securities

Don’t Let Home-Bias Investing Trip You Up

The total U.S. stock market has gained over 20% during the past year and is doing great. But for U.S. investors that are under-weighted to foreign stocks, it’s not so great. Why? Because foreign stocks have convincingly outperformed U.S. equities, thereby causing a performance deficit. What’s the problem? The tendency of investors to concentrate and …

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Does Diversifying Damage Performance?

During the 1849 California Gold Rush people sold all their possessions to chase gold (NYSEARCA:IAU). A small minority hit the jackpot, but most did not. Back then, the few people that did get wealthy by not diversifying were the hyper-extreme exception, not the rule. And it’s the same today. In retrospect, investors that overstuffed their portfolios …

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Portfolio Chart 1

Q&A: How do Foreign ETFs Track their Assets When Markets are Closed?

Q. Trading hours in Asia (NYSEARCA:VPL) and Europe (NYSEARCA:FEZ) don’t coincide with the U.S., so how are ETFs that own foreign securities still able to closely track their indexes even when trading in these securities may be closed? A. Price discovery is an around the clock 24-hour process and capital markets constantly add information that can change the …

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Do Regulators Encourage Market Manipulation?

The latest episode of stock market cheating by high-frequency traders (HFT) has set in, yet unanswered questions remain. Do regulators like the Securities and Exchange Commission (SEC) encourage market manipulation? Manipulation refers to the dishonest activity by individuals or institutions who try to game the price of a stock (NYSEARCA:IVV) or a certain market for their …

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