Over the last five years, I’ve spent a lot of time traveling the world to talk to people about money. At least one common theme comes up again and again: anxiety. People are worried about the future and want to know what they can do to prepare themselves for a stable financial life. As we…
Over the past decade, structured investment products, also known as equity- or index-linked notes, have become increasingly common in the portfolios of retail investors. In 2013 alone, more than $40 billion in structured notes were issued. And this is not just a U.S. phenomenon. A 2009 study by Marc Rieger and Thorsten Hens found that…
One of the more popular strategies pursued by hedge funds is the currency carry trade. The strategy involves borrowing (going short) a currency with a relatively low interest rate and then using the proceeds to purchase (going long) a currency yielding a higher interest rate, thus capturing the interest differential. The strategy can be “enhanced”…
Liquidity can be described as the ability to trade a large number of investments quickly, at low costs and when you want to. Because it is a priced risk, liquidity and its associated price effects are an important aspect of financial markets. In illiquid markets, such as the private equity market, discounts are large and…
“When I hear ‘smart beta,’ it makes me sick.” So said economist and Nobel Prize-winner William Sharpe after he was asked at a conference last year for his thoughts on strategies of this type. And while much, if not the vast majority, of what Wall Street terms “smart beta” makes me sick as well, one…
What happens when we’re driving and we reach a red light? We stop, right? When the light turns green, we hit the gas. If we don’t, it usually doesn’t take long for the driver behind us to start honking the horn. Anyone who has survived driver’s education (or sitting in the back of a taxi)…
Who said Congress is dysfunctional? When necessary, its members can come together quite seamlessly. Recently, a group of elected officials, one that crossed party lines, launched an effort with apparently one goal in mind. If you think I am referring to an issue like national security, you would be wrong. So what was this pressing…
“Greece is a tiny player in global capital markets. Its default is 100% certain,” says Larry Swedroe, Director of Research for The BAM ALLIANCE and the author of 14 books on investing, including his most recent, The Incredible Shrinking Alpha, co-authored with Andrew Berkin. “The only question is how much and what they default on,”…
When we think of mountain climbing, we tend to think of Mount Everest and big groups of people climbing in long lines. Armies of Sherpas create base camps and ferry supplies and gear up and down the mountain. Miles of rope anchored to the mountainside helps climbers reach the top. For a very long time,…
There’s a powerful agenda behind the opposition to the rule proposed by the U.S. Department of Labor (DOL) requiring that advisors to retirement plans be fiduciaries: The securities industry wants to preserve its ability to give conflicted advice. There’s a lot at stake. Background Information Fiduciaries are required to put the interests of their clients…
I love a good story. In fact, I used to tell myself at least one new story every time I opened my credit card statement. “Oh,” I’d say to myself, “I was so busy last month, it makes perfect sense that I ate out a dozen times. I’ll just eat out less next month.” Other…
There’s a large body of sound, academic evidence (which is presented in my books, “The Only Guide to Alternative Investments You’ll Ever Need” and “The Quest for Alpha”) demonstrating that, in aggregate, private equity investments have represented the triumph of hype and hope over wisdom and experience. The following is a summary of findings from…
I have a crazy idea I want to run by you. Imagine that a cultural anthropologist finds one of your credit card statements in 100 years. What would your spending suggest you value the most? Based on your spending, what assumptions might someone make about how you live your life? Our credit card statements (really,…
Last week, we recapped some of the more recent literature on the performance of private equity, and venture capital (VC) in particular. The cumulative body of evidence, we found, was damning with regard to venture capital’s ability to provide better returns than comparable—and less risky—publicly traded equities. We left off with a review of a…
Every January, I put together a list of predictions that financial “gurus” have made for the upcoming year, especially the ones that gain consensus as “sure things.” Through a series of periodic updates, I keep track of whether these “sure thing” forecasts actually came to pass. The turn of the calendar into July means it’s…
©2025 Lucia Wealth
