Invest Skeptically

In a previous post I alluded to the fact that most mutual funds are benchmarked against some broad market index instead of a style index. While style indices are interesting–and arguably more “correct”–the reality is that market indices are the standard comparison for marketing purposes and market index returns are the kind of data [...]

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The Horizons BetaPro “Plus” ETF products have been getting some positive press lately with Jonathan Chevreau writing, Looking for shelter in a bear market, Rob Carrick writing, Bear’s best friend: an ETF to profit from bad times, and Don Vialoux writing, Lure of leverage gives boost to new ETFs. These products attempt to [...]

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Chuck Jaffe at MarketWatch writes, Dancing with the stars, and warns mutual fund investors to take the Morningstar tools for what they are. The two examples he cites as misused/misinterpreted tools are the star rating system and the style box description.
His conclusion: “Use Morningstar’s tools as intended — as helpers, and not decision-makers — [...]

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Today’s entry is a bit experimental and so I’d appreciate any feedback you may have.
I’ve been reading lately of a number of interconnected issues and I wanted to try and fit them together in a simple picture. As such, I’ve put together a diagram of the interconnectedness between U.S. biofuel subsidies and inflation in [...]

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The most familiar indices, such as the S&P 500, are typically weighted by market capitalization (a notable exception being the DJIA which is an arithmetic average price). This means that larger companies like 3M get a proportionally larger weighting than smaller stocks like Paychex (just picked two companies at random). Market cap indices are [...]

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