Critical Estate Planning Documents

Month: June 2012

June 29, 2012  |  

Critical Estate Planning Documents

According to The Council for Disability Awareness, over 36 million Americans are classified as disabled (12% of the population). How do you protect yourself and your heirs in the event of disability? I recently wrote about the importance of having a will in place. But a will does not protect you if you become disabled or incapacitated. Generally speaking, in the event you become incapacitated and you do not have any estate planning documents in […]

June 18, 2012  |  

The 20th Anniversary of a Breakthrough in Investment Theory

In 1992, two finance professors, Eugene Fama of the University of Chicago and Kenneth French of Dartmouth College, turned the world of finance on its head by demonstrating that the prevailing theory of portfolio returns did not work well. They reported that the old method (the Capital Asset Pricing Model), which attributed portfolio returns to its volatility relative to the broad stock market, was not very good at explaining portfolio returns. Fama and French added […]

June 11, 2012  |  

The Return of Volatility: Part 2

As a follow up to our¬†recent blog post, The Return of Volatility, I would like to present evidence that historically it is not unusual to experience negative returns in multiple asset classes simultaneously on the path to long term investment success. The table below offers a perspective on the frequency of severe negative volatility experienced by the domestic large cap, domestic small cap, international developed markets, and emerging markets equity asset classes. These classes are […]

June 4, 2012  |  

The Return of Volatility

During May, the worlds capital markets saw a sharp increase in volatility that was accompanied by falling prices. Importantly, successful long-term investors are able to put short-term negative events into perspective and that allows them to capitalize on the long-term returns offered by stocks. This blog post offers evidence that short-term negative results are not necessarily indicative of a poor long-term investment strategy. Stocks offer a higher expected return than bonds over the long term. […]