The rise of indexing has crossed a new threshold. Passive strategies now make up more than 50% of all investment assets. Recent reports show we’ve crossed the Rubicon of passive vs active investing. Indexing has won! The reasons are clear: indexing outperforms active management most of the time. And, its much easier for investors to achieve better returns with less...
The evolution from index to factor-based investing has become increasingly nuanced. Investors are recognizing a deeper understanding of market dynamics and investor behavior. Initially, the widespread adoption of index funds in the 1990s was largely attributed to the Efficient Market Hypothesis. This theory posits the stock market's efficiency made it rare for active managers to consistently outperform passive benchmarks. However, as...
Investment Memos highlight the distinction between well-considered financial decisions and hasty gambles. This unassuming yet powerful tool is pivotal in crafting a disciplined investment strategy, one that is guided by clear governance and a consistent decision-making process. Rather than by feelings and emotions. This post will describe how investment memos are a powerful tool for serious investors who support accountability....
As the thrill of quick gains often grabs headlines, passive investing emerges as the silent giant, embodying the virtue of patience in a race paced by speculation. It's the strategy that champions the adage "slow and steady wins the race," turning a deaf ear to the siren calls of market timing and rapid trading. Surprisingly, passive investing often beats the...
It's a common misconception that average investors will earn an average rate of return. Unfortunately, the reality is far from this ideal. Multiple factors contribute to the disconnect between the expected return and the actual return that the average investor achieves. The average market return can be achieved by investing in passive index funds. Surprisingly, the returns of simply “buying...
A Core-Satellite portfolio approach breaks down an investor's portfolio into two main components: the "core" index funds and the "satellite” active components. The core typically consists of a broad-based market index or a diversified fund that seeks to mimic the returns of the whole market or a benchmark. This core is expected to provide diversification and represents a large chunk of...
In the ever-evolving world of investment strategies, it’s easy to get lost amidst the myriad of complex theories and tactics touted by experts. Yet, time and again, history has shown that there’s profound strength in foundational principles. At the heart of these principles lies the concept of buy-and-hold investing. This approach not only champions the virtue of patience but underscores...
In the era of digital trading platforms and zero-commission brokers, investors have never had it easier. With tools at our fingertips and little to no fees, we have the luxury of making stock market investments efficiently. However, with all these resources, a staggering number of both novice retail and seasoned professional investors still fall short of outperforming passive benchmarks. How...
For many family offices, Excel has been the go-to tool for creating consolidated reports due to its customization, accessibility, and cost-effectiveness. However, as the complexity of investment portfolios grows, family offices often encounter challenges related to data integrity, analytics, and scalability. Excel's limitations become apparent when dealing with large datasets or non-traditional assets like real estate, private equity, art, impact...
Many Canadian charitable foundations hold US stocks in their investment portfolio. However, it's essential to understand the application of US withholding tax for Canadian registered charitable foundations in the context of the US-Canada tax treaty to minimize exposure to this tax. And as this post will explain, there's a common mistake many foundations make when structuring their investments that exposes...
