Saturday, April 14, 2012

Lower Equity Returns The New Norm? Think Again.

David Booth of Dimensional Fund Advisors does a great job of explaining market cycles.  There is no evidence that current investor sentiment has predictive power for future returns.  A case can actually be made that investors are usually wrong and we should expect higher than expected returns in the years to come.  Either way a properly diversified portfolio will still be the best way to reach your long term goal.

Tuesday, April 10, 2012

The Secret to Predicting Mutual Fund Performance!

By Eric Burkholder

There is a very good article out today on  "You are the best predictor of next bull or bear" The title is misleading but the theme of the article is this:  There is no evidence that any person or any expert has any ability to predict mutual fund returns or forecast the economy.  Actually, an even better summary of the article is in the affirmative: There IS significant evidence that traditional performance metrics cannot reliably predict mutual fund performance and there IS significant evidence that experts do a very poor job of predicting turning points in the economy.