Bond investing in a rising rate environment can often be an exercise in patience. As rates rise, it can be difficult watching principal values decline. Just as you don’t want to sell equity positions at the bottom, it is important to not panic and sell your bonds as rates increase (and prices decline). Ultimately, it is important to...Read Post
The Wall Street Journal recently ran a series of articles regarding active and passive management, declaring “investors are giving up on stock picking” and instead are “flooding into passive investment funds.” (See “The Dying Business of Picking Stocks,” The Wall Street Journal, October 17, 2016.) Certainly, the flow of funds into passive investment vehicles is indisputable. Investors have added nearly $1.3 trillion to passive funds over the past three years, while more than a quarter trillion dollars has exited actively-managed funds over the same time period. Investors clearly have accepted the narrative that passive investment vehicles, due to their low cost structures, outperform actively-managed investment vehicles, on average.Read Post
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