At the turn of the 21st century the majority of mutual funds that invested in equities (stocks) utilized what is called active management. That is, fund managers chose some subset of all publicly-traded companies in which to invest and also decided when to rebalance the various positions held in the fund. The purpose was to…
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The short answer is yes. If a mutual fund or exchange-traded fund (ETF) becomes unprofitable, fund company management may choose to shut it down. And given how competitive the fund market is, with well over ten thousand funds available today, this happens more often that you might think. What are the risk factors? One of…
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I previously wrote about the impossibility of successfully beating the S&P 500 through market timing. But many people are still afraid to invest in stocks, especially when the market is setting new highs, for fear of buying just before a major market drop. If you can’t time the markets, what can you do to avoid…
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Of all the schemes investors have come up with to try to avoid losses and/or to beat the market, market timing is probably one of the most seductive. It seems obvious that when something significant occurs in the U.S. economy or elsewhere in the world, you’d expect the market to react accordingly. Wouldn’t that be…
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Tune in to any news channel on TV or pick up any newspaper and the one U.S. stock market benchmark that you will inevitably find reported is the Dow. Yet the Dow – more formally called the Dow-Jones Industrial Average (DJIA) – is not especially representative of the broad stock market. Or for that matter…
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The stock market has been very generous to investors since the recession of 2008. Over the past 15 years the S&P 500 large cap index rose 13.9% on average each year (source: Morningstar). The same, however, cannot be said for smaller company stocks. The Russell 2000, a popular small cap stock index, grew only 10.4%…
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