Tales from the Crypto: How to Think About Bitcoin

“Everything you don’t understand about money combined with everything you don’t understand about computers.” ~ HBO’s Last Week Tonight with John Oliver, March 11, 2018

Bitcoin and related cryptocurrencies (now numbering in the thousands) are the subject of much debate and fascination. Given bitcoin’s dramatic price changes, it is not surprising that many are speculating about its possible role in a portfolio. (more…)

What Is the Social Cost of Carbon?


  • The social cost of carbon (SCC) estimates the future damages from an additional ton of CO emissions.
  • The number is crucial for environmental policymaking and was just updated by the new US administration.
  • The estimation of the SCC is sensitive to its inputs, and debate continues in the academic community about its appropriate value.


The Economics of Climate Change

This paper summarizes the economics of climate change. We first review the basics of climate science and the historical evolution of greenhouse gas emissions. We then discuss the relation between climate change and economics and assess the economic costs, direct and indirect, of climate change. These costs are uncertain and sensitive to the choice of discount rate, but overall, the expected costs are economically significant, and early mitigation efforts may be more cost-effective than later actions. We discuss the tradeoffs associated with different potential actions, such as carbon taxation and cap-and-trade programs. Finally, we examine the implications of climate change for asset pricing and investment choices.


Large and In Charge: Giant Firms atop Market Is Nothing New

A top-heavy stock market with the largest 10 stocks accounting for over 20% of market capitalization and a marquee technology firm perched at No. 1? This sounds like a description of the current US stock market, dominated by Apple and the other FAANG stocks,1 but it is actually a reference to 1967, when IBM represented a larger portion of the market than Apple at the end of 2019 (5.8% vs. 4.1%). (more…)

What a Company’s Emissions Tell Us about Its Expected Returns

Climate scientists have identified greenhouse gas (GHG) emissions as the largest contributor to global climate change.1 As a result, many investors are looking to reduce their emissions exposure through their portfolios and wondering if doing so would affect their expected performance. A new research paper from Dimensional delves into this subject by examining the relation between firm-level emissions and expected returns.


Market Trends Affecting Your Portfolio

By Daniel Campbell, CFA

If I told you that we’d have a partial breakup of the European Union, a contested U.S. election, an economic contraction, and a global pandemic over the course of a year, would you expect the stock market to be up or down? Most of us might guess that the markets would be down (probably significantly). Few may have predicted that the markets would continue to set record highs. But that was 2020: a year of the unprecedented. Britain left the European Union, the first country ever to do so. The U.S. election was hotly contested, bringing out a record number of voters. And the defining event of 2020 – a global pandemic – upended normal life. Best-case scenario, it only changed the way we work, travel and connect with family and friends. (more…)

Our Bond with Bonds: Even in a Low-Interest-Rate World

By Jonathan Scheid, CFA, AIF®

Investing is a series of trade-offs. Every one of us has a finite amount of money, and we must determine how much we want to put where. Placing a large portion of our money in stocks means we might have tremendous upside potential, but it also means we won’t be able to put a lot of money in the cash and bonds that help stabilize some of the ups and downs of stocks. Placing all our money in cash and bonds might not get us the growth we need to meet our financial life goals. (more…)