Is It Time for Active Managers to Shine?

“Passive funds tend to attract more inflows after the underlying indexes have performed well, so they’re driven by momentum rather than by analysis of company valuations and fundamentals,” according to a recent article in Barron’s. The article quotes Mike O’Rourke, chief market strategist at Jones Trading, who argues that passive strategies “have a place in […]

Liquidity Concerns Increasing for Fairholme Fund

The Fairholme Fund, which was launched in 1999 by Bruce Berkowitz, has seen investors pull out more than $16 billion over the past six years due to poor performance, an exodus that is raising liquidity concerns. This according to a recent article in The Wall Street Journal. Morningstar estimates show the large-cap value fund has […]

Yale’s Actively Managed Fund Performance Waning

The majority of the Yale University endowment fund is invested with active managers but, if you compare its returns to low-cost active strategies rather than to passive indices, “Yale’s active managers don’t look so special,” writes Bloomberg’s Nir Kaissar. In its recently released 2016 annual report, the article says the esteemed university’s endowment rebutted “fee […]

The Relationship Between Stocks and the U.S. Dollar

While the dollar’s relationship with the economy as a whole is relatively “murky,” the relative performance of U.S. and foreign equities against the dollar is more distinct, writes Ritholtz Wealth Management’s Ben Carlson in a recent Bloomberg article. “When you own shares from other countries around the globe, the diversification benefits come mainly from your […]

FPA Crescent is a Winning Active Fund

“There is no index fund—or other active fund, for that matter—that behaves like Crescent,” writes Morningstar’s John Rekenthaler. The article explains that Crescent’s asset allocation over time contributes to its uniqueness. While on the surface it appears fairly standard–56% equities, 44% bonds—the difference lies in the timing exercised by fund manager Steve Romick. Rekenthaler describes, […]

Bridgewater’s Ray Dalio Offers Advice to the Everyman Investor

Ray Dalio, chairman of the world’s biggest hedge fund (Bridgewater Associates), recently shared his “best advice for the common investor” with Business Insider’s Henry Blodget. According to Dalio, the article says, most investors can’t compete with professionals and institutions that allocate huge sums of money each year in an effort to beat the market. Instead, […]

Robo-Investing is Gearing Up

As money managers allocate more resources to quantitative model-building, they are also amping up robo-advising services for clients seeking low cost investment alternatives, writes Validea CEO John Reese in this week’s Forbes. Since many of these strategies are outperforming actively managed funds, writes Reese, they are increasingly attractive to investors. He cites the example of […]

Weakening Profit Growth Could Squeeze Margins

As encouraging strong first quarter profit figures come in, investors should keep in mind that earnings of global companies in the S&P don’t necessarily reflect trends in the American economy, according to a recent Wall Street Journal article. The article points out that, on a global basis, year-over-year first quarter results look strong, but underscores […]

Hulbert: Don’t Believe These Old Market Adages

When investors follow popular stock market beliefs and seasonal patterns, the only people who make money are the brokers earnings trading fees from the subsequent buying and selling, writes Mark Hulbert in last week’s USA TODAY. Hulbert, founder of the Hulbert Financial Digest, shared his insights on the following three widely-assumed “strikes” against the market: […]

Environment Could Be Ripe for Small- and Mid-Cap Stocks

Even though their post-election surge has recently cooled, both small- and mid-cap equities remain well-poised in today’s market environment, according to two portfolio managers at Goldman Sachs in a recent Barron’s article. The authors outline the following supporting factors: President Trump’s’ agenda could “benefit small- and mid-cap companies disproportionately” since a large portion of their […]