Combining a year’s worth of cash with a long-term investment portfolio protects immediate needs while still enabling the portfolio to grow. Given the headwinds of inflation, return sequence, and a low return environment, what’s an investor to do? The traditional income portfolio...

Exchange-traded funds (ETFs) have been one of the most successful financial innovations in recent years. Since the introduction of ETFs in the early 1990s, demand for these funds has grown markedly in the United States, as both institutional and individual investors have increasingly...

A sustained increase in the stress hormone cortisol leads to both a reduced tolerance for risk and an increased preference for perceived safer, but lower-return outcomes. This physiological response to stress may be a contributing cause to financial market instability, particularly...

Charles Rotblut (CR): I’d like to discuss allocation, starting with rebalancing. A lot of people either psychologically have a problem doing it or just won’t do it. What are your thoughts? William Sharpe (WS): I think, by and large, people probably shouldn’t do it. In particular,...

Exchange-traded funds (ETFs) have been one of the most successful financial innovations in recent years. Since the introduction of ETFs in the early 1990s, demand for these funds has grown markedly in the United States, as both institutional and individual investors have increasingly...

For many years, I conducted an AAII Stock Analysis seminar in which I presented a variety of techniques for analyzing and valuing stocks. Beyond presenting specific techniques, I also discussed ways to remove emotions from a decision process. Now that I manage money professionally...

I once interviewed a successful exchange-traded fund (ETF) sponsor and had the temerity to offer some suggestions where some ETFs were needed. The response from this person was: “Look, we’re not interested in filling needs as much as we are in building a business.” This...

Whether or not a person contributes to a 401(k) plan may influence his or her health. Commenting on their study of employees with access to company-sponsored wellness testing, Timothy Gubler and Lamar Pierce of Washington University said they found that “retirement savings and...

There are eight tried-and-true key fundamental factors that drive stellar stock price performance and have stood the test of time. Read more » ...

The liquidity composition of a fund’s underlying assets, the historical tracking error and fees are important characteristics to consider when investing in an ETF. ETFs are one of the fastest-growing investment vehicles, with total assets reaching $1.4 trillion in 2012 (Figure...