Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Hi Guys,
Far,far too much bitterness and personal attacks in these exchanges. None of this makes for better investment and financial,decision making. Here is a Link that just might help:
https://www.pinterest.com/pin/223843043958770289/
Then ag…
Hi Guys,
Songwriter John Stewart really understood how to capture the feelings and emotions of events in a song. Here is one of his songs that contributes to this discussion:
john stewart mother country song
I hope you enjoyed it as much as I do…
Hi Guys,
As good as the USA is, it has its shortcomings. It is not perfect and will never be perfect since perfect differs for different folks. It is an impossible criteria.
Yet globally, the USA is a constant people draw regardless of its short…
Hi Guys,
This is just another case of Bill Bernstein being William Bernstein. From decades of interviews and a large number of insightful and entertaining books, Bernstein has advocated a simple and inexpensive investment strategy. Buy and hold a…
Hi Guys,
I post to alert you to this fine article. Far too few of us have visited it and it is about to disappear onto page two of this active site. It might be painful if it hits to close to home.
If we lose the war between fear and evidence we …
Hi Guys,
Diversification is one solid foundation when making asset allocation decisions. Diversification is a winning strategy, but too much diversification can do harm. That harm is captured when diversification increases portfolio volatility as…
Hi Guys,
Thank you all for your gracious well wishes.
I did recently suffer a medical condition that did demand immediate attention. Things worked out better than expected. I have much to be thankful for on this special day.
Best Wishes to all.
Hi Guys,
This long article does yield some useful insights. Here is one I extracted from the article:
“The best policy for portfolio management is one of benign neglect,” said Christine Benz, director of personal finance at Morningstar. “Your por…
Hi Guys,
The referenced Bernstein book is excellent, it is well worth the reading time.
Beating the market is the target goal of most investors. The accumulated historical data demonstrates that most of us fail that seemingly easy goal. And tha…
Hi Guys,
I surely do not own a crystal ball, and if I did, I'm certain it would be broken. Forecasting anything is always hazardous duty.
So rather then guessing, I'll default to the statistics. There's a mountain of stats for the marketplace. …
Hi Guys,
As Seth Kllarman is often quoted as saying "The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions."
We all have a strong tendency to overreact. As Damon Runyon remarke…
Hi Guys,
As Lord Kelvin observed: "Large increases in cost with questionable increases in performance can be tolerated only for race horses and fancy women". Perhaps there might be a few other exceptions.
Good investing advice can be nicely summa…
Hi Davidrmoran,
Timeframes for the correlation coefficients don't matter. The ever changing and random character of the correlation coefficient and returns data demonstrate the futility in making market projections. It just can't be done with any…
Hi Guys,
Malkiel is always an informative read. Diversification works regardless of the market direction although care must be exercised when doing the required asset allocations such that not too much anticipated return is sacrificed to achieved …
Hi Guys,
Modeling can get complex very quickly. One decision model will likely not be sufficient to touch all the bases. Here is a Link to 113 (yes really 113) decision models:
https://www.farnamstreetblog.com/mental-models/
Now Good Luck is re…
Hi Mark,
You propose an excellent question. How good are these experts? We can get a serviceable approximation in Byron Wein's case because he has been doing this for many decades. In his earlier forecasts he even scored himself, however not in …
Hi Guys,
Thanks one and all for a very stimulating and detailed discussion exchange.
Forecasting equity returns is an extremely challenging assignment. Separating "The Signal and the Noise"' is not easy work. The Signal and the Noise is an excell…
Hi Guys,
I suppose a very generic answer to this guesstion has to be a qualified "yes". A reversion to the mean has to happen after a particularly outlander (extremely out of the ordinary average result) outcome. But the real world answer is a de…
Hi Guys,
The marketplace generates a ton of data. Tables and charts are a great way to summarize these overwhelming data sets. The charts can be designed to highlight selected elements in a manner that the author wishes to emphasize his point of …
Hi Guys,
I'm a big advocate for integrating probability estimates into a decision process whenever possible. Sometimes it is not possible for various reasons like the data does not exist or the impact of the event on an individual is unknowable.
…
Hi Guys,
Have a safe and warm Christmas, and a healthy and wealthy 2018.
