Posts by Darryl H

In recent years financial pundits have declared that the 60/40 portfolio is officially dead and can no longer provide a stable stream of income from its component parts, 60% stocks and 40% bonds. The rationale behind declaring the death of this commonly used allocation is that bond yields are so low that allocating 40% of…

For the average retail investor, trying to understand the financial markets can be extremely overwhelming but it should not be. The first thing that any investor should understand about financial market commentary distributed through any form of media is that it is often not relevant to most personal situations. The only use for such information…

For all Investors, whether retail or institutional, fundamentals should be driving the bulk of your decisions when it comes to stock picking. The goal is to buy stocks whose potential for growth is greater than the broader market, otherwise you should just invest in a broad market index like the S&P 500. Our goal here…

For most investors, simplicity is better. However, far too often investors have either too many investment strategies or no strategy at all. One of the major drawbacks of having multiple equity strategies is that it is not necessary, confusing, and can be more costly. It is understandable why a family of mutual funds would have…

First, what is a back-test? A back-test is going back in time to evaluate an investment strategy that you think can provide returns greater than the broad market as defined by the S&P 500 or another popular index. There are software programs out there that allow you to back-test a strategy. However, if you have…

The debate continues about whether it is possible to outperform the S&P 500 over time. At Investoristics, we think the answer is yes especially if your approach is based on common sense and is grounded in investment fundamentals. In a recent article, we discussed our view on the number of stocks most investors need for…

How many stocks do you need to diversify your portfolio for adequate protection.  Well, it depends.  If you know what you are doing, say some, then you only need a dozen stocks or less in your portfolio.  Warren Buffett is famous for saying that “Diversification is protection against ignorance.”  We won’t get into that debate,…

Most are familiar with the phrase, “Past performance is no guarantee of future results” which simply implies that just because your investment strategy did well for 18 years doesn’t mean the success will continue.  So why does everyone want to know how well a strategy has done in the past if it doesn’t guarantee future…

The literal answer to this question is probably yes but, unfortunately, not because you have experienced extremely high returns. With the exception of “do it yourself” investors or high net worth individuals, for efficiency, the investment strategy recommended by your adviser is most likely predetermined and selected from a chart of strategy ideas which are…

When market returns are well above the average there is likely to be a reversion to the mean but as a long-term investor what should you expect? There have been 34 times since 1926 that the S&P 500 has returned 20% or more through 2018. The average total return since 1926 through 2018, for 5-year…