We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended April 14.
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Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.
Morningstar.com offers coverage of 950 stocks, 1,150 mutual funds, and 300 ETFs, plus market news, economic analysis, portfolio-planning insights, and investment commentary.
If you're among the throngs sneaking in an IRA contribution before the April 18 tax deadline, director of personal finance Christine Benz offers 10 helpful do's and don'ts
--including how to choose the right account and deciding which investments to put inside of it.
Director of fund research Russ Kinnel explored the phenomenon
of funds holding large cash stakes. He outlines some scenarios where holding a bit of dry powder in a portfolio could be a good thing, and when it's a red flag.
"The vast majority of equity managers really are not going to hold cash. So, you don't want to expect them to in the next bear market. But there are some value-oriented managers and some focused managers who will hold cash either as a reflection of the fact that they can't find something to buy and they want to stay true to their discipline, or some will own cash just to be defensive. And it's not a bad thing if you have a focused portfolio because it can mute a little of that risk."
AARP published a slideshow featuring 11 little-known facts about Peeps
, the iconic marshmallow candy enjoyed by millions at Eastertime.
This week, senior editor Karen Wallace identified nine smaller-cap firms that exhibit moat-worthy characteristics
. Strong and enduring competitive advantages are promising for any company, but they are particularly attractive for smaller companies with long growth runways, as they have the ability to compound shareholders' capital at high rates of return over long periods of time.
Director of economic analysis Bob Johnson this week explored one of the two key drivers of economic activity
: population growth. Johnson explains that population growth is now running at 0.7%, or more than 1% slower than its historical rate, which explains a great deal of slowing GDP growth. In addition, that 0.7% is split roughly 50/50 between native-born population growth and immigration.
"If you look at the data right now, roughly 1.3 million population additions each year are from native born, that is births less deaths, and about the same number, 1.3 million is from immigration. So it's a pretty equal split right now, so I mentioned it was a 0.7% population growth, so it's about 0.35% is coming from native, and 0.35% from immigration. So we'd be growing at half of what we were without an immigrant population."
Senior analyst Maciej Kowara looked back on the two-decade history of Treasury Inflation-Protected Securities
(TIPS) this week. He says the picture that emerges is a nuanced one:
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United Continental Holdings
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"TIPS have performed well, but their correlation and volatility patterns didn't make it part of an efficient portfolio, based on the past 20 years of history. What are we left with? Just another asset class. This history shows that there is nothing inherent in the TIPS structure that makes them attractive or unattractive. The best that can be said is that they provide explicit insurance against inflation, and may thus be attractive to those investors who are really buying insurance rather than investing. Given those investors' demand for certainty, they should more properly be called savers."
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Dodge & Cox Income
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BlackRock Strategic Income Opps
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Vanguard Dividend Appreciation ETF
iShares Core S&P Mid-Cap
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Schwab US Dividend Equity ETF
Vanguard Extended Market ETF