Christine Benz at Morningstar.com has “seven ways to simplify your investment life.” We believe a vast majority of investors do not do the following:
Jot Down Why You Own Each Investment
Simplification gurus preach that writing down our goals helps us organize our lives to meet those goals. The same can be said for investing: By writing down why you made an investment in the first place, you’re more likely to make sure that the investment meets its original goal. If it isn’t doing what you expected by sticking with a specific investment style and producing competitive long-term returns, you’ll be ready to cut it loose.
Dan Culloton at Morningstar.com examines the topic of the relative tax-efficiency of mutual funds and exchange traded funds. The bottom line:
ETFs have been much more tax-efficient, as measured by Morningstar’s tax-cost ratio, than the typical conventional mutual fund. A few exceptions, however, show that ETFs’ tax advantage, while large, is not unassailable.
We are happy that Roger Nusbaum tried to make sense of a pair of dueling columns on the nature of the gold market.
Shawn McCarthy at the Globe and Mail talks with Boone Pickens about the oil market and the role of the Canadian oil sands, in short, “I don’t think you are going to see $50 oil again.”
Keenan Skelly at InstitutionalInvestor.com on the rise of the multi-strategy hedge fund at the expense of hedge fund of funds,
Multi-strategy managers are receiving increasing attention from sophisticated pension funds that want high returns without the extra layer of fees charged by funds of funds. This complex asset class isn’t for everyone, however. Multi-strategy hedge fund managers switch tactically between various strategies to take advantage of opportunities, but this can make their exposures difficult to track and can hinder transparency.
Paul Kedrosky at Infectious Greed notes the escalating war of words between Harvard and Yale on the nature of compensation for endowment managers.
In a follow-up to this BusinessWeek piece, Andrew Lo makes an interesting statement to Chris Farrell,
Economists suffer from physics envy. We would all love to have three laws that explain 99% of economic behavior. But it won’t work…. Neoclassical economics works really well in some areas. But in the financial markets, neoclassical economists have failed miserably. The efficient-market theory has been rejected.
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