Any thought on the use and safety of stable value funds in a 401(k)? I’ve gotten a couple of questions about stable value funds recently. That’s likely because investors may be lured to them with interest rates increasing. Also, conservative investors are drawn to the predictability of a stable value fund. After all, the up-and-down […]
investing
Bogleheads® Live Ep 3: Rick Ferri, CFA on picking index funds
Host Jon Luskin, CFP® asks your questions to subject matter experts live. You can get the dates and times for the next Bogleheads® Live by following the John C Bogle Center for Financial Literacy (@bogleheads) on Twitter. You can see a list of previous Bogleheads® Live episodes here. Ep 3: Summary Rick Ferri, CFA, returns, […]
Should I Prepay My Mortgage If Interest Rates Are Increasing? Debt Arbitrage in 2022
Prepaying a mortgage may no longer make sense in 2022. That’s because the Federal Reserve recently voted to raise interest rates, with further increases planned for later this year. With increasing interest rates, investors might be able to profit from historically low mortgage rates. Yet, calculations are required to determine if mortgage arbitrage – making […]
More Risk for Less Return: Why Paying Off Debt – If Investing in Bonds – Make Sense; or Mortgage Arbitrage with Low Interest Rates
SUMMARY: Pay off debt if bonds make up any part of your investment portfolio. Even with a portfolio as aggressive as 90% stocks and just 10% bonds, anything with a non-zero interest rate should be paid off. This idea – to prepay debt if investing in bonds – comes as a surprise to those investors […]
Endowment Investing Case Study: Ball State University
For my master’s thesis, I explored the investment performance of several multi-million dollar endowment portfolios. In eight case studies, the results consistently showed that a low-cost portfolio outperformed a portfolio paying high fees to access active managers and alternative asset classes. Moreover, risk-adjusted performance showed the low-cost portfolio simply did better. (Previous analysis has shown […]