In researching financial markets, investment trends and investor behavior, we leave no stone unturned to bring you a thoughtful, well-informed point of view.

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THE SUM


Knowledge + care + discipline bring you peace of mind


Click the links below to read more—and please let us know what you think.

The Borrowers

Most people think investing is all about money, but actually, it is more about time. What is investing, after all, but the shifting of consumption through the years?

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Annual Chart Through 2017

Below is our annual listing of different asset returns (large U.S. stocks, small U.S. stocks, foreign stocks and U.S. bonds) with a box around the best-returning asset for each of the past 52 years.

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Indexing: A Love Story

Readers of a certain age may remember Love Story, the best-selling and top grossing film of 1970, written by Ivy League classics professor Erich Segal. The last, most famous line from the pop culture melodrama is “love means never having to say you’re sorry.”

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Sell? To Whom?

The availability of indexed investments, particularly in the form of exchange-traded funds, has had a strangely perverse effect in the markets widely varying from the original conception of the uses of index funds. The academics that have pushed the concept of index investing generally assumed that since you no longer were trying to beat the market or consider the relative merits of individual stocks, there is no incentive to sell your index holding until you need the money for spending.

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Where are the Brakes on This Thing?

Active, value-oriented managers typically keep a cash reserve to take advantage of market opportunities. In a severe market decline, they put this cash stash to work buying perceived bargains. Their behavior acts as a natural brake on what otherwise could turn into a more sudden and severe decline. Investors evaluate index funds solely on “tracking” error – how closely they follow their benchmark index.

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Who is Minding the Store?

As indexing popularity has increased, active managers argue that index investors are free riders on their research and activities that make the prices of stocks commensurate with underlying corporate values.

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Investing is a Social Science, Not a Natural Science

Investor behavior changes market outcomes, many times in erratic and volatile fashion. Human psychology can be capricious, impacted by new technology, new philosophies of investing and the recent performance of different types of assets, among many other factors. Because of fickle behavior, taking even good ideas to extremes warps the reality of the markets in risky and unpredictable ways.

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FANG, Indexing and Mystery Meat

Our spirited political environment now may include debate over the definition of what constitutes “news,” but this is not new. In Hollywood, public relations hype precedes every new supposed blockbuster. In sports, endless analysis precedes each week’s Game of the Century. In the investment world, repeated stories assess whether active investment managers as a group beat their index benchmarks.

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The Magic Window

Imagine you have a window in your house. Whenever you look through the window, you see only what you desire. Is having that window a good thing or a bad thing?

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Why Does Anyone Pay Attention to These People?

Optimism is supposed to be a virtue, and nowhere is this virtue stronger than Wall Street. Market strategists most commonly assess stock index valuation by comparing current prices to the level of future earnings predicted by the consensus of investment analysts. Stock prices are supposed to discount the present value of everything we expect is coming. Why pay attention to the past when what matters is the future

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