Zack Shepard's blogSanity

So true…

Fri, 27 Aug 2010 09:38:40 -0400

So true…

What could be more fun than a video that includes the Cato...

Wed, 04 Aug 2010 16:13:35 -0400

What could be more fun than a video that includes the Cato Institute, John Stossel and investing? Nothing, check it out.

John Stossel on Capitalism. Brilliant.

Thu, 08 Jul 2010 10:32:32 -0400

John Stossel on Capitalism. Brilliant.

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Wed, 30 Jun 2010 12:22:02 -0400

This latest video is a brief discussion on the Sovereign Debt...

Thu, 03 Jun 2010 11:18:46 -0400

This latest video is a brief discussion on the Sovereign Debt Crisis and what this Doom and Gloom hype means to investors portfolios.

“I want to sell a “b”illion shares. No wait,...

Mon, 10 May 2010 15:28:12 -0400

“I want to sell a “b”illion shares. No wait, I meant a “m”illion…whoops.” That’s what you call a spike. This is a snapshot of what happened to P&G stock in a matter of seconds because a trader accidentally typed a “b” instead of an “m” when submitting the trade. Still think the market isn’t efficient? Think again. It washed out that news out of the stock price before anyone could react.

Style drift by a mutual fund manager can kill a...

Wed, 21 Apr 2010 14:22:44 -0400

Style drift by a mutual fund manager can kill a portfolio’s performance and can cause an investor to end up with a portfolio that is far greater or less than their market exposure intentions. Check out this latest video that explains how this happens.

How do you really alleviate fiduciary responsibility? Flashy...

Thu, 15 Apr 2010 09:49:00 -0400

How do you really alleviate fiduciary responsibility? Flashy marketing gimmicks and tricky language are not the answer.

A little Wednesday humor…

Wed, 14 Apr 2010 14:55:16 -0400

A little Wednesday humor…

What do you do when your fund has terrible performance and you...

Wed, 24 Mar 2010 16:28:04 -0400

What do you do when your fund has terrible performance and you don’t want to close the fund? Watch this segment called “A Lesson in the Life of a Fund Company” to find out how Legg Mason did it!

Those pesky target date funds are at it again. I didn’t...

Thu, 11 Mar 2010 10:22:00 -0500

Those pesky target date funds are at it again. I didn’t know it was possible for them to become worse, but they have taken a step in that direction. Check out this video where we discuss on Matson Money Live.

Want to know where all the TARP money is? Check out this pic....

Wed, 24 Feb 2010 12:56:53 -0500

Want to know where all the TARP money is? Check out this pic. Click the image for a larger view. Great job from Visual Economics on this graphic.

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Thu, 18 Feb 2010 14:26:28 -0500

Building on one of my recent video posts regarding market...

Mon, 15 Feb 2010 15:24:00 -0500

Three Equity Factors

Size and Value Premiums

Two Fixed Income Factors

Building on one of my recent video posts regarding market premiums and where they come from, this post shows what the premiums are, where those premiums come from and how they are managed.

In the first image, you have three equity factors: sensitivity to the market, sensitivity to size and sensitivity to BTM (value stocks). This image explains that there are known historical premiums for being in the market vs. fixed income, owning small companies vs. large companies and owning distressed (value) companies vs. growth companies.

In the second image, you can see that these premiums exist in the US and internationally and are very generous over long historical time periods. One thing to keep in mind here is that with additional premium comes additional risk, therefore diversification is key so as to minimize the risk associated with these asset categories.

*In US dollars. Developed markets value and growth index data provided by Fama/French (ex utilities). The S&P data are provided by Standard & Poor’s Index Services Group. US Small Cap Index is the CRSP 6-10 Index. CRSP data provided by the Center for Research in Security Prices, University of Chicago. International Small Cap index data: 1970-June 1981, 50% UK small cap stocks provided by the London Business School and 50% Japan small cap stocks provided by Nomura Securities; July 1981-present: simulated by Dimensional from StyleResearch securities data; includes securities of MSCI EAFE Index countries, market-capitalization weighted, each country capped at 50%. MSCI data copyright MSCI 2008, all rights reserved.
Indexes are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Compound returns have an assumed rate of return, are hypothetical, and are not representative of any specific type of investment. Standard deviation is one method of measuring risk and performance, and is presented as an approximation.

In the third image, you can see two ways to manage fixed income in a portfolio. Fixed income should be utilized in a portfolio to reduce or dampen equity risk. Keeping maturities short and high quality is how you achieve this in a diversified portfolio. What most people don’t realize when it comes to their investments is that as maturities lengthen in fixed income, it actually becomes as risky as stocks they hold. Therefore, you should take the risk in equities since their expected returns are greater than fixed income.

An overall portfolio strategy utilizing these tools would beneficial to any investor, but utilizing an investor coach to implement and stay disciplined is the key to a successful investing experience.

Check out Mark Matson on “The Call” with Larry...

Fri, 12 Feb 2010 14:57:09 -0500

Check out Mark Matson on “The Call” with Larry Kudlow. Great segment with superb points about markets and investing.

One word - Premium. That is what the Three Factor Model is...

Mon, 08 Feb 2010 14:11:00 -0500

One word - Premium. That is what the Three Factor Model is about. If you are going to invest in the market, invest in asset categories or sections of the market that add premium to a portfolio. Market/Size/Value. Watch the video for an explanation.

The $3 Trillion 401(k) Rip-Off

Wed, 03 Feb 2010 17:17:48 -0500

The $3 Trillion 401(k) Rip-Off:

Click the title to read an article by Dan Solin discussing the mismanagement of 401k assets by investment providers and plan sponsors. Many plan sponsors have no idea that they are personally liable for the investment decisions they make on behalf of their participants. It’s very easy: diversify globally, stay prudent and rebalance yet the lack of providers out there offering this type of vehicle makes it very hard to accomplish.

"An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t..."

Tue, 26 Jan 2010 10:00:00 -0500

““An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.””

- Unknown

How is it possible that someone like Jim Cramer can get things...

Mon, 25 Jan 2010 11:42:29 -0500

How is it possible that someone like Jim Cramer can get things so wrong and still have people listen to their advice? Quote from Navigating the Fog of Investing movie from an old proverb: He who predicts the future lies, even if he is telling the truth.

Seven Shocking Tips to Boost Your Returns by 400% (or More) - DailyFinance

Thu, 21 Jan 2010 12:18:41 -0500

Seven Shocking Tips to Boost Your Returns by 400% (or More) - DailyFinance:

Every investor needs a coach in order to be prudent and stay disciplined while investing in the market. This article by Dan Solin adds great support. Definitely worth a read.