Rick Ferri, CFA, fields live audience questions on asset allocation, discussing the difference between one’s investing philosophy and their strategy, and more.
Should I Prepay My Mortgage If Interest Rates Are Increasing?
Calculations are needed to find out if making money by not prepaying a mortgage, but using cash to invest instead – would be profitable.
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 […]