Chart shows that Florida has had a 318,855 person positive migration rate between July 2021 - July 2022

Chart of the Day

Florida is #1

Today’s Chart of the Day comes from a Wall Street Journal article

The chart shows that in the short term, cash and bonds have the least amount of risk and stock have the highest. However, over the long term, it is exactly the opposite.

Chart of the Day

Risk of Stocks vs. Bonds

Today’s Chart of the Day comes from @brianferoldi on Twitter who does a great job of making complex things easy to understand.

chart shows that the average is around 70% of the time, meaning that seven out of every 10 years ends positive

Chart of the Day

70% Up Over 10 Years

Today’s Chart of the Day comes from OfDollarsAndData.com and shows the percentage of years with positive returns per 10-year spans going back to 1900.

chart shows the long term price per earning ratio going all the way back to 1871 with an average of 16(x), lowest of all time is 5(x) in 1920, highest, 44(x) in 1999

Chart of the Day

Speculation is Not as Important as Quality

Today’s Chart of the Day comes from Robert Schiller’s book called Irrational Exuberance, which was summarized by Leandro, @Invesquotes on Twitter.

chart shows the opening and closings of mutual funds vs. exchange traded funds (ETFs) since 2012.

Chart of the Day

ETFs Are Growing

Today’s Chart of the Day comes from Morningstar Direct and shows the openings and closings of mutual funds vs. exchange traded funds (ETFs) since..

Chart compares 3rd quarter withdraws from non-traded REITS from 2018 - 2022

Chart of the Day

Be Wary of Non-Traded REITs

Today’s Chart of the Day comes from the Wall Street Journal and highlights why investing in Non-Traded, or illiquid, assets pose additional risk.

Chart compiles data from professional economists on the probability of a recession in the next 12-months.

Chart of the Day

Year End Comment

What a wild ride. In 2022 we experienced:

the Participation Rate shown by the falling orange line in the chart dates back to 2008

Chart of the Day

Retiring Sooner Causing Inflation

Today’s Chart of the Day comes from the Financial Times and includes an article asking if higher wage demands will increase inflation like in the..

Chart compares the Dow Jones versus the S&P 500 dating back to 1958

Chart of the Day

Dow vs. S&P

Today’s Chart comes from Benedek Voros from S&P Dow Jones Indices. I always like to point out firsts, and this year there have been many.

chart shows actively managed funds in red and passive funds in blue. Passive funds have grown each year for the last 22 years.

Chart of the Day

20 Year Active to Passive

Today’s Chart of the Day comes from FinancialTimes.com and shows that starting in 2015, and each year after, investment funds left actively managed..

Chart shows the 20-year annualized returns by asset class (2002 - 20212) Some of the topics included: cash, inflation, average investor, bonds, S&P 500

Chart of the Day

Average Can Be Hard to Achieve

Today’s Chart of the Day comes from Compounding Quality, @QCompounding on Twitter, and shows that over the last 20 years, the average investor..

chart shows the index slipped not even below average, but is the lowest since just before the Great Recession

Chart of the Day

Housing Un-Affordability

Today’s Chart of the Day is the history of the Housing Affordability Composite Index provided by the National Association of Realtors going all the..

chart shows that 27% of large-cap managers stay in the top quartile, however, the chilling figures is only 1.5% mid- and 0.9% of small- do.

Chart of the Day

Lack of Persistence in Mid- and Small-Cap

Today’s Chart of the Day from S&P Dow Jones shows the percentage of time the top 25%, or top quartile, of active investment managers stayed in the..

Chart shows a map of the United Stated marked by state with the following colors based on price: dark green, light green, yellow, orange and red. Florida is light green in the 300 - 400 range

Chart of the Day

Median Sale Prices in US

Today’s Chart of the Day comes from @WallStreetSilv on Twitter, with data provided by Redfin, covering the median sale price for a single-family..

Chart talks about the shift from active to passive throughout different types of investments

Chart of the Day

Change of Market Shares

Today’s Chart of the Day comes from @MorningstarInc and @MstarBenJohnson on Twitter. It shows the change from actively to passively managed..

On Our Minds

List Grid

Chart of the Day

01/17/23

Florida is #1

Today’s Chart of the Day comes from a Wall Street Journal article

Chart of the Day

01/13/23

Risk of Stocks vs. Bonds

Today’s Chart of the Day comes from @brianferoldi on Twitter who does a great job of making complex things easy to understand.

Chart of the Day

01/12/23

70% Up Over 10 Years

Today’s Chart of the Day comes from OfDollarsAndData.com and shows the percentage of years with positive returns per 10-year spans going back to 1900.

Chart of the Day

01/10/23

Speculation is Not as Important as Quality

Today’s Chart of the Day comes from Robert Schiller’s book called Irrational Exuberance, which was summarized by Leandro, @Invesquotes on Twitter.

