Archive for March, 2006

Rebalancing (without tax considerations)

Friday, March 31st, 2006

A recent paper “Rebalancing for Tax-Deferred Accounts: Just Do It, Don’t Worry How” in the FPA Journal discusses 21 different technique of re-balancing and tries to quantify which technique is better. According to the authors, it turns out that, … given our assumptions, none of the techniques tested here are clearly superior when evaluated solely [...]

Perfect market timer?

Friday, March 31st, 2006

We all know that holding stocks for the long run is the recipe for wealth accumulation. According to MIT Professor Andrew Lo, $1 invested in the S&P 500 index on 1/1/1926 would have grown to about $4000 by the end of 2005. Not bad considering that $1 invested in the aggregate bond market over the [...]

End of bond yield curve inversion?

Thursday, March 30th, 2006

With the most recent Federal Reserve target rate hike to 4.75% on 3/28, the yields of longer-term bonds are finally moving up. As of this moment, it sure looks like the percularity of the inverted bond yield curve is ending.