You do come out slightly ahead if you carry the balance for only a month, but trying to
outperform high interest rates with relatively meager rewards is a dangerous game you're likely to lose.
That said, other Morningstar research has found that low - cost funds typically
outperform their high - cost counterparts and that fund expense ratios are a predictor of future fund returns.
There's also no guarantee that every percentage point you reduce investment fees will raise your return by the same amount, although Morningstar research on the relationship between fees and performance shows that low - cost funds typically do
outperform their high - cost counterparts.
That's why low - cost funds tend to
outperform their high - fee counterparts over long periods of time.
The late Robert Haugen wrote a couple of books in the late 90's based on his research showing that low - beta stock portfolios
outperform high - beta ones contradicting the CAPM within the asset class (it holds better between asset classes).
From an intuitive level however, think of the fact that a low mer account (let's say zero mer) will
outperform a high mer account (let's say 3 %) by 3 % each year.
Paying down a mortgage offers a guaranteed return — one that will likely
outperform high - quality bonds.
Low P / E stocks
outperform high P / E stocks by between 6 % and 13 % depending on the country.
Research in finance has aggregated together cross-listed and non-cross-listed stocks and finds that, on average, value stocks outperform growth stocks, small cap stocks outperform large cap stocks, low liquidity stocks outperform large liquidity stocks and low volatility stocks
outperform high volatility stocks.
Value investors like to sort stocks by trailing P / E ratios and focus only on the lowest P / E quartile as they believe that stocks that have low valuations in relation to trailing earnings, on average,
outperform high P / E stocks.
But Morningstar's 2015 fee study as well as other research shows that low - cost funds typically
outperform their high - cost peers, so the odds of a low - fee strategy gaining you extra income and return are in your favor.
Do low - risk bonds, like low - risk stocks, tend to
outperform their high - risk counterparts?
Grice shows that over long periods of time low beta stocks
outperform high beta stocks due in part to this:
Even if you can, there's no assurance that every cent you save in expenses will translate to an equivalent gain in returns (although research shows funds with lower costs do tend to
outperform their high - cost counterparts).
There's no guarantee each dollar in lower expenses will translate to extra return (although a Morningstar report on fees shows that low - expense funds usually
outperform their high - fee counterparts).
For example, low P / E (P / B) stocks, on average,
outperform high P / E (P / B) stocks by between 6 % and 13 % p.a. depending on the country.
While there's no guarantee that each dollar you save in expenses translates into a dollar of extra return, research does show that low - cost funds tend to
outperform their high - cost peers.
The reason: research from Morningstar as well as others shows that low - fee funds tend to
outperform their high - fee counterparts, which means focusing on low - cost options like index funds can likely lead to a larger nest egg and increase the odds your savings will support you throughout retirement.
While there's no assurance that every dollar you save in expenses equals an extra dollar of return, low - expense funds to tend to
outperform their high - expense counterparts.
But Morningstar research shows that funds with low costs tend to
outperform their high - fee counterparts.
We confirm the basic conclusion from Patel et al. that low payout firms
outperform high payout firms across all yield quintiles.
LONDON, May 3 - At a time when the impending withdrawal of European Central Bank stimulus was expected to hurt southern European bond markets, so - called «peripheral» euro zone debt continues to
outperform its higher - rated peers.
In the credit markets, both investment - grade and high - yield corporate bonds had negative returns for the first time in eight quarters, with down - in - quality subsectors in each unconventionally
outperforming higher quality ones.
In fact, the lower cost mutual funds in their study
outperformed the higher cost mutual funds in 100 % of the comparisons they ran.
LONDON (Reuters)- At a time when the impending withdrawal of European Central Bank stimulus was expected to hurt southern European bond markets, so - called «peripheral» euro zone debt continues to
outperform its higher - rated peers.
Our research suggests that lower - cost investments have tended to
outperform higher - cost alternatives.
While it does elevate GSH levels (see clinical data here and here), its benefits are consistent with whey protein isolate, and I've seen no clinical evidence to indicate that
it outperforms high quality, commercially available products which can be had for a fraction of the price.
