Is Company Size Irrelevant?
On paper, there is abundant evidence that various return premia have been larger in small-cap stocks [...]
Contributing to the Literature: A Q&A With Jared Kizer and Sean Grover
Contributing to the literature: Jared Kizer and Sean Grover chat about the publication of their new journal article:
What You Need to Know About Brexit
Britain is leaving the EU. Now what? Jared Kizer on what the Brexit vote means for the markets and your portfolio.
An Updated Look at Public Pension Funding
This recap of a new study by Moody's on public pension funding reveals three important points, as well as the impact of pension funding on the municipal bond market.
What to Make of 10-Year Small-Cap and Value Results
Ken French’s recently updated global factor data shows the global size and value premiums were basically flat for the past 10 years (the value premium was actually about –1 percent per year over this span). This long-term historical result has surprised many people and naturally led some to ask whether these premiums can be expected in the future. Figure 1 graphs the one-, three-, five-, 10-, 15- and 20-year average size and value premiums using the global data set.
Revisiting International Diversification
International diversification has come under attack over the last couple of years as both international developed and emerging markets have underperformed U.S. stocks. Figure 1 illustrates this underperformance by looking at the growth of $1,000 invested in U.S. and international developed market stocks over the period from January 2008 through November of this year.
An Analytical Evaluation of Rising Glidepath Claims
Last year, a piece by Michael Kitces and Wade Pfau made the claim that mechanically increasing the equity allocation during retirement — which they term a “rising glidepath” — could reduce the likelihood that...
Additional Thoughts on the Rising Glidepath Approach
https://player.vimeo.com/video/107091798
Smart Beta Can Be Smart But Is Not New
I held off writing about smart beta strategies as long as I could. The world, after all, is awash in such pieces. I couldn’t ignore it any longer, though, because virtually every piece I’ve read that’s critical of smart beta misses one fundamental point: The term “smart beta” may be new (and has certainly been effective from a marketing perspective) but the underlying strategies themselves are not.
Do Corporate Bonds Add Value in Portfolios?
I frequently get asked about the merits of corporate bonds, both investment-grade (IG) and high-yield (HY), relative to government and municipal bonds. I don’t believe the risk-return profile for long-term investors (particularly taxable individual investors) is improved by owning IG or HY corporate bonds compared with simply owning a diversified portfolio of stocks and high-quality government bonds.