Don't Get Sabotaged By 'Sophisticated' InvestingDon't Get Sabotaged By 'Sophisticated' Investing

The more we learn about investing, the more we appreciate that holding well-diversified portfolios, targeting a few primary sources of expected returns (such as stocks over bonds, small vs. large cap and value vs. growth stocks), and keeping fees and taxes low is the most sensible approach. This should be welcome news for all. Investors don't need complicated investment strategies; a simple and efficient approach should be sufficient to achieve their goals. Advisors no longer have to pretend to be the wizard behind the curtain, knowing all the right levers to pull. Investors are increasing looking to us for a goal-specific financial plan and an efficient investment portfolio that they can understand and follow.

Yet the financial industry continues to develop seemingly sophisticated "alternatives" that claim to enhance the results of "traditional" portfolios of stocks and bonds, both through higher returns and lower risk (because of favorable correlations with other… Read More …