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 05/08   The high price of low volIndexing 
 05/01   Popular at a priceIndexing 
 04/24   Minimum volatility investors bewareIndexing 
 04/24   How politicians poisoned statisticsGovernment 
 04/24   The wrong kind of savingsBonds 
 04/10   Chou Funds letterValue Investing 

Frugal News

The high price of low vol
05/08/16   7:28 PM ESTIndexing
"If you buy a 'low-volatility' fund, make sure you're comfortable paying a higher price. That's the warning that emerges from the surge in popularity of funds specializing in stocks that fluctuate less than the stock market as a whole."
More Indexing: Popular at a price
Minimum volatility investors beware

Popular at a price
05/01/16   1:18 PM ESTIndexing
"BlackRock hasn't just ignored the fee war. It has raised EEM's fee - a practically unheard move for an ETF. EEM used to charge 0.67 percent. Now it charges 0.69 percent - a rare case when a popular ETF charges more than (gasp) the average active mutual fund."
More Indexing: Minimum volatility investors beware
The curse of the Dow

Minimum volatility investors beware
04/24/16   8:08 PM ESTIndexing
"If the long-term benefits of Low Vol investing are actually associated with some sort of Value premium, then current Low Vol investors should beware. Valuation for Low Vol stocks is expensive. A once good idea has run its course. All of the research I have done or reviewed suggests that high current valuation leads to low future return. Valuations on Low Vol have risen substantially in just the last few years. Based on the PE ratio, USMV is 80% more expensive than it was when it launched. In a best case scenario, Low Vol seems destined for mediocre future returns. In a worst case, the correlations and volatilities underlying the ETF's holdings could change quickly, providing an unexpected return profile for investors whose expectations have been managed for downside protection."
More Indexing: The curse of the Dow
How indexing changes indexes

How politicians poisoned statistics
04/24/16   7:41 PM ESTGovernment
"Perhaps the lies aren't the real enemy here. Lies can be refuted; liars can be exposed. But bullshit? Bullshit is a stickier problem. Bullshit corrodes the very idea that the truth is out there, waiting to be discovered by a careful mind. It undermines the notion that the truth matters. As Harry Frankfurt himself wrote, the bullshitter 'does not reject the authority of the truth, as the liar does, and oppose himself to it. He pays no attention to it at all. By virtue of this, bullshit is a greater enemy of the truth than lies are.'"
More Government: A debt of choice
Trump's business disaster

The wrong kind of savings
04/24/16   7:38 PM ESTBonds
"Negative interest rates are surely a sign that something is wrong with an economy. Normally, people have to be rewarded if they are to be induced to postpone consumption. Penalising them for doing so seems perverse."
More Bonds: Bond returns imperilled
Bizarro world of negative interest

Chou Funds letter
04/10/16   9:27 PM ESTValue Investing
"It is hard for us to believe that RFP is trading as low as $4 per share."
More Value Investing: Alpha or assets
Is value coming back?

Alpha or assets
04/10/16   5:44 PM ESTValue Investing
"With fees lower across the board, scale becomes a more important consideration for asset managers when deciding what strategies to offer the investing public. When fees fall, assets need to rise. For assets to rise across a business, the strategies offered need to be able to accommodate more invested money."
More Value Investing: Is value coming back?
Valuable losses

Trump, trade and the China shock
04/03/16   5:30 PM ESTWorld
"Freer trade has inflicted a more grievous toll than economists, myself included, had expected."
More World: Economic world history
Zombie factories

Curse of the benchmarks
04/02/16   10:52 PM ESTFunds
"Indeed, benchmark requirements coupled with short-term horizons, ironically, serve as poison for investors who allocate to active funds. The only solution is to marry active strategies with investors who are educated and can internalize the fact that sustainable active investing has to be difficult."
More Funds: Chasing returns
Sequoia sued over Valeant stake

