A question I’m often asked involves the merits of investing in private real estate as an alternative to publicly available REITs. To answer that question, I will turn to the historical evidence.
A landmark study looked back at more than 100 years of data and 23 countries to determine if there are reasons to believe the cross-sectional patterns in factor returns will persist, or whether they were just anomalies that tended to disappear after publication.
Women face at least 12 unique financial and life challenges related to long-term retirement planning. Addressing them can be overwhelming and uncomfortable. Only by understanding the issues can you develop strategies that will provide the greatest chance of achieving your clients’ goals.
We know the historical evidence shows there are premiums for factors, but how can you be confident that those premiums will persist after research about them is published and everyone knows about them? After all, we are all familiar with the phrase “past performance does not guarantee future results.” Here is my answer.
How a fund defines its universe of small stocks eligible for purchase will make a significant difference in performance.
Wall Street has ridiculed passive investing for decades. The reason is obvious: Its profits – and for many firms, their very survival – are at stake. The basic argument is that the popularity of indexing (and the broader category of passive investing) is distorting prices as fewer shares are traded by investors performing the act of “price discovery.” Let’s examine the validity of such claims.
As expert poker player Annie Duke explains in her book, Thinking in Bets, one of the more common mistakes amateurs make is the tendency to equate the quality of a decision with the quality of its outcome. Poker players call this trait “resulting.”
My first book, The Only Guide to a Winning Investment Strategy You’ll Ever Need, was first published 20 years ago, in May 1998. With its 20th anniversary in mind, let’s see how my recommendations worked out for investors who followed them.
Based on the logical, risk-based explanations for the value premium, and the lack of evidence pointing to shrinking valuation spreads, my conclusion is that the most recent 10 years of performance is likely just another of those occasionally occurring but fairly long periods in which the value premium is negative.
New research shows a majority of active managers outperformed their emerging-market benchmarks, and did so by a wide margin (on average 1.57% annually). But it would be wrong to conclude that active management is the winning strategy in EM.