First off: Happy New Year to all the readers of my blog! I am sure that most investors will have enjoyed the equity market performance in the fourth quarter of 2019. With equity markets up between 8% (international developed markets) and 12% (Emerging Markets), the fourth quarter of 2019 was indeed very benign to disciplined investors like yourselves. Please enjoy our quarterly market review of Q4 2019 by clicking here or by clicking on the graphic below: #evidencebasedinvest
Are you feeling stung by the markets? Well, it turns out that - while the past quarter certainly tested the resolve and the stomach of equity investors - it certainly was not the worst quarter that we have seen, not even in recent memory since the beginning of this century. And we sincerely hope that your adviser had prepared you for such market volatility when she structured your investment portfolio in the first place. Please enjoy reading our most recent quarterly review o
As we enter the new year 2019, and with US stocks having outperformed non-US stocks in recent years albeit the most recent market tremors in the US markets, some investors have again turned their attention towards the role that global diversification plays in their portfolios. For the five-year period ending October 31, 2018, the S&P 500 Index had an annualized return of 11.34% while the MSCI World ex USA Index returned 1.86%, and the MSCI Emerging Markets Index returned 0.78
After a spike in volatility in Q1 2018, markets had been benign until the beginning of October 2018. But investors' collective nerves have been shaken recently with increased volatility and downward pressure over the past 6 weeks. Should this really worry you? The S&P 500 index found its high for the calendar year 2018 on 20 September 2018. But investors received quite a bit of a scare over the subsequent 11 weeks and woke up to a level of the S&P 500 index on 7 December whic
Academic research has unearthed time and again that a disciplined investment approach is the key to investor success. How do you instill discipline? By building an evidence-based, low-cost index fund portfolio based on the insights of Nobel Laureates. After all, relying on somebody who has actually shaken hands with the king of Sweden in Stockholm while wearing a penguin suit is the ultimate crown for academic credibility. As a corollary, discipline is instilled in investors.
Most readers will have noticed that a branch of Economics called “Behavioural Economics” entered the realm of scientific research in the mid to late 1970s. In fact, Professors Kahnemann and Tversky wrote one of the earliest research papers on the topic in a 1979 Econometrica publication, titled “Prospect Theory: An Analysis of Decision Under Risk”, where they challenged the neo-classical assumption of perfectly rational market participants (the good old super-rational “homo e