market insights

The Momentum Effect in the Stock Markets

Jared Kizer is director of investment strategy for the BAM ALLIANCE. In 2008, Jared co-authored the book The Only Guide to Alternative Investments You’ll Ever Need with financial author Larry Swedroe. Jared has written several articles on topics including retirement planning and investment policy.

What You Should Know About Call Options

A call option contract gives the holder the right, but not the obligation, to buy a security at a predetermined price (the strike price) on a specific date (European call) or during a specific period (American call). A call is “in the money” when the current price of the stock is trading above the strike price and “out of the money” when the reverse is true.

Understanding Interest Rate Movements

Investors have been living with low interest rates from late 2008 through current times. Interest rates have been so low for so long that the recent upswing in rates caught many investors by surprise. From the beginning of the year through June 20, the 10-year Treasury rate went up by 0.67 percent from 1.75 percent…

Looking for Bubbles Everywhere

With the markets predominantly producing positive news so far this year, you would think that would have investors feeling optimistic. But are they? Carl Richards, director of investor education for the BAM ALLIANCE, senses what is known as the “wall of worry” on Wall Street — that the markets are doing well in spite of…

The High Cost of Bad Advice

In this article, we address why we believe the decision of hiring an advisor should not be based solely on fees. The quantity and quality of the services provided varies greatly from advisor to advisor. When you interview potential advisors, you should look for the advisor who gives the best advice and is the best…

Deciding Between Individual Bonds and Bond Funds

We use both individual bonds and bond funds for our clients. It can be confusing why one strategy for buying bonds is preferable to another, but in reality the reasoning is fairly straightforward: It comes down to costs, diversification and liquidity needs. Individual Bonds Our overall approach to investing emphasizes taking risk through a diversified…

2012: The Year it Didn’t Happen

Author: Weston Wellington, DFA Judging by the headlines in the financial press, investors spent much of the past year anxiously awaiting one calamity after another that failed to occur. The plunge off the so-called fiscal cliff was averted. The euro zone did not fall apart. China’s economy and stock market did not crash. The bond…

Managing Municipal Market Credit Risk

Our process for managing credit risk in individual municipal bonds goes well beyond the credit ratings that they are assigned by credit rating agencies. While we believe these ratings have value, and they are one piece of information we consider, we also evaluate other parameters such as the bond issuer’s municipal market sector, municipality revenues…

The Risks of Yield-Seeking Strategies

In the past few years, some investors have asked us whether they should replace a portion of their high-quality bonds or bond mutual fund holdings with strategies ranging from high-dividend stocks to oil and gas master limited partnerships because “rates are low.” We have generally counseled investors that every one of these strategies involves substantially…

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