The Investment Scientist

Archive for December 2009

Professor James Poterba

MIT economics Prof. James Poterba has conducted very rigorous research on the subject of demographic trends and asset returns. His research examined the relationship between demographic structure and returns on Treasury bills, long-term government bonds, and stocks, using data from the United States, Canada, and the United Kingdom.

What he found?

From his research, Poterba concluded: “The empirical results suggest very little relationship between population age structure and asset returns.”

Read the rest of this entry »

Who are we? That’s the question many financial advisors have been asking themselves. I agree with Carl Richards when he says financial advisors have an identity crisis.  Are we looking in the mirror each morning wondering who we are? Maybe not, but we do have a problem.

Let’s Confuse ‘Em
There are many so-called “financial advisors” that simply want to sell clients expensive products; and one of the ways to do that is to confuse the customer. Now, financial firms don’t actually have an official Customer Confusion Department, but they might as well have one. Case in point: We call ourselves “fee-only” advisors, hoping to differentiate from product pushers on commission; pretty soon, they re-brand themselves as “fee-based” advisors.  How many people can actually tell the difference between a “fee-only” advisor and a “fee-based” one?

Read the rest of this entry »



In their seminal paper “The Cross-section of Expected Stock Returns,” Fama and French demonstrated

that value stocks had outperformed growth stocks in the U.S. markets since 1963 (when CRSP data became available). They called this phenomenon the Value Premium.

Read the rest of this entry »


Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.


%d bloggers like this: