Podcasts of the Week: Pysh, Arnott & Thaler

By Jack Forehand — With so many great investing podcasts out there, it can be difficult to identify the best ones. Through our new Podcasts of the Week segment, I will try to help filter out the most interesting episodes and identify the podcasts I learned the most from each week. In addition, we will also take a look at a great podcast from the past via the From the Archives section. Best Episodes This Week Preston Pysh – Adventures in Finance – 10/6/2017 This episode is technically from last week, but I just got to listen to it and […]

Arnott Says U.S. Stocks are “Dead Money”

The founder and CEO of Research Affiliates argues that investors should load up on emerging market  stocks and sell off overpriced U.S. equities, according to a recent Barron’s article. In a recent interview, Arnott shared his insights on the subject: Should an investor make emerging markets a larger part of their portfolio? It depends on their level of risk tolerance, Arnott says. For instance, if an investor becomes “panicky” if share price gains are not immediate, then maybe not. “If you aren’t panicky,” says Arnott, “then I would be [disinclined] to own U.S. equities now.” On predicting performance of emerging […]

Smart Beta Investing May Not Be So Smart

A new study has raised questions as to whether smart beta mutual funds, which are on course to reach $1 trillion in assets by the end of 2017, are as “smart as they claim to be,” according to a recent article in the Financial Times. The article quotes University of Finland finance professor Antti Suhonen, who led the research, from his report (published in May): “Investing in smart beta does require good investor education, due diligence, monitoring of the investment and, most importantly, a strategic and realistic setting of investment objectives for the strategies.” Suhonen’s study examined 215 strategies developed […]

Index Fund Pioneer Warming to Computer-Generated Trading

Princeton economics professor Burton Malkiel, who started the first passive index fund for Vanguard in 1976, has experienced a “remarkable change of heart,” according to a recent article in the New York Times. Referencing Malkiel’s revolutionary notion that dart-throwing monkeys could pick winning stocks as well as market “experts,” the article says the “index-fund evangelist” now believes, “Maybe the experts can beat the monkey after all. That is, if the experts are software engineers writing sophisticated algorithms for computer-generated trading.” Malkiel, chief investment adviser for automated investment management firm Wealthfront, recently adopted a new approach they call Advanced Indexing. The […]

Rob Arnott Says U.S. Stock Valuations Are a Worry

Rob Arnott, founder and CEO of Research Affiliates, says investors should “avoid U.S. stocks and buy emerging market equities to outperform in the coming years,” according to a recent CNBC interview. Arnott was a pioneer in developing indexing strategies that weight portfolio holdings according to valuation measures rather than market capitalization (a strategy typically used by passive index funds) and therefore overweights undervalued companies and underweights overvalued companies. The article cites data on the Research Affiliates website showing that approximately $179 billion of assets are managed using these strategies as of March 2017. According to Arnott, the U.S. market P/E […]