bam alliance

Simple Financial Solutions Often Beat the Complex Ones

“Can it really be that simple?” Over my career, I’ve heard these words from so many people. Clients, friends and family all just assumed that the process of financial planning needed to be complex. This assumption doesn’t surprise me. The traditional financial industry is built, in large part, on the notion that complexity equals quality….

What is prime broker?

Quick Take on Fixed Income April 2015 Q: What is prime broker? A: A prime broker essentially allows clients to trade through an omnibus account at the various custodians. Trading through such an account allows clients to remain anonymous, not only protecting their privacy but also making the trading process more efficient and less prone…

Comparing DFA Small Value to Vanguard Small Value

Over the past few months, the difference in historical performance between DFA Small Value (ticker: DFSVX) and Vanguard Small Value (VISVX) has narrowed. For example, for the 10-year period ending December 2014, the compound annual return of DFSVX was 7.9 percent while VISVX earned 8.3 percent. Comparatively, for the 10-year period ending December 2012, compound…

A Mystery in Hedge Fund Investing

When I look at hedge funds, there are three data points that keep bothering me. They create a pattern that doesn’t make a lot of sense. I hope you can help me understand what I’m missing. 1. Hedge fund performance has been terrible. In 2014, the Barclay Hedge Fund Index returned 2.88 percent. In that same…

Deflation and Stock and Bond Returns

Overview: With expected inflation rates very low, there will be significant attention on the possibility of deflation causing the stock market to fall. This blog examines the relationship between the rate of inflation and stock and bond returns. Generally, the research shows that stock returns are no lower in deflationary environments than in normal inflationary ones….

Rethinking Money, Not as Good or Bad but as a Tool

Almost everything we’re taught about money is focused on spending it and saving it. Parents, teachers and even personal finance books discuss saving money as keeping it, increasing it and controlling it. Saving money involves figuring out ways to get more of it, to build a bigger cushion. We’re taught that’s the ultimate goal. In…

How Adam Smith Can Change Your Life

Author Russ Roberts takes an interesting tack in his new book, “How Adam Smith Can Change Your Life.” While Smith’s most famous tome, “The Wealth of Nations,” has been most popular in economic and investor circles, his other volume, “The Theory of Moral Sentiments,” contains some of the venerable writer’s most valuable insights. One of…

What are the risks of alternative yield-seeking strategies?

Q: What are the risks of alternative yield-seeking strategies? A: Replacing a portion of your high-quality bond or bond mutual fund holdings with strategies ranging from high-dividend stocks to oil-and-gas master limited partnerships because “rates are low” involves taking on substantially more risk. A more efficient way to increase your level of risk is to…

A 4-Step Process to Integrating Money and Life

Once you’ve abandoned the pursuit of balancing money and life in favor of integrating the two, the question still remains: Now what? How the heck do I better integrate money and life? Like most personal finance dilemmas, the answer is simple, but not easy. It’s simple because it doesn’t require many steps. What’s more, it’s advice you’ve likely heard before, perhaps multiple…

Making the Most of Resolution

You’ve heard that New Year’s resolutions have a horrendous success rate, right? One source suggests the number is as low as 8 percent … 8 stinking percent. But why? Is it for a lack of resolve? Somehow, I don’t think that’s it. It took a heck of a lot of resolve for your nephew to conquer the…

©2024 JMF Capstone Wealth Management