Results for 'larry swedroe'
Testing the patience of value investors
By LARRY SWEDROE Patience: A quality apparent among such lower life forms as snails and tortoises but rarely among humans who invest in financial assets. — Jason Zweig, The Devil’s Dictionary The decade from 2012 through 2021 provided a test of the faith and discipline for value investors as the Fama-French […]
New study shows 20 years of failure for active managers
By LARRY SWEDROE Nobel Prize winner Eugene Fama is considered the father of the efficient market hypothesis (EMH), which asserts that financial markets are “informationally efficient” — the result of financial markets processing millions of trades, reflecting the viewpoint of investors, worth hundreds of billions of dollars each day. Using these trades […]
Even with index funds, look beyond the expense ratio
By LARRY SWEDROE The persistently poor performance of actively managed funds has led investors to shift capital away from actively managed mutual funds to passively managed funds, such as index funds, with much lower expense ratios. However, even for index funds, the expense ratio — the only observable and reported cost — […]
Identifying winning funds ex ante: Is it possible?
By LARRY SWEDROE While there’s no longer any debate that active management underperforms in aggregate, the majority of active funds underperform every year, and the percentage that underperform increases with the time horizon studied. If an investor were able to identify the few future alpha generators, active management could be the winning […]
The impact of uncertainty on investor behaviour
By LARRY SWEDROE While there is always uncertainty in the outlook for the economy and financial markets, a confluence of events has increased the uncertainty to high levels. The following are among the events that increased investor ambiguity: COVID-19 caused disruption of supply chains, leading to rising prices. It also led to […]
The impact of ESG uncertainty on asset prices
By LARRY SWEDROE While environmental, social and governance (ESG) objectives are increasingly becoming a primary focus in asset management, investors often confront a substantial amount of uncertainty about the true ESG profile of a firm. Demonstrating the point, the authors of the study Aggregate Confusion: The Divergence of ESG Ratings found that the […]
Is democracy good for stock market returns?
Most people, given the choice, would prefer to live in a democracy. But what does democracy mean for equity returns? Do stock markets in democratic countries deliver better returns than those in countries with autocratic leadership? LARRY SWEDROE examines the academic evidence. Nobel laureate economist Harry Markowitz is reported to have said […]
How have hedged mutual funds performed since the GFC?
By LARRY SWEDROE Hedged mutual funds (HMFs), or long/short funds, are the fund industry’s answer to illiquid hedge fund strategies. The premise of long/short funds is that the managers can apply their security selection skills to a broader opportunity set (both long and short, instead of long only). Their hypothesis is that […]
