Category Archives: Research

Research

2014 Capital Market Assumptions

Sellwood Consulting’s 2014 Capital Market Assumptions are now available. These assumptions are the primary input for our asset allocation work for clients, being the input variables for mean-variance optimization, Monte Carlo analysis, and risk budgeting.

This year, though we have made incremental enhancements to our methods for gauging the future value of assets, we have maintained our focus on the primary, reliable drivers of risk and return. Our assumptions are anchored in the empirical facts


Using Active Share to Deliver Better Equity Portfolios

Active Share is a relatively recent innovation in investment analysis and, unlike many innovations in the investment world, one that we believe enhances the investment process. We use Active Share to quantify how “active” active managers really are, what level of fees are appropriate to pay those managers, and ultimately, we believe, to recommend better portfolios for our clients.


Five Common Mistakes 401(k) Plan Sponsors Make

It is probably no surprise that a Google search of “investor mistakes” yields 30,500 results, while a search of “plan sponsor mistakes” yields only 53. The financial media typically focus on errors made by 401(k) plan consumers rather than those made by its architects—the plan sponsors. However, plan sponsors can encounter pitfalls similar to individual investors when it comes to designing


Historical Perspective on Prospective Returns

A number of recent articles and research pieces have caught our eye, reinforcing our belief that forward-looking returns will be challenged by current low yields in marketable asset classes — low dividend yields in equities, and low coupon yields in fixed income.

A recent article from Buttonwood’s column in The Economist, “Home on the Range,” is a cogent summary of a recent study by Standard Life Company. The article notes,