Hulbert Cites Bear-Market Warning Indicator

  In a recent MarketWatch article, Mark Hulbert presents a market-timing indicator that “has a better historical track record than the cyclically adjusted price to earnings ratio” made famous by Nobel Laureate Robert Schiller. The indicator, he writes, is the “average portfolio allocation that U.S. households have to equities,” which has reached its current level five other times since the 1980s.” Four of those times, Hulbert asserts, “came right before major stock market tops.” Hulbert… Read More

Hulbert Says Momentum Investing Lives

There are still good reasons for investors to pursue a momentum strategy, writes Mark Hulbert in a recent Wall Street Journal article. He offers data collected by Eugene Fama (University of Chicago) and Kenneth French (Dartmouth College) showing that over the past ten years the stocks in the top decile vis a vis performance outperformed the S&P 500 by just 1.3 percentage points. “That is less than one-fifth as much as the strategy’s average annual… Read More

Hulbert on When to Fire Your Investment Adviser

Market-lagging performance, writes Mark Hulbert in a recent MarketWatch article, is not a good enough reason to fire your adviser. It’s extremely difficult, Hulbert says, to beat the market by “picking individual securities, ETFs or mutual funds—even among those with stellar track records for past performance.” He argues that, even those advisers and investment approaches that outperform will suffer periods of lackluster returns over the long-term. Hulbert cites the example of Warren Buffett and Berkshire… Read More

Hulbert Says War Doesn’t Scare the Stock Market

While the stock market doesn’t like war, the uncertainty that precedes a foreign military operation is typically resolved soon after any U.S.-led hostilities begin, and the market responds very positively. This according to Mark Hulbert in a recent Barron’s article. Hulbert cites the countries “saber-rattling directed at North Korea and Syria” as recent examples corresponding to a dip in the Dow Jones Industrial Average (Validea note: this as of April 20th—the index has since picked… Read More

Hulbert: Don’t Believe These Old Market Adages

When investors follow popular stock market beliefs and seasonal patterns, the only people who make money are the brokers earnings trading fees from the subsequent buying and selling, writes Mark Hulbert in last week’s USA TODAY. Hulbert, founder of the Hulbert Financial Digest, shared his insights on the following three widely-assumed “strikes” against the market: “Sell in May and go away:” The notion that investors should go to cash on May 1st and not return… Read More

Hulbert on the Likelihood of a Market Bubble

A new study conducted by Harvard University professors reveals that a share price run-up is not necessarily a precursor to a market bubble, writes Mark Hulbert in a recent Barron’s article. The study also suggests, says Hulbert, that the “mere existence of a major decline doesn’t automatically mean that the previous run-up was a bubble.” [The study defines a bubble as a price increase of at least 100% over a two-year period followed within the… Read More

Hulbert Calls Large Cap Strength a “Bullish Omen”

Mark Hulbert argues against the conventional wisdom that small-cap outperformance relative to large-caps indicates a positive trend (the idea being that large caps will “have to perform particularly well just to catch up”). This according to his recent MarketWatch article. After evaluating 20 years of relative performance data for both the S&P 500 and the Russell 2000 (small-cap index), Hulbert concludes that outperformance by the S&P 500 is a “bullish omen,” and that, “none of… Read More

Hulbert Challenges Harvard’s Lesson on Investing

After a disappointing year in which its endowment fund actually lost money, Harvard University fired half of its investment staff, writes Mark Hulbert in last week’s MarketWatch. However, he argues, “it’s not that past performance doesn’t count; what’s irrelevant is performance over the recent past. Calendar-year performance, for example, tells you next to nothing about whether your manager is a good bet for future returns. The long-term performance of Harvard’s endowment fund is strong, says… Read More

Hulbert: Don’t Chase the Winners

 At a time when investors are inundated with the “best of” performance rankings for 2016, a recent MarketWatch article by Mark Hulbert advises against chasing the winners. The best thing to do, he writes, is “sit on your hands.” Hulbert suggests that investors “consider those that were in the top quartile for performance three years ago. Believe it or not, many of them were in the bottom quartile for performance over the last 12 months.”… Read More

Hulbert: A Balanced Portfolio is the Better Choice

An all-equity portfolio “barely produces better returns than a mix of stocks and bonds,” writes Mark Hulbert in last week’s MarketWatch. This isn’t a prophecy of an imminent bear market, he says, but rather is based on years of data spanning the last 90 years (provided by Ibbotson–a division of Morningstar). The data shows that, since 1926, a 60/40 stock/bond portfolio would have produced an 8.6% return, only 1.4 percentage points lower than the 10%… Read More