry sectors, and the stock market itself. Although technical analysis is still widely practiced on Wall Street, academic research says the method rests […]
Passive investing works with small stocks too
Many professional investors and academic researchers have long believed that little is better when it comes to stock size. Research has shown that the smallest stocks tend to beat their larger brethren on a long-term basis. Although the reason for higher small stock returns has not been definitively established, some researchers believe higher returns are compensation for the extra risk […]
Bush Proposes New Savings Plans
President Bush has proposed sweeping changes in taxation of retirement and other savings. If enacted, his proposals could profoundly affect the way Americans save. It could also lead to major federal and state budget deficits in the future. The proposal is far more important to most working and retired Americans than is the proposed elimination of dividend taxation. Bush’s plan […]
New market definitions
Bad times usually bring out gallows humor, and the recent bear market was no exception. Various versions of funny Wall Street definitions have appeared on the Internet and in print publications. Here are a few: Market correction: The day after you buy stocks. Broker: What your broker has made you. Standard & Poor: Your life in a nutshell. Value investing: The art of buying […]
Best and worst months
Conventional wisdom pegs October as the worst month of the year for the stock market. It was in that month that the crashes of 1929 and 1987 occurred. But that wisdom is wrong: September has proved to be the worst month of the year, with the worst record over the past 50 years. The Standard & Poor’s 500 Index has […]
Don’t blow a big opportunity offered by the bear
Your portfolio has endured one of the worst bear markets of the last 100 years. As bad as things seem, investors may have been handed a once-in-a-lifetime opportunity. They shouldn’t blow it by becoming fixated on what’s happened to them. Unfortunately, investors frequently focus on what they paid for an investment, and fluctuations up or down from that initial price […]
Client Letter – Q4 2002
I hope that you enjoyed the holiday season! In order to start this year on a positive note, I thought that it might help if we look at 2002 with the proper perspective. The chart below shows annualized investment returns for the major asset classes over three periods—one year, five years, and ten years (all of which end December 31, […]