Here is a Link that will help in celebrating Christmas; my best wishes for 2018 depends both on you and also a lot on luck:
https://www.mormontabernaclechoir.org/articles/to…
Hi Guys,
Forecasting is a fool's game. "..... "economists had failed to predict 148 of the past 150 recessions."
I extracted that striking statistic from a recent article in The Guardian. Here is the reference:
https://www.theguardian.com/money/…
Hi Bee,
Thanks for reading my post and for the excellent, informative graph that you included in your reply.
I did read the article referenced, and I would say that the line you quoted is not unconditionally correct. It depends. It depends on th…
Hi Guys,
Like it or not, volatility is a characteristic of markets. It does change, sometimes dramatically, over various periods, but the historical record tells the basic truth. In very gross terms, annual equity standard deviation is approximat…
Hi Guys,
Forecasting outcomes is forever hazardous duty, be it sport events or investing. As Danny Kahneman observed: " The impossible sometimes happens, and the inevitable sometimes does not. ". But it is almost a certainty to work against your…
Hi Guys,
Diversification is easy to say, simple to do, but tends to sacrifice returns for reduced volatility. If you change your diversification category allocations dependent on perceived economic and/or market conditions that is a thinly disguis…
Hi Guys,
I too suspect that most investors do not fully understand the tradeoff that exists between skill and luck when making investment decisions. Luck is a far more significant contributor then is commonly appreciated.
We are fooled by randomn…
Hi Guys,
I too proudly salute our brave military. Here is a Link to the best anti-war song ever composed:
waltzing matilda jim mcdermott
All those who serve and have served do a dirty but needed job. Congratulations to all of us, brothers forev…
Hi Guys,
Market performance persistence is hard to find. The strong pull of regression-to-the-mean wins the battle in seemingly all encounters.
Mutual funds that outperform in one study period fall below the averages in extended timeframes. Fund…
Hi Ted,
Thanks, but no apologies are needed. I didn't anticipate your rapid recovery. Congratulations!!
You are the fire that makes this site so interesting and useful. That's a second deeply felt thank you.
Best Wishes
Hi Guys,
"Loss Aversion Says That The Pain Of Loss Is Stronger Than The Joy Of Gain." This is a key finding from Prospect Theory.
How much stronger is the pain of loss stronger than the joy of winning? The research suggests that losing is abou…
Hi Guys,
Here is the Link to the article that Ted rarely fails to provide:
http://www.sec.marketwatch.com/story/buy-large-cap-stocks-now-and-small-caps-in-january-2017-10-31
Mark Hulbert is an excellent market analyst and writer. This article do…
Hi Guys,
With unlimited access to market data and its interpretations we are all smarter investors these days then several decades ago. That universal availability of information makes it more difficult to get and maintain an edge in terms of mark…
Hi Guys,
Thank you for your insightful comments. They all added depth and opinion diversity to the discussion.
A ton of candidate Indexes are frequently updated to permit a comparison of an individual's fund portfolio performance against some mea…
Hi Guys,
Thanks Ted for this informative reference. Great stuff!
Hindsight data makes all of us seem smarter. It's much easier to explain with after-the-fact-data accessible then when making a market projection and investment decision.
I was no…
Hi Old Joe,
Thank you for reading my posts. I greatly appreciate your long term loyalty. I can assure you that if you continue that loyalty you will not forget the many advantages of Monte Carlo tools since I will continue to strongly advocate th…
Hi Guys,
Winning in the investment universe can be a daunting task. Yesterday's superior active fund managers often fail to repeat their successes in today's marketplace. The data is overwhelming in the negative direction. Only a little over 10%…
Hi Guys,
Being an "aimer" is very common. We all have goals. The challenge is how realistic those goals are. What are the odds of achieving those goals? Given market uncertainties, a 100% success goal is very bushy-tailed. But it is achievable…
Hi msf,
Thank you for reading my post, but an especial thanks for alerting me to my error in making a double reference. The Portfolio Visualizer website provides an excellent Monte Carlo simulator, but it doesn't merit a double endorsement.
In my…
Hi Guys,
Wow! This assembly of articles by financial writer Johnathan Clements is a real tour-de-force. It touches all the bases that a retiree should consider before retirement, during the decision process, and after retirement. In general, the…
