In the last several months, it would have been hard to miss the flurry of articles discussing the flattening yield curve and likelihood that a recession is near. Here are just a few examples, “The U.S. Yield Curve Is Flattening and Here’s Why It Matters”, “Replace Yield Curve as a Recession Predictor? The Fed Considers […] Read the full article…
Today I would like to discuss my favorite ‘simple’ model for determining if the stock market is over- or under- priced, the real earnings yield or REY. If I could only have one piece of information to gauge the market value, this would be it! This model is also favored by a number of well […] Read the full article…
This is the third and final part of a three part series on Factor Investing. See also part 1 and part 2. We have introduced the concept of Factor Investing (or Strategic Beta). In this article, I will wrap up the series with a discussion on three topics: 1) what are my ‘favorite’ factors, 2) […] Read the full article…
In Part 1 of this three part series, I introduced the concept of factors and discussed how they may be used to help generate higher risk-adjusted returns. Since the early 90’s and the growth in popularity of the Fama and French 3-Factor Model, there have been hundreds of additional factors that have been ‘discovered’ by […] Read the full article…
This is Part 1 of a three part series. The efficient market hypothesis in financial economics holds that prices reflect all available information. An implication of the theory is that it is impossible to beat the market on a risk-adjusted basis. If the theory holds, the best investment strategy would be to buy a low […] Read the full article…
Today I want to explore a very interesting post written by Philosophical Economics found here. In the post, the author shows that there is a strong relationship between US investor equity allocation and future 10 year returns. In fact, he shows that past equity allocation explains greater than 90% of stock market returns. Using R […] Read the full article…
In part one of this series we reviewed the basic composition of the Vanguard Health Care Mutual Fund (ticker VGHAX) using Morningstar’s website. In this article, we will look at details related to the fundamentals of the fund as well as performance of the fund relative to benchmarks. Before moving on, I wanted to highlight […] Read the full article…
Morningstar is research firm that provides data and analysis on a wide range of investments including individual stocks, mutual funds and exchange traded funds. Morningstar serves retail clients as well as investment professionals. In this three part series, I want to provide investors with an educational review and critique of data available from Morningstar. My […] Read the full article…
In this article, I want to explore some of the quantitative tools we use at Brightwood Ventures to evaluation investment performance. We conduct performance assessments when we make investment selections for model portfolio implementation as well as ongoing performance monitoring. As a general rule, we are biased toward the use passive index investment funds, but […] Read the full article…