The Last Redoubt of Active Management—Down Markets?

Blog_Sad_BearSo there I am, at a recent Loring Ward Conference during a break. We’d just wrapped up a presentation on Asset Class Investing that includes a number of slides on the challenges active managers have in consistently and predictably outperforming the market. Continue reading

Ho Ho Horrible Holiday Investing Myths

Instead of sitting back with a glass of egg nog and overdosing on Rankin/Bass holiday specials, some investors spend year-end trying to decorate their portfolios with dubious investment ideas. Here are four holiday follies that are even nuttier and harder to digest than fruitcake.


Santa Claus Rally
Yes Virginia, there may be a Santa Claus, but don’t count on a Santa Claus Rally — a small upward blip in stock prices that sometimes occurs between Christmas and New Year’s. Explanations for the rally, which was “discovered” in 1972, include bears and other pessimists giving in to the holiday spirit, year-end tax planning, even investors spending Christmas bonuses. Continue reading

Mean Variance Optimization: Factor-Based or Asset Class-Based Inputs

blog11_newWorking with Dr. Harry Markowitz on the Loring Ward Investment Committee has taught me to never look at any type of change to a portfolio until I’ve done extensive mean variance optimization (MVO) work. However, there are about 100 different decisions you must make when running an MVO process and it starts with your input assumptions.

Continue reading