Category: Investing

REITs, Rates, and Returns

Interest rates are on the rise and Real Estate Investment Trusts (REITs) have been struggling. The iShares U.S. Real Estate ETF (IYR) has fallen nine straight days, the longest streak since its inception in 2000. If you listen to the pundits, they will tell you that rising rates are the culprit. You’ll often hear that higher […]

Investors on election night: “serenity now.” Investors today: “zzzzzz.” Since mid-December, we have witnessed the most peaceful market in history. The S&P 500 has now gone 54 consecutive trading days without a 1% intraday move (high to low as a %), trouncing the prior record of 34 straight days from back in 1995. When I […]

Why You Diversify

Concentration: the fastest way to build wealth and the fastest way to destroy it. To have any chance at “getting rich quick,” you need to hold a concentrated portfolio. But chance is the key word in that sentence, for you may instead get poor quick. Concentration risk isn’t limited to holding a single security. It […]

Momentum in Name Only

“The premier anomaly is momentum.” – Eugene Fama and Kenneth French There is momentum in theory and there is momentum in practice. Momentum in theory is the premier market anomaly. Momentum in practice is a bit more complicated. What is the look-back period (3 months, 6 months, 12 months, etc.)? What is the rebalance frequency […]

The Other Side of Uncorrelated

In a meeting last year, an experienced investment advisor explained to me what he looks for in an “alternative” strategy: “Low correlation, low volatility, no downside, and high returns. I want to have my cake and eat it too.” That is a verbatim quote. The advisor went on to tell me story after story on […]