Investors too often focus solely on dividends, when they should consider a combination of dividends and share repurchases. In a decade-long spell of low interest rates, public companies have strong incentives to reconsider their capital […more]
“High risk” stocks, based on smaller market caps and higher levels of leverage, outperformed the overall US market by nearly 11.4% on a cap-weighted basis in Q2. This is attributable to improving investor expectations regarding a “v-shaped” recovery following significant underperformance of “high risk” stocks in 2020 Q1 by -22.0%. […more]
Tracking Valuation Hazards: How risky are markets today? During the Covid-19 pandemic, tech and other internet companies have routinely seen good performance as consumers have been forced to work from home, isolate and disregard certain […more]
Big 5 companies surge in index concentration… what will be the effect on style boxes and cap-weighted portfolios?
The recent surge has notable impacts on commonly-used style index construction methodologies. Due to the increased reliance on passive allocations, investors should be aware of the significant distortions regarding style index diversification and skews in the classification assigned to individual stocks. […more]
Are the Big 5 stocks in S&P500 (FAAMG) overvalued?
Despite concentration levels unseen since the early 1970s, this group of 5 stocks currently offers reasonable valuation characteristics. The valuation characteristics of these five stocks warrants ongoing monitoring to ensure valuation does not deteriorate. […more]
Today the irony continues, as the intellectual foundations in financial economics that underpinned Bogle’s incredible success are much less robust than they appeared in the early 70’s, yet the push for passive investing is stronger and more fervent than ever. For proactive, process-oriented, intelligent advisors this will create a great opportunity to distinguish yourself from the growing herd of “commodity” advisors who preach little more than fee minimization, rather than alpha generation or negative alpha avoidance. […more]
The largest few companies in the US have dominated performance over the past 4-5 years. The recent Covid-19 pandemic has intensified this trend in recent months. In particular, the largest five companies the in US […more]