Mutual Funds

Is the Market Overvalued?

You keep hearing that, because stock market valuations are so high lately, that a downturn is imminent. But this is not necessarily the case. The often-used P/E ratio, which measures valuations and now is on the high side, is not always the best market bellwether.

It’s likely you’ve seen some version of this headline, and wondered what truth it holds:  “Stock Market’s High Suggests Lower Returns AheadForbes, June 18.

Bullish: Stocks’ Jagged Rise

The second quarter of 2014 is in the books, and goes down as another positive period for the U.S.

Finding Long-Term Stocks

A constant mantra in the investment world is that it pays to own good stocks for the long term. The question is: How do you find these long-term winners? This is very difficult, as the most recent quarter illustrates. Let’s examine the field.

How to Tap the Energy Boom

Odds are that the U.S. energy renaissance now under way will continue for some time. That means investing in energy companies should bring a bountiful result. But the menu of possibilities is dauntingly large. What works best? One answer: natural gas and an investment vehicle called a master limited partnership.

Is Smart Beta Smarter?

The market has a new tool to supposedly boost returns using smaller companies’ stocks. Smart beta isn't necessarily small stocks, though, and figuring out how this idea works – and if it works at all – is your first step before banking on it.

Smart beta (or whatever you want to call it) hinges on investors’ easing off the traditional market capitalization-based indexes in search of fatter returns and lower costs. On the whole, it’s a great idea – no rule says that market cap-weighted indexes are the best way to go.

Massive Sell-Off? Unlikely

Fewer investors own stocks these days. The upside: Lower equity ownership lessens the likelihood of a massive sell-off. This is pertinent now in light of the market’s recent dip, with the Standard & Poor’s 500 down for July.

Plus Sign: Low Correlation

Here’s some love for the most unloved bull market in history. Different asset classes are not moving together, as they did for most of the last few years. That lack of correlation, when one set of assets zigs as another zags, is a positive sign because it is typical of secular bull markets.

Questions About Alternatives

Alternative investments are all the rage these days. Think through all the details, though, before deciding if they fit your financial plans.

Mutual fund companies fall all over themselves to sell financial advisors and their clients on “liquid alts” easily bought or sold or on hedge fund-like strategies with the daily liquidity offered in a mutual fund wrapper.

Advisors and Better Returns?

Can you quantify a smarter way to own mutual funds? Vanguard Group thinks so. It believes you – and specifically your advisor – could add more than three percentage points to your returns by adopting seven principles.

Vanguard, which specializes in low-costs index funds, recently published a report that lists the seven value-added types of advice that advisors can use to potentially fatten your performance. To make their idea a reality, of course, you need to choose the right fund manager.

Bull Market: Room to Run

Just because we’ve had a five-year rising market doesn’t mean its demise is near. We are in the fifth inning of a nine-inning long-term secular bull market in stocks, comparable to the 1982-1999 run. So declares Joseph Zidle, portfolio strategist for Richard Bernstein Advisors.


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