Results for 'larry swedroe'
Commission-free trading and lottery stocks
On October 1, 2019, Charles Schwab announced commission-free trading in stocks, ETFs and options trades. Other online broker rivals followed suit shortly afterward. Did the introduction of commission-free trading affect investor behaviour? William Johnson, Surendranath Rakesh Jory, Tanakorn Likitapiwat and Thanh Ngo, authors of the study The Liquidity Impact of Commission-Free Trading on […]
Is it time to ditch the value factor?
By ROBIN POWELL As Eugene Fama and Kenneth French famously demonstrated in 1992, value stocks have outperformed growth stocks over the long term. But growth has had the upper hand over value since the global financial crisis, and some commentators are suggesting that the so-called value factor, or value premium, has run its […]
The eye-watering sum active US investors lose each year
Newly published research shows that US investors are losing $235 billion a year by using actively managed funds. But the true figure is probably higher. It’s well documented that the vast majority of actively managed funds underperform the market, net of costs, over the long term. Yet, even now, active investing remains […]
Measly fines for closet index funds do nothing to stop them
By ALEX MOFFATT Ireland’s Central Bank issued a press release in early November about a fine it had imposed on an investment company. The company, Mercer Global Investments Management Limited (MGIM), is not a big name in the investment world and the fine, of €117,500, is trivial in an industry that routinely […]
How do small value stocks perform in a recession?
By LARRY SWEDROE The stock market serves as a relocation centre at which money is moved from the active to the patient. — Warren Buffett Over the long term, small value stocks have rewarded investors with higher returns for their incremental risks. Over the period July 1926-August 2022, as measured […]
Predicting growth isn’t the same as predicting returns
By LARRY SWEDROE While growth stocks produced higher returns on assets and equities and faster growth in earnings than value stocks, value stocks have provided higher returns over the long term. There are several reasons for this result, which likely surprises many investors: While growth stocks have produced higher growth in earnings, […]
Mutual fund alpha as a predictor of stock returns
By LARRY SWEDROE Mutual funds (a type of institutional investor) are generally considered “smart money” that exploits the behavioral biases of “dumb” retail money. Recently, however, some holes have been poked in that bit of conventional wisdom. For example, Roger Edelen, Ozgur Ince and Gregory Kadlec, authors of the 2016 study […]
How good are analysts at forecasting earnings growth?
By LARRY SWEDROE In a recent article for The Evidence Based Investor I showed that while growth stocks have produced higher returns on assets and equities (i.e. they have been more profitable), and faster growth in earnings than value stocks, value stocks have provided higher returns over the long term. While that […]
