Many people like to say that passive investing doesn’t exist. However, these people make a living from active forms of investing and are just playing semantic games to distract us. Active fund managers and advisors who recommend active strategies are the main people I see claiming that passive investing doesn’t exist, but what they say isn’t true.
There is a continuum between passive and active investing; they are not absolute properties. We can reasonably call an investment approach passive even if it involves some decisions, just as we can call a person thin even if their weight isn’t zero. We may disagree on the exact threshold between passive and active investing, but the concept of passive investing still has meaning.
By “passive investing,” most people mean some form of broadly-diversified index investing with minimal trading. Although passive investing usually requires substantially less work than active investing, passive investors still have decisions to make. They need to choose an asset allocation, funds, accumulation strategy, rebalancing strategy, decumulation strategy, etc. The term “passive” comes from the fact that there is no need for day-to-day or even week-to-week decisions. It’s possible for passive investment to run on autopilot for a year without adjustment. In contrast, more active strategies need closer attention.
Threat to Active Fund Management
The rise of passive investing is a threat to active fund management. Even factor-based investing that leans toward the passive end of the continuum is threatened by more passive forms of investing. It’s hard to argue against the success of broadly-diversified index investing with minimal trading. So, rather than trying to argue in favour of more active strategies, it’s easier to meander into a pointless discussion about how passive investing doesn’t really exist. Continue Reading…
I’m just sitting on a fence
You can say I got no sense
Trying to make up my mind
Really is too horrifying
So I’m sitting on a fence
The Rolling Stones
Benjamin Graham and David Dodd are universally regarded as the fathers of value investing. In their 1934 book “Security Analysis” they introduced the concept of comparing stock prices with earnings smoothed across multiple years. This long-term perspective dampens the effects of expansions as well as recessions. Yale Professor and Nobel Prize winner Robert Shiller later popularized Graham and Dodd’s approach with his own version, which is referred to as the cyclically adjusted price-to-earnings (CAPE) ratio.
S&P 500 CAPE Ratio: 1881- Present
Since 1881, the CAPE ratio for U.S. equities has spent about half of the time between 10 and 20, with an average and median value of about 16. Its all-time low of 5 occurred at the end of 1920, and its high point of 45 occurred at the end of 1999 during the height of the internet bubble.
What if I told you …. ?
The following table shows average real (after inflation) annualized returns following various CAPE ranges.
S&P 500 Index: CAPE Ratio Ranges vs. Average Annualized Future Returns (1881 Present)
What is abundantly clear is that higher returns have tended to follow lower CAPE ratios, while lower returns (or losses) have tended to follow elevated CAPE levels. An investment strategy that entailed having above average exposure to stocks when CAPE levels were low, below average equity exposure when CAPE levels were high, and average allocations to stocks when CAPE levels were neither elevated not depressed would have resulted in both less severe losses in bear markets and higher returns over the long-term.
By no means does this imply that low CAPE ratios are always followed by periods of strong performance, nor does it imply that poor results are guaranteed following instances of elevated CAPE levels. That would be too easy!
S&P 500 Index: Lowest CAPE Ratios vs. Future Real Returns (1881 – Present)
S&P 500 Index: Highest CAPE Ratios vs. Future Real Returns (1881 – Present)
Looking at the performance of stocks following extreme CAPE levels, it is clear that valuation is best used as a strategic guide rather than as a short-term timing tool. It is most useful on a time scale of several years rather than a shorter-term timing tool.
Although there have been instances where low CAPE levels have been followed by weak performance over the next 1-3 years, there have been no instances in which average annualized returns over the next 5-10 years have not been either average or above average. While it sometimes takes time for the proverbial party to get started when CAPE levels hit abnormally depressed levels, markets have without exception performed admirably over the medium to long-term.
Similarly, although there have been instances where high CAPE levels have been followed by strong performance over the next 1-3 years, there have been no instances in which average annualized returns over the next 5-10 years have not been either below average or negative. Whenever CAPE levels have been extremely elevated, it has only been a matter of time before the valuation reaper exacted its toll on markets. This brings to mind the following quote from Buffett:
“After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
Be the House, Not the Chump
There have been (and inevitably will be) times when equities post strong returns for a limited time following elevated CAPE levels and instances where stocks post temporarily weak results following depressed CAPE levels.
