Entries by Joseph M. Graham, CFA

    Dividend Payers and Growers: Smart Options in a Rising Rate Environment

    December 7, 2016 10:35 AM by Joseph M. Graham, CFA

    As bond yields begin to compete with equities, we recommend an ecumenical approach to equity income and growth in dividends.

    We spent a good part of 2016 discussing the somewhat rare opportunity to buy stocks at better yields than those offered by the 10-year U.S. Treasury.

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    U.S. Stocks: A Bad Time for Market Timing

    January 13, 2016 10:32 AM by Joseph M. Graham, CFA

    The impulse to sell during market pullbacks has often resulted in lower long-term returns.

    The year got off to a record start for the U.S. stock market (as represented by the S&P 500® Index); unfortunately, the record (as of January 7) was for the worst performance by the index in the first four trading days of the year. 

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    Equities: Playing the Expectations Game

    November 6, 2015 11:42 AM by Joseph M. Graham, CFA

    Why have U.S. stocks rallied even as corporate profits have slumped? 

    In deciphering market moves, it’s best to consider expectations rather than headlines. Domestic equities surprised most observers in October, with the S&P 500 notching an 8.1% return for the month, according to Bloomberg. 

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    Volatility, Fear, and the Benefits of Stock Picking

    September 14, 2015 3:57 PM by Joseph M. Graham, CFA

    Active management can add value during periods of high volatility and intra-market correlation.

    “Turmoil” and “fear” are popular words these days. You can go to Google Trends and see how much these words are surging in Internet searches. “Turmoil” has even morphed into a verb, as in “The market is turmoiling again due to hawkish overtones from strong jobs data.” As with much of etymology, there’s some truth hidden in the newly popular form. But it may not be the truth people imagine, that formerly rare bouts of volatility have now become commonplace.

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    Equities: An Approach that Never Goes "Out of Style"

    July 24, 2015 1:50 PM by Joseph M. Graham, CFA

    New research reveals that style inconsistency leads to underperformance, echoing the findings on active share.

    The papers on active share by Martijn Cremers and Antti Petajisto1 have received a lot of attention in the industry, and here at Lord Abbett (see here, here, and here)—and for good reason.  Active share, when used in combination with tracking error, enabled the identification of a class of mutual fund managers that, on average, have outperformed their benchmarks. Cremers and Petajisto called this group “Diversified Stock Pickers.”

    But Cremers and Petajisto aren’t the only researchers to discover the phenomenon that has enabled this group to outperform. 

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