Investment Strategy Too Good to Be True? Take Closer Look.

A recent CFA Institute article tested a theory (shared by a large investment management firm) that a portfolio invested 51% in the S&P 500 could yield the same returns as one that is 100% invested in the index. “In other words, the strategy delivers the same portfolio return at only half the volatility.” The article notes: “At a time when market volatility exceeds 2008-2009 financial crisis levels, such a strategy has an understandable appeal. Given… Read More

Building an Investment Checklist

By John P. Reese —  In this year’s letter to Berkshire Hathaway shareholders, Warren Buffett refers to the conglomerate’s “gradual shift from a company obtaining most of its gains from investment activities to one that grows in value by owning businesses.” An article in the Wall Street Journal last month titled, “Warren Buffett’s Berkshire Moves Away from Stock Picking,” underscores the shift in the context of the conglomerate’s offer to purchase power-transmission firm Energy Future Holdings for… Read More

Politics Shouldn’t Impact Investing Decisions

“In a period of otherwise extended market calm, ” says a New York Times article published in May, “geopolitics have been driving periodic bouts of volatility.” Citing such events as President Trump’s attempt to shut down the F.B.I. investigation of former national security adviser Michael Flynn, the article says, “Even small investors have been making bets on the impact politics can have on stocks and other asset classes.” But this isn’t a wise move, according… Read More