However, successful investing is largely about playing the odds. If you were at a casino, wouldn’t you prefer to be the house rather than the chump on the other side of the table? Although chumps occasionally get lucky, this doesn’t change the fact that the odds aren’t in their favour and that they are playing a losing game. Over the long-term, investors who refrain from reducing their equity exposure when CAPE levels are elevated and don’t increase their allocations to stocks when CAPE levels are depressed will achieve satisfactory returns over extended periods. That being said, I sure wouldn’t recommend such a static approach for the simple reason that it involves suffering severe setbacks in bear markets and leaving a lot of money on the table over the long-term.
Given the historically powerful relationship between starting CAPE levels and subsequent returns, what if I told you that the CAPE ratio currently stands at 38, putting it at the top 98th percentile of all year-end observations going back over 150 years, and the top 96th percentile over the past 50 years? Presumably you would at the very least consider taking a more cautious stance on U.S. stocks.
Let’s Pretend ….
Let’s pretend that you knew nothing about the historical relationship between CAPE levels and subsequent returns. A combination of behavioural biases, speculative fervour, and FOMO (fear of missing out) might lead you to adopt an “if it isn’t broken, don’t fix it” stance of inertia.
Recency bias can give people a false sense of confidence that what has occurred in the recent past is “normal” and is therefore likely to continue in the future. Moreover, the strong returns which have occurred since the global financial crisis can exacerbate FOMO, thereby prompting investors to stay at the party (and perhaps even to imbibe more intensely by increasing their equity exposure). Lastly, the potential of innovative technologies such as AI to revolutionize businesses can capture investors’ imaginations and incite euphoria to the point where they believe that there is no price that is too high to pay for the unlimited profit potential of the “shiny new toy.”
Standing at the Crossroads
So here we stand at a crossroads, caught between the weight of history and the possibility that this time it may truly be different. What is an investor to do? One can never be 100% sure. The “right” answer will only be known in hindsight once it becomes a matter of record, at which point it will be too late for investors who get caught on the wrong side of the fence. Continue Reading…
Investing doesn’t have to be intimidating. Learn how BMO’s Asset Allocation ETFs are designed to take the complexity out of the equation, giving you an all-in-one solution that balances your portfolio without all the stress and second-guessing.
Image courtesy BMO ETFs/Getty Images
By Zayla Saunders, BMO ETFs
(Sponsor Content)
Have you ever found yourself thinking, “I really want to start investing, but where do I even begin?”
It’s easy to feel overwhelmed: between all the jargon, acronyms, and that mysterious “ticker talk” (yes you got it, those ETF symbols), it can seem like a lot to handle. Figuring out what to invest in, how much of each asset to hold, and when to rebalance? It’s enough to make anyone feel stuck, even the most analytical among us.
But here’s the thing: investing doesn’t have to be intimidating. BMO’s Asset Allocation ETFs are designed to take the complexity out of the equation, giving you an all-in-one solution that balances your portfolio without all the stress and second-guessing.
What are Asset Allocation ETFs?
Asset allocation ETFs are portfolios built with a pre-determined asset mix. Within that mix, you’ll find a variety of asset classes, like fixed income and equities, across various indexes, sectors, and countries. Instead of having to manually automate and rebalance your portfolio, these ETFs have an automated re-balance set to bring it back to your determined asset mix, for a low cost.
For example, the BMO All-Equity ETF (ZEQT) focuses on growth by allocating a higher percentage to equities, while the BMO Conservative ETF (ZCON) has a conservative approach with a higher allocation to fixed-income securities. This flexibility means that investors, whether just starting out or nearing retirement, can find a product that matches their goals.
Asset allocation ETFs provide a one-stop-shop for those looking for broad diversification, considering each investors unique goals and desired asset mix.
Solving a Problem: The Origins of Asset Allocation ETFs
To understand the popularity and importance of asset allocation ETFs, it can help to look back in time to how these useful tools came to existence. The concept was born out of a problem faced by many investors: managing a diverse investment portfolio, while sticking to their chosen asset allocation.
