Portfolio Design
Portfolio design—the composition of your portfolio, the asset classes you buy and in what
proportion—is the most critical issue faced by an advisor and a client. Portfolio design
balances risk and return mathematically to achieve the best possible return at a comfortable
level of risk and is the single greatest determinant of investment success...
Download now | Bringing Value
In the up-and-down drama of the stock market, where the media pits asset classes against
each other for world domination, the value-growth battle has a decidedly moral tone.
Depending on which side you’re on, value companies are either the hope of tomorrow or the
hopeless of the world. To read the hype, one would hardly guess that value and growth are
simply mathematical classifications...
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Commodities
When Alexander Pope said “a little knowledge is a dangerous thing,” he could have been talking about commodities investing. We think we know commodities—pork bellies, soybeans, and the like—but commodities investing is a much different animal.
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Emerging Markets: Harnessing the Power of Volatile Asset Classes
As the century began, most investors were cautious about investing outside the U.S., particularly in Emerging Markets. Emerging Markets were vague, unfamiliar, far-off places most known for cheap labor. But oh, what a difference a few years make. After five years in a row of leading the stock market, U.S. investors now view Emerging Markets as vague, unfamiliar, far-off places….most known for high returns...
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Stock Investing and Recessions
Current market volatility has risen dramatically—not to historic levels, but far above the “goldilocks economy” (not too hot or too cold) of 2004-06. Volatility has been called a reflection of the stock market’s perception of an imminent recession. But is it? People assume that when the GDP (Gross Domestic Product, the determinant of recession) is
down, the market will follow. But the economy is full of indicators. If they all moved
together, we would need only one. The economy is much more sophisticated, and so
investors must be as well...
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Portolio Longevity: Maximizing Distributions During Retirement
Science benefits all of us by replacing our hunches of how we think things ought to work with
the facts of how they really do work. Sometimes science confirms our hunches. However, in
investment science, as we have often said, the shift from theory to fact can be seismic.
Nowhere is this shift more noticeable than during the time leading up to and after retirement.
This is an area which has received comparatively little research, thus leaving investors’
hunches mostly intact...
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Techniques of Quantitative Investing
When average investors think of fund management styles, they usually think of passive and
active. However, there is a third style which has rewarded Mercer Advisors investors for many
years: Quantitative...
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