Monthly Archives: May 2011

A Trading Strategy That Really Works

Posted on May 31, 2011 by Dan Solin

The headline of a recent article in Barron’s caught my attention: “Fire Your Hedge Fund, Hire Your Congressman.” It reports on a study indicating that members of the House of Representatives outperform the average stock market investor by 6.8 percent … Continue reading →

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Tactical Asset Allocation: Market-Timing Wolf in Sheep’s Clothing

Posted on May 27, 2011 by Jay Franklin

Borrowing the definition from a recent Vanguard study, “Tactical asset allocation (TAA) is a dynamic strategy that actively adjusts a portfolio’s strategic asset allocation (SAA) based on short-term market forecasts. Its objective is to systematically exploit inefficiencies or temporary imbalances … Continue reading →

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What’s the Significance?

Posted on May 27, 2011 by Mark Hebner

Brad Steiman Friday, May 06, 2011 Caution: Technical Discussion to Follow—READ AT YOUR OWN RISK. As the old saying goes, there are three kinds of lies: lies, damned lies, and statistics. It is true data can be tortured with statistical … Continue reading →

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Will the Manager You Picked Deliver Alpha or Have You Been Fooled by Randomness?

Posted on May 26, 2011 by Jay Franklin

The holy grail of investing, the ever-elusive alpha, is the additional return above and beyond what can be explained by the assumption of risk. IFA has long held that both individual and institutional investors should not waste their time or … Continue reading →

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The Use of Statistics in Making Investment Decisions

Posted on May 26, 2011 by Jay Franklin

Throughout the IFA Website, there are many assertions regarding the expected returns of different asset classes, and there are many warnings against attributing outperformance to active managers based on a few years of hot returns. One could easily make the … Continue reading →

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401(k) Participants Need an "Arab Spring"

Posted on May 24, 2011 by Dan Solin

Let me start with the obvious (or what should be obvious, but isn’t): Retirement plans of all stripes should have only index funds or passively managed funds as investment options. There should be no actively managed funds (where the fund … Continue reading →

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Q&A: Liquidity and Stock Returns

Posted on May 23, 2011 by Mark Hebner

Q: Is there a liquidity risk factor in stock returns that helps explain differences in average returns? A: EFF/KRF: There are academic papers that address this question. Some papers say that the differential exposures of stocks to a liquidity risk … Continue reading →

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Debunking the Cramer Myth

Posted on May 20, 2011 by Dan Solin

The New York Times Magazine recently did a profile of Jim Cramer, titled “Jim Cramer Hits an All-Time High.” The author concludes that Cramer is a regular guy, who just happened to go to Harvard Law School, hit the jackpot managing a … Continue reading →

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Your 401(k) Plan Could Be Illegal

Posted on May 18, 2011 by Dan Solin

401(k) plans are a great deal for employers. Their cost is subsidized by brokers and advisers, at the expense of the plan participants (employees), who are supposed to be the primary beneficiaries. Let me give you a little primer on … Continue reading →

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“Introducing” Index Mutual Funds to 401(k) Plans

Posted on May 16, 2011 by Mark Hebner

By Ary Rosenbaum, Esq. May 16, 2011 The Internet was created in 1969. The first broadcast in high definition television was in 1996. The DVD was first released in 1998 and the Blu-Ray player made its debut in 2006. 401(k) … Continue reading →

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