Wealth Manager

December 2007, Wealth Manager

Indexing versus active management is an old debate, but the details are forever new.

By James Picerno

IndexIng has been known to
rouse strong opinion, both pro and con.
Some accept it unconditionally, and others
reject it entirely. But many—perhaps
most—investors steer clear of absolutes
and own both active managers and index
funds, or at least allow for the possibility.
Muddled thinking? Perhaps, although a
recent study suggests there’s cause for
keeping an open mind.

December 2007, Wealth Manager

Portfolio strategy that neglects foreign bonds may be comfortable, but it can be costly, too.

By James Picerno

Stocks and Bonds, Bonds and Stocks.
Asset allocation starts with this fundamental
mix, and for good reason. Low correlation
prevails between the two asset classes—and
for enduring economic reasons. No wonder
that adding bond exposure to a portfolio of
stocks usually brings superior risk-adjusted
expected returns compared to owning either
asset alone.