I remember being astounded as a group of students who typically struggled
outperformed a higher - achieving group because the leadership and risk - taking opportunity patterns were different.
In a 6 - year study of middle school age gifted learners taking biology, chemistry, or physics in a 3 - week summer program, these younger learners
outperformed high school students taking these courses for a full academic year (Lynch, 1992).
In addition, YES Prep's students are
outperforming their higher income and white peers statewide in most cases — something very few, if any, other large urban school systems nationwide to date have achieved.
Well over the long term lower price stocks will
outperform higher price stocks because they're more volatile they're more risky and you are compensated for that risk.
And while cutting investing costs can't guarantee a larger nest egg, Morningstar research shows that funds with the lowest expense ratios tend to
outperform their higher - fee counterparts.
Year - to - date, the investment grade is still
outperforming high yield by returning 4.39 % versus 4.01 %.
The evidence is clear: Lower - cost funds tend to
outperform higher - cost funds.
As we discussed yesterday in Testing the performance of price - to - book value, various studies, including Roger Ibbotson's Decile Portfolios of the New York Stock Exchange, 1967 — 1984 (1986), Werner F.M. DeBondt and Richard H. Thaler's Further Evidence on Investor Overreaction and Stock Market Seasonality (1987), Josef Lakonishok, Andrei Shleifer, and Robert Vishny Contrarian Investment, Extrapolation and Risk (1994) and The Brandes Institute's Value vs Glamour: A Global Phenomenon (2008) all conclude that lower price - to - book value stocks tend to
outperform higher price - to - book value stocks, and at lower risk.
As the various studies we have discussed recently demonstrate — Roger Ibbotson's Decile Portfolios of the New York Stock Exchange, 1967 — 1984 (1986), Werner F.M. DeBondt and Richard H. Thaler's Further Evidence on Investor Overreaction and Stock Market Seasonality (1987), Josef Lakonishok, Andrei Shleifer, and Robert Vishny Contrarian Investment, Extrapolation and Risk (1994) and The Brandes Institute's Value vs Glamour: A Global Phenomenon (2008)-- low price - to - book value stocks
outperform higher priced stocks and the market in general.
Low - risk stocks have historically
outperformed high - risk stocks.
Specifically, from 1935 to1961, Black found low volatility stocks
outperformed high volatility stocks.
But research on fund fees by Morningstar and others shows that funds with low annual expenses tend to
outperform their higher - cost counterparts, which means a greater share of whatever returns the financial markets deliver goes to you.
Stocks with low P / E and P / B ratios have
outperformed higher P / E and P / B stocks over long periods of time not only in America but in virtually every stock market in the world.
The crossover at which loans started
outperforming high yield on a YTD basis occurred just last week, on July 23, 2015.
The findings are uniform: lower price - to - book value stocks tend to
outperform higher price - to - book value stocks, and at lower risk.
Lower - cost investments tend to
outperform higher - cost investments.
In the Journal of Index Investing, the author espouses, «Compelling empirical evidence has shown that lower volatility stocks... have historically
outperformed their higher - volatility counterparts.»
The low volatility anomaly research shows that in contrast to established academic research stocks with lower volatility (or beta) actually
outperform higher volatility.
-LSB-...] Robert Vishny Contrarian Investment, Extrapolation and Risk (1994) and The Brandes Institute's Value vs Glamour: A Global Phenomenon (2008)-- low price - to - book value stocks
outperform higher priced stocks and the market in general.
David Kostin, Goldman Sachs» chief U.S. equity strategist, explained that investor demand for «value» has been so pervasive that low - valuation stocks had
outperformed higher valuation peers by 12 percent in 2013.
Less volatile stocks tend to
outperform their higher volatility counter parts in bear markets, while the high volatility stocks tend to outperform in bull markets.
On the month and the year, investment grade corporate bonds are
outperforming high yield.
Hulbert makes a very significant observation about this historical pattern of low - quality issues
outperforming high - quality issues: It occurs at two points in the market cycle: at the very beginning of a bull market — and at its tail end.