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Resources

Don’t Exclude Emerging Markets

Does the current empirical evidence still suggest there’s a significant benefit to including emerging markets stocks in a globally diversified portfolio? Larry Swedroe makes his case for the prudent investment strategy. Thirty years ago, emerging markets made up only about 1% of world equity market capitalization, and just 18% of global GDP. As such, the…

Chasing Returns Is a Hard Catch

Larry Swedroe on a study showing why performance chasing rarely succeeds. There is a considerable body of evidence demonstrating that the post-hire performance of active managers tends to be disappointing relative to their pre-hire performance. Specifically, managers’ performance tends to regress toward zero after adjusting for expenses, risk, exposure to common factors and survivorship bias….

Don’t Underestimate the Role of Buybacks in Stock Returns

Larry Swedroe looks at recent research into payout policies and the long-run drivers of expected equity returns. In their famous 1961 paper, “Dividend Policy, Growth, and the Valuation of Shares,” Merton Miller and Franco Modigliani theorized that investors should be indifferent about whether they receive distributions via dividends or buybacks, as well as how they…

The Scarcity Fallacy: Is Less Really More?

Tim Maurer on why finding our path to contentment may have little to do with the dichotomy set up between the pursuit of less and the pursuit of more, scarcity versus acquisition. Having the privilege of walking through life with people vocationally, aiding in the acquisition, maintenance and dispossession of earthly resources as a financial…

Fixed Income Quick Take: What Is a Bond Ladder?

Fixed Income Advisor Blerina Hysi talks through some of the benefits of well-structured bond ladders, including the ability to customize them to meet an investor’s unique needs and their implications for fixed income risk. Laddered bond portfolios can be customized to meet each investor’s unique needs. Plus, they help reduce the risk associated with investing…

Complex Instruments Don’t Enhance Bond Fund Performance

Larry Swedroe unpacks recent research that shows, overall, complex investments just don’t have a significant impact on performance. The U.S. bond market is one of the largest in the world, with managers controlling more than $2 trillion in assets. Given its size, an important question is whether active bond fund managers add value. Markus Natter,…

Shorting’s Impact on Tax-Efficiency

Larry Swedroe unpacks the research and explores the benefits of tax-aware, long/short funds. Among the “smart beta” strategies that recently have become popular are funds that go long securities with favorable characteristics and short those with unfavorable characteristics. For example, to capture the value premium, a fund would go long value stocks and short growth…

Value May Be Down, But It’s Not Out

Larry Swedroe concludes it’s premature to give up on the value factor, but also that its premium has only been earned by investors disciplined enough to stay the course through sometimes long periods of underperformance. As the director of research for Buckingham Strategic Wealth and The BAM Alliance, I’ve been getting lots of questions about…

Hedge Fund Activity Is No Gauge of Outperformance

A Larry Swedroe unpacks these findings, and explains why they offer yet another reason investors should avoid a loser’s game. As I recently observed, hedge funds began 2018 coming off their ninth-straight year of trailing U.S. stocks (as measured by the S&P 500 Index) by significant margins. And for the 10-year period ending 2017—one that included…

Financial Distress and Stock Returns

Larry Swedroe looks at research into the anomaly that exists in the relationship between default risk and equity returns. The most basic of asset pricing theories is that riskier assets should command higher expected returns. Clearly, financial distress is a risk characteristic, but it’s one that presents a dilemma, as there has not been a…

Taxes Are Everywhere, But So Are Planning Opportunities

Wealth Advisor Bill Morgan shares some ways to implement efficient tax strategies as you work your way toward your financial goals. Just hearing the word “taxes” can cause anxiety. After all, taxes are often among the most significant expenses you will face. However, William Morgan, a longtime CPA and a wealth advisor with Buckingham Strategic…

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