How to Overcome Home Country Bias in Investing

Home country bias is when an investor has more of their portfolio allocated to financial securities domiciled in the country in which they reside than what global market value proportions would dictate. While home country bias is pervasive across the globe, Canadian investors are typically more prone to this phenomenon. Studies suggest anywhere between 50-60%…

Why You Should Expect Some Underperformance

Investment managers that employ trend-following strategies have had a challenging few years. Though not as significant as the underperformance realized by the value factor (relative to the growth factor), the last eighteen months of sideways, volatile price action in global equity markets has some pioneers of trend-following strategies questioning whether the strategy is still viable….

The (Mis) Behaviour of Markets

As any investor will know, there are no defined set of rules in financial markets; investment management is a far cry from a hard science where normal distributions and other statistical methods work well. While it’s common knowledge that many concepts in modern finance have massive shortcomings (e.g. Markowitz’s modern portfolio theory and the efficient…

Indexed Products Aren’t All Passive

This week Morningstar Inc. released a report which estimated that as of August, in the United States, assets invested in indexed products (either mutual funds or exchange-traded funds) have now eclipsed that of assets being managed by traditional active stock pickers. In last week’s issue, we looked at debunking the myth that passive investing is…

Bursting The Passive Investing Bubble

This week Bloomberg put out an article focusing on Michael Burry’s criticisms of passive investing and how, in his opinion, it mimics the bubble in synthetic asset-backed collateralized debt obligations prior to the 2008 financial crisis. Burry, one of the protagonists in Michael Lewis’ book “The Big Short” who correctly called the financial market collapse…