Imagine an investor in the early 2000s with a mix of individual stocks, bonds, and perhaps some mutual funds. Every year, they had to review their portfolio and adjust the weightings to match their evolving goals, all while considering tax implications, trading costs, and time constraints. Not only was this time-consuming, but there was also room for human error—sometimes leading to portfolios that were overly concentrated in certain sectors or regions.
The financial crisis of 2008 further highlighted the need for better portfolio management. Investors who had failed to properly diversify or rebalance suffered significant losses, while those who had a more disciplined approach weathered the storm more effectively. Recognizing these challenges, ETF providers like BMO saw an opportunity to create a product that simplified the investment process. The idea was simple but powerful: create an all-in-one ETF that would offer diversification, automatic rebalancing, and cost efficiency. By using ETFs as the building blocks, providers could offer exposure to global markets and different asset classes at a fraction of the cost of traditional mutual funds. Thus, the asset allocation ETF was born.
Source: BMO Global Asset Management, BMO Growth ETF (ZGRO:TSX), as of September 18th 2024
The portfolio holdings are subject to change without notice and may only represent a small percentage of portfolio holdings. They are not recommendations to buy or sell any particular security.
Why does the Mix Matter?
The famous Brinson, Hood, and Beebower (BHB) study, published in 1986, found that over 90% of a portfolio performance variability is driven by asset allocation, not stock picking or market timing.
This shifted how investors approach portfolio management, emphasizing the importance of diversification across asset classes for long-term success. Most asset allocation ETFs, or funds for that matter, are now built on this principle. Reinforcing the idea that asset allocation, rather than stock-picking or timing, drives the bulk of long-term investing success: a perfect fit for investors looking for a hands-off “couch-potato” way to build their wealth.
Why Asset Allocation ETFs?
Simplicity and Convenience
Asset allocation ETFs take care of the heavy lifting. With automatic rebalancing and built-in diversification, you get a hands-off investment strategy.
Diversification
These ETFs provide exposure to a broad mix of global stocks, ensuring you’re well diversified across sectors and regions, whether you prefer a conservative, growth, or somewhere in-between approach.
Cost-Effective
One of the biggest advantages of ETFs is their cost-effectiveness, and BMO asset allocation ETFs are no exception. Additionally, with fewer transactions needed to maintain the portfolio, investors can avoid high trading costs.
Long-term Focus
Asset allocation ETFs are designed with a long-term perspective in mind, making them ideal for investors focused on building wealth. By keeping a steady asset mix and rebalancing regularly, these ETFs help investors avoid emotional decision-making that often leads to buying high and selling low.
The T Series: A Tailored Solution for Retirees
One of the newer innovations in BMO’s lineup of asset allocation ETFs is the T series1, specifically designed for retirees and those nearing retirement. Retirees often face the challenge of generating a steady cash flow from their investments while minimizing the risk of running out of money. The T series solves this problem by offering a systematic withdrawal plan, allowing investors to receive monthly cash flow helping to ease retirement planning.
For example, the BMO Balanced ETF (T6 Series) (ZBAL.T) is a T series ETF designed to provide steady cash flow by investing in a balanced mix of equities and bonds. The fund pays out fixed monthly distributions (6% annualized)2 that are a blend of income and return of capital, which is especially valuable for in retirement.
Conclusion
BMO Asset Allocation ETFs offer a simple, diversified, and cost-effective solution for investors at every stage of life. Whether you’re just starting out, looking for steady growth, or planning for retirement, these ETFs provide the perfect blend of convenience and financial security. For retirees, the T series includes the benefits of consistent cashflow, making it easier to manage withdrawals during retirement.
With BMO’s asset allocation ETFs, investors can feel confident in their financial future, knowing they’ve chosen a product that aligns with their long-term goals and offers peace of mind in any market condition.
For more information visit BMO Global Asset Management to learn more.
1 T series – These units are Fixed Percentage Distribution Units that provide a fixed monthly distribution based on an annual distribution rate of 6%. Distributions may be comprised of net income, net realized capital gains and/or a return of capital. The monthly amount is determined by applying the annual distribution rate to the T Series Fund’s unit price at the end of the previous calendar year, arriving at an annual amount per unit for the coming year. This annual amount is then divided into 12 equal distributions, which are paid each month.
2 Standardized Performance: ZBAL.T, BMO Balanced ETF (T6 Series) 1 Year: 15.91%, Since Inception: 5.96% as of August 30th, 2024.
ZGRO.T, BMO Growth ETF (T6 Series) 1 Year: 18.78%, Since Inception: 14.61% as of August 30th, 2024.
Zayla Saunders is Senior Associate, Online Distribution for BMO Exchanged Traded Funds. As a member of BMO Global Asset Management’s ETF Direct Distribution Team, Zayla brings more than a decade of experience in finance. She holds the Chartered Investment Manager (CIM) designation is a graduate of the University of Manitoba. Since joining BMO in 2020, Zayla has focused on making ETF investing accessible through strategic partnerships content creation, and industry collaborations. Know for her client-focused expertise and investment knowledge, she empowers investors to make informed, confident decisions.
Disclaimer:
This article has been sponsored by BMO ETFs.
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When it comes to stocks, index investing offers many advantages over other investment approaches. However, these advantages don’t always carry over to other asset classes. No investment style should be treated like a religion, indexing included. It pays to think through the reasons for using a given approach to investing.
Stocks
Low-cost broadly-diversified index investing in stocks offers a number of advantages over other investment approaches:
Lower costs, including MERs, trading costs within funds, and capital gains taxes
Less work for the investor
Better diversification, leading to lower-volatility losses
Choosing actively-managed mutual funds or ETFs definitely has much higher costs. For investors who just pick some actively-managed funds and stick with them, the amount of work required can be low, but more often the investor stays on the lookout for better funds, which can be a lot of work for questionable benefit. Many actively-managed funds offer decent diversification. Ironically, the best diversification comes from closet index funds that charge high fees for doing little.
Investors who pick their own stocks to hold for the long term, including dividend investors, do well on costs, but typically put in a lot of work and fail to diversify sufficiently. Those who trade stocks actively on their own tend to suffer from trading losses and poor diversification, and they put in a lot of effort for their poor results. Things get worse with options.
Despite the advantages of pure index investing in stocks, I make two exceptions. The first is that I own one ETF of U.S. small value stocks (Vanguard’s VBR) because of the history of small value stocks outperforming market averages. If this works out poorly for me, it will be because of slightly higher costs and slightly poorer diversification.
One might ask why I don’t make exceptions for other factors shown to have produced excess returns in the past. The reason is that I have little confidence that they will outperform in the future by enough to cover the higher costs of investing in them. Popularity tends to drive down future returns. The same may happen to small value stocks, but they seemed to me to offer enough promise to take the chance.
The second exception I make to pure index investing in stocks is that I tilt slowly toward bonds as the CAPE10 of the world’s stocks grows above 25. I think of this as easing up on stocks because they have risen substantially, and I have less need to take as much risk to meet my goals. It also reduces my portfolio’s risk at a time when the odds of a substantial stock market crash are elevated. But the fact that I think of this measure in terms of risk control doesn’t change the fact that I’m engaged in a modest amount of market timing.
At the CAPE10 peak in late 2021, my allocation to bonds was 7 percentage points higher than it would have been if the CAPE10 had been below 25. This might seem like a small change, but the shift of dollars from high-flying stocks to bonds got magnified when combined with my normal portfolio rebalancing.
Another thing I do as the CAPE10 of the world’s stocks exceeds 20 is to lower my future return expectations, but this doesn’t include any additional portfolio adjustments.
Bonds
It is easy to treat all bonds as a single asset class and invest in an index of all available bonds, perhaps limited to a particular country. However, I don’t see bonds this way. I see corporate bonds as a separate asset class from government bonds, because corporate bonds have the possibility of default. I prefer to invest slightly more in stocks than to chase yield in corporate bonds.
I don’t know if experts can see conditions when corporate bonds are a good bet based on their risk and the additional yield they offer. I just know that I can’t do this. I prefer my bonds to be safe and to leave the risk to my stock holdings.
I also see long-term government bonds as a different asset class from short-term government bonds (less than 5 years). Central banks are constantly manipulating the bond market through ramping up or down on their holdings of different durations of bonds. This manipulation makes me uneasy about holding risky long-term bonds.
Another reason I have for avoiding long-term bonds is inflation risk. Investment professionals are often taught that government bonds are risk-free if held to maturity. This is only true in nominal terms. My future financial obligations tend to grow with inflation. Long-term government bonds look very risky to me when I consider the uncertainty of inflation over decades. Inflation-protected bonds deal with inflation risk, but this still leaves concerns about bond market manipulation by central banks.
Once we eliminate corporate bonds and long-term government bonds, the idea of indexing doesn’t really apply. For a given duration, all government bonds in a particular country tend to all have the same yield. Owning an index of different durations of bonds from 0 to 5 years offers some diversification, but I tend not to think about this much. I buy a short-term bond ETF when it’s convenient, and just store cash in a high-interest savings account when that is convenient.
Overall, I’m not convinced that the solid thinking behind stock indexing carries over well to bond investing. There are those who carve up stocks into sub-classes they like and don’t like, just as I have done with bonds. However, my view of the resulting stock investing strategies, such as owning only some sub-classes or sector rotation, is that they are inferior to broad-based indexing of stocks. I don’t see broad-based indexing of bonds the same way.
Real estate
Owning Real-Estate Investment Trusts (REITs) is certainly less risky than owning a property or two. I’ve chosen to avoid additional real estate investments beyond the house I live in and whatever is held by the companies in my ETFs. So, I can’t say I know much about REITs. Continue Reading…
Since 2008, there has been a major shift from actively managed funds into passive, index-tracking investments. During this time, more than $1 trillion has flowed from actively managed U.S. equity funds into their passive counterparts, which have increased their share of the U.S. investment pie from under 20% to over 40%.
The Efficient Market Theory and Active Management: Why Bother?
The theory underlying passive investing is the efficient-market hypothesis (EMH), which was developed in the 1960s at the Chicago Graduate School of Business. The EMH states that asset prices reflect all available information, causing securities to always be priced correctly, thereby making markets efficient. By extension, it asserts that you cannot achieve higher returns without assuming a commensurate amount of incremental risk, nor can you reduce risk without sacrificing a commensurate amount of return. In essence, the EMH contends that it is impossible to consistently “beat the market” on a risk-adjusted basis. When applied to the decision to hire an active manager rather than a passive index fund, the EMH can be neatly summarized as “why bother?”
It might seem that, as an active manager, I am shooting myself in the foot by pointing out the success of passive investing at the expense of its active counterpart … but bear with me for the punchline.
Bogle’s Folly & Not Backing Down
The first index funds were launched in the early 1970s by American National Bank, Batterymarch Financial Management, and Wells Fargo, and were available only to large pension plans. A few years later, the Vanguard First Index Investment Fund (now the Vanguard S&P 500 Index Fund), was launched as the first index fund available to individual investors. The fund was the brainchild of Vanguard founder Jack Bogle, who believed that it would be difficult for actively managed mutual funds to outperform an index fund once their costs and fees were subtracted from returns. His goal was to offer investors a diversified fund at minimal cost that would give them what he called their “fair share” of the stock market’s return.
In its initial public offering, the fund brought in only $11.3 million. Vanguard’s competitors referred to the fund as “Bogle’s Folly,” stating that investors wanted nothing to do with a fund that, by its very nature, could never outperform the market. To the benefit of the investing public, Bogle did not back down. Vanguard currently manages over $9 trillion in assets, the bulk of which is in index funds and exchange-traded funds. Importantly, approximately half of all assets managed by investment companies in the U.S. are invested in Bogle’s Folly and its descendants.
Bogle permanently changed the investment industry. Any investors can purchase shares of low-cost index funds in almost every global asset class. At Berkshire Hathaway Inc.’s 2017 annual meeting, Buffett estimated that by making low-cost index funds so popular for investors, Bogle “put tens and tens and tens of billions of dollars into their pockets.” According to Buffett, “Jack did more for American investors as a whole than any individual I’ve known.”
The Numbers Don’t Lie: Hype vs. Reality
In most cases, the long-term evidence makes it hard to strongly disagree with the EMH, and by extension to advocate for active over passive management. Specifically, active management has by and large failed to deliver.
According to S&P Global, 78.7% of U.S. active large-cap managers have underperformed the S&P 500 Index over the past five years ending December 31, 2023.
A $10 million investment in the index made at the end of 2018 would be worth $20,724,263 five years later, as compared to an average value for active managers of $18,481,489, representing a shortfall of $2,242,774 vs. the index.
