Weekend Reading – Stocks vs Bonds: A Boglehead’s Investigation, Robeco Launches Factor ETFs & How To Retire A Few Decades Early
Weekend Reading is a collection of Investment Research and Lifestyle topics from all corners of the Web. We source the highest quality insights from Wall Street and Main Street that you may apply to your investment process. Unlike the rest of Bankeronwheels.com, this series is provided without additional guidance. As usual, everything is to be used at your own risk. Below is the type of content we shortlist:
He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has.
Featured
Slashing FX Costs! In Which Currency Should I Buy ETFs? (Banker on Wheels)
One of the most confusing aspects of UCITS ETFs is currencies. Pay special attention. Not only can they affect the long term performance of the Stocks and Bonds, but they also impact the FX conversion fees you pay your Broker. There are four currency types when looking at an ETF: (i) the Underlying Assets’ Currencies (ii) the Hedging Currency (iii) the Trading Currency, and (iv) the Fund Base Currency. The first two are strategically important, the last two are tactically important.
Portfolio Construction
Asset Allocation
Bonds are riskier than stocks? 2.7% Safe Withdrawal Rate? Here’s What Recent Analysis Might Be Getting Wrong (Bogleheads)
Over the last year or two, there has been a lot of talk about some recent studies suggesting that bonds are riskier than stocks and that we need to be much more conservative about safe withdrawal rates than is conventionally thought. Some have amplified these findings in podcasts and videos. Suddenly people are thinking that bonds are risky and they shouldn’t hold any because they are worse for your portfolio. But is that really the right conclusion to draw from the studies?
- When Past Performance Is Absolutely Indicative of Future Results (Portfolio Charts)
- A Few Thoughts On Diversification Strategies (Fortune Financial Advisor)
- What Does a Once-in-a-Generation Investment Opportunity Look lLke? (CAIA Association)
- T-bills yield contribution to Trend Following Strategies (Rogersplanning)
Understand Financial Markets
The Less-Efficient Market Hypothesis (Alpha Architect)
This month we talk about the AQR's Cliff Asness's new paper "The Less-Efficient Market Hypothesis" and review his claims regarding the market becoming less efficient over the past 30 years, valuation spreads as an indication of inefficiency, speeds vs. accuracy of markets, indexing, low interest rates and social media contagion.
The S&P 500 is experiencing the strongest YTD performance of the 21st century. (JP Morgan)
The S&P 500 has now posted its strongest year-to-date performance of the 21st century so far, having already advanced by more than 20% through the end of the third quarter. To boot, the S&P 500 maintained the momentum throughout September – which is notable given that it is historically a weak month for the markets. This time around, the S&P 500 posted its first September advance (+2.1%) since 2019, and Bloomberg’s global bond aggregate was up for the first September (+1.7%) since 2016.
How To Invest
Active Investing
Factor Investing
Discretionary Investing
JP Morgan on UK equity market: A value opportunity, not a value trap (JP Morgan)
Heavily discounted assets can typically be divided into two categories. There are those that are cheap for good reason, and there are those where low valuations represent a compelling investment opportunity over the medium term. Having underperformed global stocks in 24 of the last 36 years, the FTSE All-Share has increasingly been labelled as the former. Yet today, we see four key reasons why the UK market’s 40% discount to developed market peers is increasingly difficult to justify.
Latest Morgan Stanley Maubussin Report: Magnitude of Value Creation (Morgan Stanley)
An assessment of a company’s strategy is arguably the most important part of the investment process for a long-term investor. In a nutshell, strategy explains how a company achieves sustainable value creation. A company creates value when it makes investments in people and assets that generate cash flows over time that exceed their cost, including the opportunity cost of capital. Sustainable means a company can find and invest in attractive opportunities for a long time.
