Larry Swedroe

My Take on This Very Risky Market

EX15:26
Re the life insurance. I never said ALL life insurance. I specifically referred to a company that is not the highest rated. I own a policy with Mass Mutual, a very strong company. Different situation

Also wasnt claiming to share "anything" new. Just trying to explain what is happening in clear English so ordinary people could understand it, and talk about what IMO is the prudent response.

Reverse Convertibles: In Favor of the Issuer, Not the Buyer

user172202
Nothing wrong or inconsistent here
The first point only stated that the SD of individual stocks is much higher than the market and the value of a put is partly based on volatility.
The second and independent point is that the combination of the high volatility and negative skewness create the potential for large losses. Something investors seem to miss.

The Way Smart Money Diversifies Risk

BTW-Smart money doesn't pay active managers (or hedge funds,etc) to invest. Smart money uses passive investment vehicles like Vanguard index funds, ETFs, and DFA's passive asset class funds. The evidence on why is presented in this book and in my other six, for those interested.

The Way Smart Money Diversifies Risk

The "benefits" of the variable annuity cited are far more expensive than can be obtained by other means---obtained more efficiently.

That is one of the things we do in the book. We show how while some investment might look okay, there are better ways to achieve the same result. Example, junk bonds are totally unnecessary and the higher expected returns are better obtained (for variety of reasons) by simply adding bit more equity risks (beta, size +/or value) and then using Treasuries or better TIPS.

The Way Smart Money Diversifies Risk

On International investments: if you read the book you will see that we don't really consider international equities as alternative asset class. Having said that, we know that most investors, even those that invest internationally, limit the investments to large caps. We show that to get the real benefits of international diversification you should invest in international small, small value and emerging market equities.

On Variable Annuities: we don't call them an asset class (and hedge funds, venture capital and lots of other investments we discuss are not asset classes either). They are however investment vehicles. And the book is about alternative investments. We also show why basically they should be avoided.

Market Lessons From 2007

mfi.morningstar.com/fs...

ETF Investing Guide: Financial Advisors

I did not miss anything

First I refuse to work with an attorney or accountant based on hourly rates. that makes the basic error of confusing efforts with results. I pay for value added not work effort.

Why would I care how long it takes someone to give me an answer.

The same is true of investment advice. The fee IMO should be related to the value of the service. If someone saves you 25bp per annum and you have $10mm in assets did not that add more value than if you had $1,000 in assets?

There are other reasons why IMO an hourly relationship is not in the best interests even of the client. I know many people would not pick up the phone to get advice on issues they are concerned about because the meter is ticking. And I believe that there is also great value in developing trusted relationships based on getting to know the person---that doesnt happen when you have hourly relations because the client is watching the meter.

Foreign Currency Trading: Can Investors Profit From Trends?

Ikkyu
You invest because there is an expected risk premium for one thing. Another is because how an asset when added to a portfolio improves the overall efficiency of a portfolio.