Harry M. Markowitz - Portfolio Theory and 2008

Mark covers historic recovery patterns and probability of future returns, the risks and returns that come with big government, the role of commodities in your investments, the pros and cons of inflation-hedging securities, and an investment strategy that has been highly successful historically. (92 Min.)

Mark T. Hebner - Big Losses, Big Government and Your Investments

Harry Markowitz gives an IFA Exclusive Presentation on Portfolio Theory Vs. Financial Engineering, and Their Roles in Financial Crises. Markowitz explains the difference between Portfolio Theory and Financial Engineering. Markowitz also covers Black Monday (October 19, 1987), Long Term Capital Management, and Now. (47 Min.)

Harry Markowitz - Portfolio Theory Vs. Financial Engineering, and Their Roles in Financial Crises

The first step on the index funds journey is to recognize active investor behavior. If all investors were lined up in a row, could the active investors be identified? Active investors actively engage in stock picking, time picking (market timing), manager picking, and style picking.

Step 1: Active Investors - Podcast Interview with Mark Hebner

Mark Hebner explains the Nobel Laureates. Mark suggests a higher power of non-biased information from academics who carefully analyze data and have that data peer reviewed before it is published. Mark identifies the five basic concepts of the Modern Portfolio Theory.

Step 2: Nobel Laureates - Podcast Interview with Mark Hebner

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The "Size" Effect Over Different Time Periods

IndexFunds.com Staff
Friday, January 01, 1999

It is widely accepted (although there is ongoing debate) that small company stocks outperform large company stocks over time due to their higher risks. This is a particularly hot issue today because of the recent high returns of the S&P 500 relative to small company stocks. Investors should note that long periods of time when one of the asset classes dominates are not unusual. In fact, because these periods occur and they are unpredictable, investors should consider investing in both large and small company stocks.

The charts below show the returns of small value stocks (DFA 6-10 Value index) relative to the S&P 500. For those keeping track, the DFA 6-10 Small Co. index and DFA 9-10 Small Co. index had returns of 12.9% and 13.8% respectively over the total 64-98 period.