Innovation fuels the investment industry with a steady stream of new products. And yet many of these products are unproven, with hidden risks and consequences that even seasoned investors can’t foresee. Here we take a closer look at one of the industry’s greatest innovations of the 21^st century—Exchange Traded Funds, or “ETFs”—now grown into a multi-trillion dollar marketplace. Does this much-touted product serve your best interests? Read on.

This appealing strategy has pitfalls, too. Who doesn’t want to reduce their tax bill? At the end of the year, one popular tactic is tax loss harvesting, a strategy of selling stocks, mutual funds, exchange-traded funds and other investments that are worth less than what one paid for them. The idea is to use losses to offset realized capital gains on other investments. On the surface, tax loss harvesting seems attractive, but is it a good fit for the long-term investor? It depends.

Reaching For A Better Solution: Is Smart Beta Right for You? Wouldn’t it be great if you could reap equal or greater returns while lowering your risk? That’s the allure of new “smart beta” strategies. But are these strategies proven and reliable or simply the latest marketing gimmick to reel in gullible investors? Here we offer a quick primer on what smart beta investing is all about, and advice for those considering it.

As recently as last year, and for the first time in 80 years, federal regulators lifted a ban on advertising allowing hedge funds and private equity buyout firms to now promote their products to the general public. This piece of legislation fundamentally changed the way in which private placement issuers raise money and affords them an opportunity to collect even more in management fees. For decades the private offering giants persuaded institutions and university endowments to entrust them with investing billions of their dollars while promising diversification and better returns than the general market.

To our surprise and delight we received this news late last week: Congratulations! Cardiff Park Advisors has been named to the inaugural 2014 Financial Times 300 Top Registered Investment Advisers. In a field of outstanding financial professionals, the FT 300 should be considered a list of truly exceptional advisor firms.

Click here for the full report. 

Human beings love to imagine connections between events where none really exist. For financial journalists, this is a virtual job requirement. For investors, it can be a disaster.

Since the early days of security analysis, research has emphasized the potential benefit of buying stocks at a price that is reasonable to the fundamentals. The oldest benchmark for valuation is the dividend yield. Stocks that trade at a high dividend yield are often referred to as value stocks. Stocks that trade at a low dividend yield are often referred to as growth stocks. Value and growth investing have given rise to dramatically different records of long-term performance. A large body of evidence suggests that there has been a higher long term-term return both domestically and internationally from investing in value stocks.

Fixed-income funds are where investors traditionally look for safety and low volatility. Yet, the months of May and June were challenging for many fixed income investors, especially for those who have been reaching for higher yields. For example, mutual funds that invest in long-term U.S. Treasury bonds lost on average 6.25% in May and 3.25% in June. And funds that borrow to increase returns or that invest in higher yielding sectors such as privately issued mortgage backed securities and emerging market debt securities got hit even harder during a rough patch for bonds overall.

Theoretical and empirical work in finance over the past 50 years has led to an evolution in our understanding of how financial markets work. For instance, 40 years ago, building on the work of Harry Markowitz on portfolio selection and the efficient diversification of investments, William Sharpe and others initially thought there was only one dimension of expected returns in equity markets—the market itself.

Facts: Indexes have no costs, but funds do. Most funds underperform their benchmark (BM) at a minimum by ther expense ratio and some additional amount related to turnover.