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David Peartree

Feb 14, 2018

Worth Considering: Three performance problems with most mutual funds

For all their virtues, mutual funds have some serious flaws. To their credit, mutual funds can provide things that most investors desire, things like broad diversification, transparent holdings, good liquidity and easy trading. Unfortunately, most mutual also have serious performance flaws. They underperform. The most serious and often discussed problem is that most mutual funds […]

Jan 17, 2018

Worth Considering: Have ETFs made mutual funds obsolete?

In recent years, we have heard mutual funds characterized as outdated and inferior to the newer type of pooled investment known as exchange-traded funds or ETFs. Are they? ETFs are certainly newer and more innovative. New fund launches in recent years have overwhelmingly been ETFs as opposed to mutual funds. Mutual funds, by comparison, can […]

Oct 18, 2017

Worth Considering: The stock market isn’t what it used to be

Today’s U.S stock market is very different from the stock market of 40 or even 20 years ago. To start, the universe of publicly traded stocks has become much smaller. There are fewer listed stocks than in the past. The phenomenon is discussed in a report issued earlier this year by Credit Suisse, titled “The […]

Sep 27, 2017

Worth Considering: Benchmark your investment performance

Investors should compare their investment performance against an appropriate market benchmark. Let’s take a look at why and how to do it. Benchmarking refers to setting reasonable expectations for investment performance using broad market indices. Many investors will instinctively look at the performance of the S&P 500 Index or, worse, the Dow Jones Industrial Average […]

Aug 16, 2017

Worth Considering: Has the shift to passive index investing been overstated?

Investors are shifting away from actively managed funds and towards passively managed funds. The financial media have interpreted this as a “seismic” shift from active to passive investing, but they probably overstate, or perhaps they misunderstand, what is occurring. Lost in the discussion is a crucial distinction between using passive funds and using a passive […]

Jul 19, 2017

Worth Considering: A lesson from Buffett’s winning bet against hedge funds

Warren Buffett has won his 10-year bet against a group of hedge funds. The story of the bet is not widely known despite coverage by the financial press, but it holds a valuable lesson for investors. Here is the exact text of the bet: “Over a ten-year period commencing on January 1, 2008, and ending […]

Jun 14, 2017

Worth Considering: Take steps to avoid having abandoned investments

Adopting what is loosely referred to as a “buy-and-hold” approach to investing can make great sense for a long-term investor so long as it is properly understood and does not turn into “set-it-and-forget-it.” The “forget it” part can be problematic. Buy-and-hold investing really should be called “buy-and-manage.” Sound portfolio management includes tasks such as routinely […[...]

May 17, 2017

Worth Considering: The latest scoring by S&P Dow Jones on active fund managers

The latest SPIVA report by S&P Dow Jones offers a mix of old and new news about the performance of active investment managers. What’s new is that their scoring of performance for the first time extends over 15 years, a much longer time period over which to assess the performance of active managers. The old […]

Apr 19, 2017

Worth Considering: Understand different approaches to correctly measure your investment performance

The absence of a uniform standard for reporting investment performance presents a challenge for investors. As a rule, investment advisers are not required to report investment performance and, even if they do, there is no uniform standard for how the performance should be reported. In a recent article (“Correctly measuring your investment performance”) we discussed […]

Mar 15, 2017

Worth Considering: Correctly measuring your investment performance

Correctly measuring investment performance is a problem for many investors. The problem has two parts. First, many investors don’t even bother to measure their investment performance. Most brokerage account statements do not report the investment performance for the period in question. No investment return is reported for the month, quarter or year. It’s common for […]

Feb 15, 2017

Worth Considering: Market predictions as financial porn

Financial columnist Jane Bryant Quinn famously coined the phrase “financial porn” to describe much of the content produced by the financial press. She was referring to the stories and other items in the financial press designed to “tickle our prurient financial interest” as opposed to being in our long-term financial interest. Some financial porn is […]

Jan 18, 2017

Worth Considering: Revisiting the fear over rising rates and bond prices

The era of rising rates may be upon us, or not. Time will tell, but it’s clear at least that interest rates have been on the rise since the second half of 2016 and especially since the election. The yield on the 10-year Treasury rose by about .60% since the election. It is instructive, therefore, […]

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