Extrapolating the different rates of return of the index and active managers for another five years, the average shortfall of active managers increases from $2,242,774 to $8,792,966. After 20 years, the difference grows by an additional $59,006,123 to $67,799,089.
The Canadian experience has been similarly damning:
According to S&P Global, 93.0% of Canadian equity managers have underperformed the TSX Composite Index over the past five years ending December 31, 2023.
A $10 million investment in the index made at the end of 2018 would be worth $17,079,526 five years later, as compared to an average value of $15,217,594 for active managers, representing a shortfall of $1,861,932 vs. the index.
Extrapolating the different rates of return of the index and active managers for another five years, the average shortfall of active managers increases from $1,861,932 to $6,013,505. After 20 years, the difference grows by an additional $25,454,288 to $31,467,793.
Given these dire statistics, it is no wonder that swaths of institutional and individual investors have migrated from active management to passive investing. Investors have been getting the message that the proclaimed advantages of active management are more hype than reality.
Acceptable Failure, Unacceptable Failure & Michael Jordan
Legendary basketball superstar Michael Jordan stated, “I can accept failure, everyone fails at something. But I can’t accept not trying.” Relatedly, within the sphere of active management it is imperative to discern between what I refer to as sincere and disingenuous underperformers.
Sincere underperformers try their level best to outperform (an “A” for effort scenario). These active efforts entail expenses that passive funds do not face, such as paying investment professionals to analyze companies with the goal of identifying stocks that will outperform. These extra costs must be passed on to investors, resulting in higher fees than passive vehicles. In contrast, disingenuous underperformers are not truly trying to outperform. Their portfolios more or less replicate their benchmark indexes. Such funds, which are pejoratively referred to as “closet indexers”, are charging active management fees for doing something that investors could do for a fraction of the cost by investing in an index fund or ETF – good work if you can find it!
An academic study titled, “The Mutual Fund Industry Worldwide: Explicit and Closet Indexing, Fees, and Performance,” determined the pervasiveness of closet indexers across a sample of developed countries. Out of the 20 countries included in the study, Canada ranked highest in terms of its percentage of purportedly active mutual fund assets that are actually invested in closet index portfolios. Every year, billions of dollars in fees are unjustifiably being charged to investors.
Don’t Throw the Baby Out with the Bathwater
Although the historical data clearly indicate that the vast majority of managers have underperformed their benchmarks, this is not universally the case. Although few and far between, there are managers who have outperformed, either in simple terms, in risk-adjusted terms, or both.
According to S&P Global, 93.9% of Canadian dividend-focused funds have underperformed over the past five years. In sharp contrast, the algorithmically driven Outcome Canadian Equity Income Fund has outperformed the iShares TSX Dividend Aristocrats Index ETF (symbol CDZ) by 13.1% since its inception nearly six years ago in October 2018. A $10 million investment in the OCEI fund made at its inception would have a value of $$17,731,791 as of the end of last month, as compared to a value of $16,426,492 for the iShares TSX Dividend Aristocrats Index ETF. Importantly, the fund has achieved these higher returns while exhibiting significantly less volatility and shallower losses in declining markets. In combination, the fund’s higher returns and lower volatility have enabled it to achieve a risk-adjusted return (Sharpe ratio) that is 49.9% higher than its benchmark.
Noah Solomon is Chief Investment Officer for Outcome Metric Asset Management Limited Partnership. From 2008 to 2016, Noah was CEO and CIO of GenFund Management Inc. (formerly Genuity Fund Management), where he designed and managed data-driven, statistically-based equity funds.
Between 2002 and 2008, Noah was a proprietary trader in the equities division of Goldman Sachs, where he deployed the firm’s capital in several quantitatively-driven investment strategies. Prior to joining Goldman, Noah worked at Citibank and Lehman Brothers. Noah holds an MBA from the Wharton School of Business at the University of Pennsylvania, where he graduated as a Palmer Scholar (top 5% of graduating class). He also holds a BA from McGill University (magna cum laude).
Noah is frequently featured in the media including a regular column in the Financial Post and appearances on BNN. This blog originally appeared in the August 2024 issue of the Outcome newsletter and is republished here with permission.
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