Sustainable Investing
An Apolitical, Data-driven Guide To Sustainable Investing. (Banker on Wheels)
This guide to sustainable investing is Bankeronwheels.com’s exclusive deep dive into Sustainable Investing. Sustainable Investing is trendy. But let’s face it, hardly anyone understands the topic. The vast majority of institutional investors and even some academics don’t understand the nuances either. Unsurprisingly, you probably haven’t found any comprehensive guide on this topic that didn’t create even greater confusion. So here is where we step in.
Alternative Asset Classes
Goldman Sachs Report on Two Decades of EM Fixed Income Investing (Goldman Sachs)
Investing in fixed income in Emerging Markets (EM) has a long history, beginning in earnest in the early 2000s. In the aftermath of a series of balance of payments crises that involved currency and duration mismatches in the late 1990s and early 2000s, there was a concerted move towards the issuance of local currency denominated debt in addition to US Dollar debt, and a corresponding move away from hard currency pegs.
Robeco Report on Gold being back as an asset class (Robeco Qauntitative Investing)
Its allure has lasted for centuries and shows no sign of losing its appeal. The recent spike in the price of gold to all-time highs suggests it should once again be treated as a genuine asset class and not an emotional fad, says multi-asset investor Arnout van Rijn.
Wall Street
Bad Bets
- 15 Ways to Lose Money in Markets (Excess Returns)
- A repayment plan has officially been approved, nearly two years after FTX went bust (Blockworks)
- The FBI Rounded Up Crypto Criminals and It was Funny! (Patrick Boyle)
- Americans lost $5.6 billion last year in cryptocurrency fraud scams, the FBI says (AP News)
ETFs
UCITS ETFs
Robeco launches new 3D Factor ETFs marketing them as "Outsmart the Index" (Robeco Quantitative Investing)
Our 3D ETFs are an extension of our enhanced indexing strategy, which balances risk, return, and sustainability to deliver better outcomes over time. This offers a more dynamic investment compared to passive ETFs, targeting all three investment dimensions to improve performance and sustainability while limiting deviations from the benchmark.
US ETFs
Wealth Management
Personal Finance
- The Way Forward for Behavioral Finance (Standard Deviation)
- The Little Book of Common Sense Investing (Book Review) (Banker on Wheels)
- The Low Stability of High Income (Of Dollars and Data)
- The Ultra-Rich Are Building a Separate World Here on Earth (Oddlots)
- Are We Heading Towards a RECESSION?! | Dr. Karsten Jeske (Big ERN) EXPLAINS (Afford Anything)
- Meet the HENRYS: The Six-Figure Earners Who Don’t Feel Rich (Wall Street Journal - Paywall)
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Platforms
(Early) Retirement
How To Retire a Few Decades Early (TED)
TEDxBoulder's Andrew Hyde sits down for a brief interview with Pete Adeney (aka Mr. Money Mustache) on the principles of healthy, purposeful living and how that can lead to a much better financial situation in life as well. And the shockingly simple math that connects a healthy life to the ability to reach financial independence many years earlier than you'd expect.
Financial Advice
Design Your Lifestyle
Personal Development
Careers & Entrepreneurship
Travel
Sneak Peaks 2024: Stories from the Two Fastest Riders (Bikepacking.com)
Sneak Peaks is a fixed-route, unsupported, single-stage bikepacking expedition through the Italian Dolomites and Triglav Mountains in Slovenia. Over 130 riders participated in this year’s inaugural event, split between three routes ranging from 500 to 1,100 kilometers. Find two thrilling rider recaps and a stunning selection of photos here…
Tech & Economy
Economy
Tech & Science
And Finally
Good Luck and Keep’em* Rolling!
(* Wheels & Dividends)
Trade Wars, Real Wars, but Equities Close To All-Time Highs: Is It A Good Time To Invest?
7 Reasons Why Japan May Be Your Next Cycling Adventure
Nomads in 2026: Genki vs SafetyWing – Which Travel Insurance Wins?
How You Can Cycle The World – A Practical Guide
Weekend Reading – Vanguard Cuts Fees across 15 ETFs & IBKR launches prediction markets
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