Investing Blog Roundup: Expected and Unexpected Returns

On Monday we discussed the expected return from the Vanguard Total Bond Market Index Fund.

This week I came across an article from esteemed economist Kenneth French discussing the expected and unexpected returns of Facebook, Amazon, Apple, Netflix, and Alphabet (i.e., Google).

A key point about expected returns is that, except for a few specific types of investments (e.g., Treasury bonds that we intend to hold to maturity), we don’t actually expect to get the expected return. That is, we will almost always get more or less than the expected return (i.e., there will be some level of positive or negative unexpected return — we just don’t know how much).

• Investing in FAANG Stocks: Should You Expect Unexpected Returns? from Kenneth French

Recommended Reading

• Multi-Year Guaranteed Annuities (MYGAs) from David Blanchett and Michael Finke
• Robinhood Internal Probe Finds Hackers Hit Almost 2,000 Accounts from Sophie Alexander
• Wells Fargo Fires Over 100 Employees for COVID-19 Relief Fund Misuse from Reuters*
• When You Have Enough, It’s Time to Help Others from Paul Brown
• My Recent State Tax Audit from Jim Dahle
• Can Baby Bonds Shrink the Racial Wealth Gap? from Aron Szapiro
• New Climate Maps Show a Transformed United States from Pro Publica

*After the account fraud scandal and auto insurance scandal, I don’t understand why anybody still trusts this company with their money.

Thanks for reading!