Practical analysis for investment professionals

FAJ Author Interviews

Demystifying the IRA Recharacterization Option (Podcast)

Navigating tax strategies can be particularly tricky to begin with, and the flurry of advice following the IRS’s relaxation of Roth IRA recharacterization rules (which removed the restrictions on higher-income individuals converting their IRAs) caused no small amount of confusion in the financial community.

A New Rule for Retirement (Podcast)

The traditional 4% rule has proven problematic for many investors. Researchers are now suggesting an alternative; The floor-leverage rule is a strategy for retirees who can tolerate investment risk but insist on sustainable spending.

Cam Harvey on the Controversies Surrounding Gold (Podcast)

Is gold an really an inflation hedge? Is it a safe haven in times of stress? Cam Harvey has investigated some of the common arguments made in favor of gold.

The Paradox of Wealth: Economic Growth Lowers Security Returns (Podcast)

“I’ve always been fascinated by and somewhat skeptical of the connection between economic growth and security returns,” William J. Bernstein says. “When you look at the broad sweep of history, it seems that both the equity risk premium and the risk-free rate have been decreasing over the past couple of centuries.”

Top 10 Things Peeving Cliff Asness (Podcast)

Clifford S. Asness, managing and founding principal at AQR Capital Management, is bothered by some prevailing beliefs in the investment industry.

Charley Ellis’s Lessons on Grand Strategy (Podcast)

What can investment managers learn from military strategists? According to Charles D. Ellis, CFA, quite a lot. “I think all of us who are involved in investment management would be very, very smart to be sure that we — and everyone in our organizations — are trying to find new ways of thinking,” Ellis says.

Moral Hazard and Tax Benefits as Drivers of Corporate Pension Plans (Podcast)

In the first five days of October 2008, large corporate pension funds lost more than $100 billion of pension assets. And at the end of 2011, the aggregate funding shortfall for Fortune 1000 companies amounted to $343 billion. In examining the decisions that defined benefit plan sponsors made, Xuanjuan Chen, Tong Yu, and Ting Zhang argue that moral hazard and tax benefits play a significant role.

Finding Winners in Actively Managed Mutual Funds (Podcast)

Previous research has shown that the average actively managed mutual fund underperforms a low-cost index fund after accounting for fees and expenses, but a new paper quantifies the size of active positions and distinguishes between different types of active managers.

“Sell in May and Go Away” Just Won’t Go Away (Podcast)

A team of researchers set out to disprove the old adage "sell in May and go away" — and were stunned to discover that the data backed it up.

Tactical Portfolio Adjustments in a Crisis (Podcast)

The recent financial crisis saw a large-scale flight to quality, but Paul Pfleiderer’s recent research suggests that the optimal investor response in a crisis involves a surprisingly limited amount of portfolio turnover.

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