Expected Sources of Premium Stock Returns Part II: How Much Risk? How Much Expected Return?

Month: January 2016

January 27, 2016  |  

Expected Sources of Premium Stock Returns Part II: How Much Risk? How Much Expected Return?

In our last post, we introduced three major sources of return in the global stock markets, and how we went about identifying them. This raises another question: How have they been doing so far? A Look at the Evidence Before we determine that it’s a new world, in which we should jettison decades of data about expected market premiums, take a look at the long-term evidence. We’ll use U.S. data here, although international investments would […]


January 26, 2016  |  

Expected Sources of Premium Stock Returns Part I: Managing the “Daring Adventure”

When Helen Keller said, “Life is either a daring adventure, or nothing,” she probably wasn’t thinking about the stock market … but she could have been. Recently, some investors have been wondering whether it still makes sense to pursue expected returns from small-company and value stocks. That’s understandable, as investing in these two asset classes has indeed been a daring adventure lately, with relatively disappointing returns. Are small-cap and value investors experiencing a temporary set-back […]


January 21, 2016  |  

New Year…..Same Investment Principles

Key Takeaways: At the start of every year, you can count on news outlets, economists and fund managers bombarding us with varying opinions about the direction of the market. The only certainty for the market in 2016 is that it will be different from 2015. A disciplined, cost-sensitive, broadly diversified investment strategy creates a portfolio you can live with, year in and year out. You can set your watch by it. About this time every […]

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January 14, 2016  |  

Have You Seen the Elephant?

According to historical folklore, a common question posed to a new soldier during the American Civil War was, “Have you seen the elephant?” It meant something like, “Have you met the enemy?” Camp newcomers who had not yet experienced direct combat were viewed skeptically until they had survived the stress and terror of battle. Those units that had uncommon ability to maintain order and discipline on the battlefield were often recognized with names like “The […]