The Diversified Blog

A wealth management blog dedicated to creating a long lasting sustainable retirement.

Will White House Scandals Derail the Stock Market?

Here is a nice article provided by Anne Kates Smith of Kiplinger:

 

By Anne Kates Smith, Senior Editor, From Kiplinger's Personal Finance, August 2017

 

Investors are wondering if the stock market’s Trump bump could morph into the Trump slump as questions continue to swirl around the White House regarding its Russia connections. It’s a high-stakes concern. Since President Trump’s election in November, stocks have risen 14% on high hopes for the president’s pro-business agenda, which includes corporate tax cuts and regulatory rollbacks. But policy has been overshadowed by probes in Congress and in the Justice Department.

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Academic Research Produces About Three to Five Good Ideas Every 20 Years

 

In a recent article by Ron Rimkus, CFA he asked Nobel Laureate Eugene Fama some questions regarding investing. Eugene Fama said to stick with the basic factors. 

 

"One of the problems with the financial industry today," Fama lamented, "is that academic research produces about three to five good ideas every 20 years. However, the financial industry packages and sells about 10 new ideas per week." The industry has clearly begun to embrace passively managed index funds and such factor-based products as smart beta. 

 

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How Survivorship Bias Can Skew Your Views on Mutual Fund Performance - 2017

How Survivorship Bias Can Skew Your Views on Mutual Fund Performance updated thru 2016

 

It’s important to avoid treating the market like a popularity contest by chasing outperformers or running away from the underdogs. But neither do most investors want to go into the market entirely blind. For that, there are database services that track and report on how various fund managers and their offerings have performed.

 

Besides ample evidence that past performance does not predict future returns, there is another reason we advise investors to proceed with caution when considering past performance: Many returns databases are weakened by survivorship bias.

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When Rates Go Up, Do Stocks Go Down?

Here is a nice article provided by Dimensional Fund Advisors:

 

Unlike bond prices, which tend to go down when yields go up, stock prices might rise or fall with changes in interest rates. Despite the unpredictable nature of interest rate changes, investors may still be curious about what might happen to stocks if interest rates go up.

CLICK HERE TO READ MORE:

When-Rates-Go-Up-Do-Stocks-Go-Down.pdf

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The Uncertainty Paradox

Here is a nice article provided by Dimensional Fund Advisors:

 

“The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. As individuals, we can feel more or less uncertain, but that is a distinctly human phenomenon.

CLICK HERE TO READ MORE:

The-Uncertainty-Paradox.pdf

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