Zweig Says Fees Should be Linked to Performance

The practice by many fund managers of charging flat fees to clients regardless of their performance isn’t fair to investors, says Jason Zweig of The Wall Street Journal. The tides are changing, he says, but not quickly enough. Federal law allows a mutual fund to raise fees when it outperforms, but only if it lowers fees by the same amount should it underperform (a so-called “fulcrum fee”). However, Zweig writes, this isn’t the norm, and… Read More

Jason Zweig on Investing Fact Versus Fiction

The human mind seeks to “confirm its pre-existing beliefs while ignoring warning signs that we might be wrong,” writes Jason Zweig of The Wall Street Journal. He uses the example of the surprise Trump win to illustrate how people avoid admitting that they were wrong. “If it requires fibbing to ourselves,” writes Zweig, “so be it.” Psychologists define the brain’s tendencies using the terms confirmation bias and hindsight bias. The first drives us to find… Read More

Zweig on Investing Vs. Speculating

Every asset, writes Jason Zweig of The Wall Street Journal, “is an investment in some people’s hands and a speculation in others’. So it isn’t what you buy, but rather why you buy it, that determines whether you are investing or speculating.” Zweig explains that this distinction, which is often credited to legendary investor Benjamin Graham, may be flawed in that an investment can in fact be speculative in nature or actually resemble a hybrid… Read More

Zweig’s Market Survival Guide

There’s a lot of talk among investors about beating the market, but in a recent Wall Street Journal article  Jason Zweig suggests that many overlook the challenge of merely surviving it. “Of all the qualities an investor needs to succeed,” he writes, “stamina may be the most underrated.” Zweig cites Morningstar data showing that of the 525 U.S. stock mutual funds that existed thirty years ago, 223 are still operating today (of those, only six… Read More

When Taken by Surprise, Wait it Out

“Little is ever clear about an incoming president, and no more than usual—perhaps less—is clear about this one,” says Jason Zweig of The Wall Street Journal. In yesterday’s “Moneybeat”, Zweig warns that investing action during a time of “political shock” is best put on hold. In the article, he argues that few could have anticipated the precipitous plunge (700 points) in Dow Jones Industrial Average futures on Tuesday night, only to be followed by a… Read More

Zweig on Closet Indexing & Active Share

For many years, argues Jason Zweig in last month’s Wall Street Journal, “many fund managers haven’t done much managing at all.” Instead, he writes, they track market indices and “buy a bit more of this stock and a little less of that one, in what’s known as closet indexing.” The problem, however, is that active fund management clients are paying hefty fees for what amounts to passive management. “To call such chicken-hearted tweaks ‘active management’”… Read More

Fidelity’s Contrafund: One Manager’s Mission

Will Danoff, the manager of Fidelity’s $108 billion Contrafund– the biggest actively managed stock or bond mutual fund run by a single person—believes that “humans have fundamental investing advantages that no machine will ever replace,” writes Jason Zweig of The Wall Street Journal. Since taking over the fund in 1990, Danoff has averaged a 12.7% annual return (outperforming the S&P by nearly 3% per year). However, over the past five years, writes Zweig, Contrafund has… Read More

Zweig: Buy in a Market Bust like John Maynard Keynes

Anyone who has studied economics will be more than familiar with the name John Maynard Keynes. In last week’s Wall Street Journal, Jason Zweig reports that new research is offering information about how the investment success of this great economist “should teach all investors the importance of preparation, courage and patience.” Before his death in 1946, Keynes wrote several books that, according to Zweig, “revolutionized economic policy and helped devise the modern global monetary system.”… Read More

Change is Coming for Financial Advisers

It seems that artificial intelligence is useful for more than just Pokémon Go. According to Jason Zweig’s recent blog in The Wall Street Journal, financial advisers are increasingly using the technology to better serve the needs of their clients. While advisers can understand a client’s situation by gauging their mood and asking questions concerning goals, dreams and risk tolerance, a computer can amass and dissect huge amounts of data to predict behavior. For example, Zweig… Read More

Zweig on the Impact of Index Funds

Last month marked the fortieth birthday of the first index fund (launched by John Bogle, founder of the Vanguard Group) and the anniversary has triggered a lot of discussion and reflection on the trajectory this class of funds has traveled since. Jason Zweig of the Wall Street Journal shares some thoughts on the subject and how the phrase “too much of a good thing” could apply. Zweig reports that over the past year $409 billion… Read More