Down goes the Dow

Fred,

= (Muppets to the tenth power) * 3.16

Igy

Yeah I was pretty sure you were talking out your arse

Igy

Fidelity low priced stock; fidelity growth company; federated capital preservation... Are These sound investments for my 401k?

I'm a novice when it comes to investing so bear with me

[quote]Hellooooo? wrote:

Nothing has changed? Maybe not for you because you panicked and pulled out of the market, but the rest of us enjoyed a very nice bull market.[/q

Really? All those stocks you bought when the Dow was over 18,000 have paid off for you? Over 17,000?

Did you mean all the stocks I sold when the Dow was over 18k?

Dizzy,

It would be improper to give investment advice here. Investment advice should by based on age and risk tolerance. If you are starting your 401k the target date funds if available are a good place to begin. Reach out to your benefits coordinator or provider for education materials. Educating yourself to asset allocation strategies would be beneficial as well.

Good luck.

Igy

I'm back....the walking brain dead....

I think the top of active vs. passive came up recently - according to this week's barrons, 2015 was yet another year of underperformance for large active funds.

SPX +0.8%

average active fund -2%

44% of active managers beat their benchmarks

(up from 2014 when just 27% beat their benchmarks)

While at some point sure active will beat passive, it's a losing bet most of the time.

Hellooooo? wrote:

Did you mean all the stocks I sold when the Dow was over 18k?

I see.

First you rip me for selling stocks and telling the board about it. I am crazy to time the market.

Then you claim to have sold your stocks when the dow was over 18k. You of course said nothing at the time and this contradicts your own never time the market hasbara.

The bankers are controlling the market to keep the average invested down. Majority of investment is in retirement funds. They sell off, the market drops. The average man loses money, the sellers make it. They buy low, prices go back up. Repeat.

Ever notice you retirement drops 20-30% when the market drops but doesn't rebound with the market as quickly.

People are getting rich off your 401k.

I buy stocks at times. I sell stock at times. Some are winners. Some are losers.

What I don't do is sell everything at once. That wouldn't be wise just in case the market goes up after that for, say, 2+ years.

:-)

agip,

An easy explanation of the underperformance is the composition of the index, if you use equally weighted S&P the advantage goes away. Also, you use a market low rather than high the advantage disappears. I would prefer to be with an active manager at this stage of the market cycle.

Igy

You must prefer to lose money.

Ghost of Igloi wrote:

agip,

An easy explanation of the underperformance is the composition of the index, if you use equally weighted S&P the advantage goes away. Also, you use a market low rather than high the advantage disappears. I would prefer to be with an active manager at this stage of the market cycle.

Igy

well when comparing active vs. passive you can't change your index every year - you have to pick one and go with it year after year. The regular sp500 is the standard.

I wonder if active did better than passive in 2008.

agip,

Active outperformed.

Igy

Say,

Let's compare notes in a year.

Igy

Ghost of Igloi wrote:

agip,

Active outperformed.

Igy

any proof of that?

agip wrote:

Ghost of Igloi wrote:

agip,

Active outperformed.

Igy

any proof of that?

I found this - a S&P study that found massive underperformance by active managers in bear markets of 2008 and 2002. So this study goes against your statement.

"Standard and Poor’s has been measuring the performance of active managers against

their passive counterparts with its S&P Indices Versus Active Funds (SPIVA) studies

since 2002, and its latest publication focuses on the bear market of 2008. The study

concludes that “the belief that bear markets favor active management is a myth. A

majority of active funds in eight of the nine domestic equity style boxes were

outperformed by indices in the negative markets of 2008. The bear market of 2000 to

2002 showed similar outcomes.”

The race wasn’t even close. According to the SPIVA study, in 2008 passive indices

beat active managers across asset classes and style boxes, with very few exceptions."

The article does find flaws with the study, but clearly you may want to reconsider your views here.

agip,

Here is a somewhat different conclusion on the charts. Intuitively it would make more sense to be with manager that can go to cash. One of the issues with this comparison becomes active managers with x years of performance so you have a tracking record. If for example you used proprietary index funds rather than a tracking index you would bump into the same limitations. Anyway here is that article, I will post others should I find them.

http://www.nepc.com/writable/research_articles/file/2012_07_nepc_active_vs_passive.pdf

Igy