When trading detracts from alpha
03/28/16   7:08 PM ESTMarkets
"Whether you decided to invest in actively managed funds, or you were forced to invest in them (maybe because of limited choices inside of corporate retirement plans), you should choose funds not only with low expense ratios, but also with low turnover rates. Those choices will at least reduce the very high odds against generating alpha (risk-adjusted outperformance)."
More Markets: How unique is your portfolio?
Stocks you shouldn't own

How much you'll earn
03/27/16   7:19 PM ESTThrift
"If you have a Bachelors degree, you will earn approximately $1.8 million in your lifetime. That's it. That's all you have"
More Thrift: The Cost Matters Hypothesis
Learn to spend

A debt of choice
03/26/16   4:56 PM ESTGovernment
"But the federal debt is only part of our overall debt level. The provinces collectively have debts very nearly equal to the feds, bringing the combined federal-provincial debt closer to 60 per cent of GDP"
More Government: Trump's business disaster
From the tower to the white house

Dividend stock downside
03/20/16   3:09 PM ESTDividends
"I had started with a hypothesis: by avoiding dividends might we actually improve 'dividend investing'? But by removing the dividend, it inadvertently refocused the selection methodology on pure value. My research turned out to be a backdoor way of reminding myself that value investing and dividend investing - while often confused as the same thing - are actually distinct strategies. And more times than not, value wins out."
More Dividends: How to beat the S&P 500 index
Dividend yield a value factor?

How to beat the S&P 500 index
03/19/16   8:20 PM ESTDividends
"From 1991 until 2016, his strategy gained an average compound return of 12.76 percent per year. In a tax deferred account (not including transaction costs) it would have turned $10,000 into $201,315. Investors in Vanguard.s S&P 500 Index (VFINX) would have averaged a compound annual return of 9.7 percent per year. The same $10,000 would have grown to $101,265."
More Dividends: Dividend yield a value factor?
Dogs of The Footsie

The curse of the Dow
03/19/16   8:19 PM ESTIndexing
"The so-called Curse of the Dow, an old Wall Street adage, holds that companies usually rally leading up to the day they join the blue-chip index, but then underperform in the year after."
More Indexing: How indexing changes indexes
Index funds may work too well

RBC fund became a tax headache
03/19/16   8:16 PM ESTTaxes
"RBC had triggered the capital gain - and a related one in 2014 - when it sold the fund's individual stocks and bonds and replaced them with RBC's own mutual funds."
More Taxes: The impact of taxes
Clarity on TFSA contribution limits

Smart beta gone wrong
03/12/16   5:57 PM ESTMarkets
"Many of the most popular new factors and strategies have succeeded solely because they have become more and more expensive. Is the financial engineering community at risk of encouraging performance chasing, under the rubric of smart beta? If so, then smart beta is, well, not very smart."
More Markets: The case for stocks
Credit Suisse Global Yearbook 2016

Best balanced funds
03/12/16   5:51 PM ESTStingy Investing
"Balanced funds tend to be much less volatile than stock funds, or individual stocks, because they hold diversified portfolios of stocks and bonds. The combination helps to dampen out the market's swings, which makes the funds easier to stick with through thick and thin."
More Stingy Investing: A value catch
A history of small cap performance

How indexing changes indexes
03/12/16   5:49 PM ESTIndexing
"Rat's tails and dead cobras were measures of progress against vermin overpopulation in Vietnam and India. But those measures then became the targets of enterprising citizens, and in the process ceased to be a good measures. In America, home ownership was a measure of quality of life and happiness, so it became a target, and we know how that ended. This is becoming a bigger and bigger problem in the stock market."
More Indexing: Index funds may work too well
In defense of active investing

Trump's business disaster
03/05/16   11:12 PM ESTGovernment
"Why is Donald Trump getting a pass for his disastrous and incompetent track record of running a public company?"
More Government: From the tower to the white house
Slaves of the markets

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