Rebalancing Act
Global diversification gives investors a valuable tool for managing risk and volatility in a portfolio. But smart diversification has an important side effect. It requires maintenance.
In a given period, asset classes experience divergent performance. This is inevitable and, in fact, desirable. A portfolio that holds assets that do not perform similarly (i.e., with low [...]

Why would anyone purposely buy the most risky, meaning volatile, asset class for their investment portfolio? Because, it will provide the highest expected return. How has that worked out for investors during 2009?
Great, actually. The Emerging Markets asset class is the most volatile broad asset class there is. How was the performance last year when [...]

In the past five years, actively managed stock and bond funds have shown a significant rate of non-survival, and among the survivors, only a few have consistently outperformed their category benchmark.
Some people claim that strong financial markets offer opportunities for active managers to add value, while others say that active management works best in market [...]

Research indicates that humans are not naturally wired for prudent, long-term investing. Scott Bosworth, Vice President and Regional Director, describes common forms of behavioral bias and discusses how these biases influence investment decision making. He also explains how knowledge and discipline can help investors control their instincts for a better investment outcome.
(Running time: 20:00)
To view [...]

The statement that a money manager or broker cannot, with consistency, outperform “the market” is cause for a fight with most Wall Street types. So, I guess the first thing we should do is ask and answer, “Is this true that money managers cannot consistently outperform “the market”?
Let’s begin with some factual data and the [...]

Widely cited as the father of the efficient market hypothesis and one of its strongest advocates, Professor Eugene Fama examines his groundbreaking idea in the context of the 2008 and 2009 markets. He outlines the benefits and limitations of efficient markets for everyday investors and is interviewed by the Chairman of Dimensional Fund Advisors in [...]

Anyone who has been to a fortune teller who reads tea leaves will tell you that if you stare at the patterns long enough, the remnants in your cup can magically begin to look like the vision of the future the fortune teller is foretelling. In the realm of investing, the same is true with [...]

HISTORICAL stock charts seem to show that it took more than 25 years for the market to recover from the 1929 crash — a dismal statistic that has been brought to investors’ attention many times in the current downturn.
But a careful analysis of the record shows that the picture is more complex and, ultimately, [...]

What is the opportunity investing in GM stock? Can it be profitable coming out of bankruptcy? If you think so, think again. Read this Investor Alert.
The SEC and FINRA are issuing this Alert because we believe there may be widespread misunderstanding by investors that stock in the “old” General Motors Corporation (now known as Motors [...]

Ken French

The answer depends on why stockholders want to leave the market. During the financial crisis, some investors discovered that their tolerance for risk is lower than they thought, so it might make sense for them to permanently reduce their exposure to equities. Investors who wish to avoid the price impact of the recession, however, [...]