Chart of the Day

01/5/23

ETFs Are Growing

Today’s Chart of the Day comes from Morningstar Direct and shows the openings and closings of mutual funds vs. exchange traded funds (ETFs) since 2012.

Chart of the Day

01/4/23

Be Wary of Non-Traded REITs

Today’s Chart of the Day comes from the Wall Street Journal and highlights why investing in Non-Traded, or illiquid, assets pose additional risk.

Chart of the Day

12/29/22

Year End Comment

What a wild ride. In 2022 we experienced:

Chart of the Day

12/27/22

Retiring Sooner Causing Inflation

Today’s Chart of the Day comes from the Financial Times and includes an article asking if higher wage demands will increase inflation like in the 1970s. However, this time it is different since the workforce is shrinking as shown by the Participation Rate, the falling orange line in the chart. The participation rate is defined as the percentage of healthy people 16 or older who are actively working or looking to do so.

Chart of the Day

12/22/22

Dow vs. S&P

Today’s Chart comes from Benedek Voros from S&P Dow Jones Indices. I always like to point out firsts, and this year there have been many.

Chart of the Day

12/21/22

20 Year Active to Passive

Today’s Chart of the Day comes from FinancialTimes.com and shows that starting in 2015, and each year after, investment funds left actively managed funds, in red, and were reinvested into passive funds, in blue, which have grown each year for the last 22 years.

The interesting part is the year over year growth is accelerating in 2022 as the downturn in both stock and bond prices provided an opportunity to sell out of many funds and not pay capital gain taxes. Any further downturns in 2023 could accelerate this trend even more.

Chart of the Day

12/20/22

Average Can Be Hard to Achieve

Today’s Chart of the Day comes from Compounding Quality, @QCompounding on Twitter, and shows that over the last 20 years, the average investor realized only an annual return of 3.6%. This is less than 4.3% on bonds, and not much higher than inflation of 2.2%, meaning that many just barely broke even after inflation and taxes. This can be compared to a return of 9.5% on the large-cap stock index, or 7.4% for even a conservative generic portfolio of 60% stocks and 40% bonds.

Chart of the Day

12/15/22

Housing Un-Affordability

Today’s Chart of the Day is the history of the Housing Affordability Composite Index provided by the National Association of Realtors going all the way back to 1986, with the average line in dotted red.

Chart of the Day

12/14/22

Lack of Persistence in Mid- and Small-Cap

Today’s Chart of the Day from S&P Dow Jones shows the percentage of time the top 25%, or top quartile, of active investment managers stayed in the top 25% after five years. A higher-than-average figure will tell us if the active managers have genuine skill or merely experienced good luck.

If you flipped a coin, randomness would assume 25% of them would stay in the top 25%; however, the evidence does not support this. Yes, 27% of large-cap managers do, which shows that by and large their performance is merely good luck. However, the chilling figures are only 1.5% mid- and 0.9% of small- do. These are terrible odds. To add insult to injury, 15% and 23% of mid- and small-cap managers end up at the bottom 25%, meaning that even in the unlikely event you picked a good one, odds suggest you should sell it right afterward.

There are many theories to why this is, and we’ve discussed them in previous blogs including Why Indexing Works.

In the end, the significantly worse than average probability of active managers constantly beating the market in mid- and small-cap stocks is why we only use passive index funds.

Chart of the Day

12/8/22

Median Sale Prices in US

Today’s Chart of the Day comes from @WallStreetSilv on Twitter, with data provided by Redfin, covering the median sale price for a single-family residence in the United States.

Often the price of a house is constrained by the cost to build the structure which limits a wide range. For instance, why pay more for an existing house than you can build a new one for? So, the $200,000 to $600,000 range is quite alarming. Although the size of the home will impact the price, I suspect a large part of the wide range is in the cost of the underlying land, which is influenced by places with better weather, proximity to better employment opportunities, and scarcity of useful land to build on. For instance, places near the water, mountains and lakes could be influenced by these factors.

Chart of the Day

12/7/22

Change of Market Shares

Today’s Chart of the Day comes from @MorningstarInc and @MstarBenJohnson on Twitter. It shows the change from actively to passively managed investments over the last 10 years.

We often talk about this shift from active to passive, but it's interesting to see that it is not uniform throughout the different types of investments. For instance, in “alternative” investments such as private equity, hedge funds, and long-short funds, the industry’s use of passive investments only went from 1% to 11%.

In commodities, however, passive investments went from 0% to 70%. I suspect passive works better in commodities since the alpha, the opportunity to outperform, is low and low costs are a primary driver of returns.

We primarily use Taxable Bonds and US Equity, and they went from 6% to 40% and 17% to 57%, respectively. Again, primarily from the low alpha and low costs.

It will be interesting to see what the percentages are in 2032.

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