Active Management

Our take on the investing, financial, & economic themes of the day

Rethinking the Active vs. Passive Debate

12 November, 2014 by Ben O'Brien in Commentary
Josh Brown of the Reformed Broker blog linked yesterday to an interesting interview in the Wall Street Journal with mutual fund expert David Snowball who addresses the active versus passive investment debate: WSJ: Active or passive? Do today’s fund managers face an insurmountable challenge in ... read more...

You Wouldn’t Represent Yourself in Court, So Why Are You Trying to Invest Your Own 401(k)?

13 October, 2014 by Matthew O'Brien, Ph.D. in Commentary
The root cause of all the problems with defined contribution retirement plans is the absence of any fiduciary duty on the part of most plan providers.  In the recent deluge of TV documentaries, news articles, think tank papers, and government reports about excessive 401(k) fees, this point gets ... read more...

On Stock-Picking Monkeys & Equal-Weight Stock Indices

“A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”  So wrote Princeton economist Burton Malkiel, famously, in A Random Walk Down Wall Street (1973).  The other week ... read more...

The Biggest Problem with 401(k) Plans is the Do-it-Yourself Fund Picking Model

There’s lots of discussion in the financial press about excessive 401(k) fees, which we at O’Brien Greene like to see, since our professionally managed 401(k) plans are much less costly to retirement investors than the conventional plan.  The new attention to fees helps plan ... read more...

Another Problem with Target Date Funds and “Automated” Investing

3 September, 2013 by Matthew O'Brien, Ph.D. in Commentary
In an earlier comment we noted a number of drawbacks with the investing strategy behind target date retirement funds.  I want to highlight an additional problem: many different target date funds with the same target date have drastically different asset allocations, while many funds with ... read more...