Why does value investing work? Why do other factor strategies work? For that matter, why does any active strategy — meaning, any strategy other than cap-weighted indexing — “work” in the sense of having a reasonable chance of beating the cap-weighted index other than by random variation?
This piece collects perspectives from various industry leaders reflecting on Jack Bogle's contribution to the financial services industry over his long and illustrious career. As the world markets fluctuate and fund managers fight to gather assets, it is worth reflecting on the state of the fund management industry now, which was largely disrupted by Jack Bogle.
As life expectancy increases around the world, investors may soon realize that with longer life also comes a longer liability. Retirement occurs well beyond the "age of 65" as countries around the world increase the retirement ages and eligibility for governmental retirement assistance programs. 2017 Nobel Prizer winner and University of Chicago Booth School of Business Professor Richard Thaler puts it succinctly, "You have to worry about getting unlucky and living to 100."
Given the inherent conflict of interests in the financial adviser industry, since there seems to be a regulatory gap in Asia, the burden falls upon investors to understand the investment management industry. Unsurprisingly, most investors prefer to use simpler assets as store of wealth, such as bank deposits, certificates of deposit, or even real estate.
Many investor portfolios are propelled by assets tied to economic growth. Over the past two decades, increasing emphasis has been placed on reaching for ever higher returns, with the result that portfolios have become even further skewed toward growth assets. Diversification, a powerful force in portfolio construction, has been hobbled by high common risk factor … Continue reading Preparing a Multi-Asset Class Portfolio for Shocks to Economic Growth