White Papers

Alpha or Wealth: Seeking alpha, or out-performance relative to similar indexes, can actually result in less wealth than might be achieved with efficiently allocated index funds, when cash flows badly align with the investor’s sequence of returns.

Fake Diversification: So much is said today about the need for sophisticated diversification funded by expensive alternative investements. Dave Loeper’s paper exposes how poorly these supposed risk hedges performed in two recent market downturns.

Transaction-cost Expenditures and the Relative Performance of Mutual Funds – Wharton: This study found that annual trading costs for a sample of equity mutual funds were “large and exhibit substantial cross sectional variation. Trading costs average 0.78% of fund assets per year and have an inter-quartile range of 0.59%.”

Understanding Monte Carlo: Whether you call it Monte Carlo Simulation, Stochastic Modeling, or Probability Analysis, there exists among advisors and their clients a fair amount of mystery about what exactly this analysis is and how it works.

Are You Modeling What You Intended? Building Capital Market Assumptions for Monte Carlo Simulation. It is absolutely critical that the capital market assumptions have the effect of modeling what it intends to model.

Why the Comfort Zone is Comfortable: A straightforward description of the Comfort Zone and how to interpret it.

Gold’s Twelve Month March to $3,800 an Ounce: Continuing concerns about the prospects of inflation have many investors and advisors looking toward deploying inflation hedges like gold, commodities, TIPs, and, despite recent collapses in these assets. This white paper demonstrated how our 7-10 year Treasuries held up during some of this country’s most protracted periods of inflation.