Category: Uncategorized
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The World’s Largest Asset Class, and How to Think About It
In previous blogs, we looked at bonds and stocks as asset classes. We developed an approach based on return factors and return correlations to decide which asset classes should be considered by most investors. In this post, we look at real estate. However, unlike the case with stocks and bonds,…
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Are Bonds One Asset Class, or Multiple?
Theory and history suggest that for bonds, changes in interest rates are the dominant risk factor. Most of the rest of the risk is explained by credit risk. History also shows that in times of greatest stress, credit risk and liquidity risk can dominate interest rate risk. These characteristics can…
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Do You Know How You’re Influenced by Modern Portfolio Theory?
Almost everyone believes that you should diversify your assets – but there are different explanations about why. It is sometimes said (though how anyone would know is another story) that fish are not aware that they swim in water. Similarly, many investors today live in a world shaped by many…
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Did You Know This About Tariffs?
Fewer than half of Americans even claim to understand how tariffs work. Do you? If not, please don’t feel bad. I sat through at least one class in graduate school (at Stanford) on the subject of tariffs. That’s more, I suspect, than most people. And yet, when President Trump put…
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Income Accounting for Tax-Exempt Trusts
Section 664 of the Internal Revenue Code includes the rules for income paid from trusts that are tax exempt under the section. These rules are the so-called four-tier accounting system. This system lays out the basic rules for how distributions to the taxable beneficiaries of a tax-exempt asset diversification trust or…
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Trusts Part 2: Revocable Trust for Non-Taxable Estates
You’ve probably heard of revocable living trusts, but do you know their history, or how they can be used to help clients avoid the Secure Act? In this post, we’ll walk you through a brief history of revocable trusts, advantages and disadvantages of revocable living trusts, and how such trusts…