Investment Fund Return = Total Index Return - Fund Managers Bonus.
It still beats my return when I try and do it alone.
Investment Fund Return = Total Index Return - Fund Managers Bonus.
It still beats my return when I try and do it alone.
Nothing "dawned", K5. I was just surprised at your sudden insight given your other examples of investment folly. I guess you did teach me that you're not a complete buffoon.
R2D3 wrote:
Investment Fund Return = Total Index Return - Fund Managers Bonus.
It still beats my return when I try and do it alone.
It is impossible for you to consistently underperform index returns. That would require inside info and then you using that to ensure failure.
Pick 50 stocks by using a dart board and you will outperform managed funds due to the fees they charge
K5 detector wrote:
Nothing "dawned", K5. I was just surprised at your sudden insight given your other examples of investment folly. I guess you did teach me that you're not a complete buffoon.
I take it back. The light has not seeped thru
Brian Boru wrote:
R2D3 wrote:Investment Fund Return = Total Index Return - Fund Managers Bonus.
It still beats my return when I try and do it alone.
It is impossible for you to consistently underperform index returns. That would require inside info and then you using that to ensure failure.
Pick 50 stocks by using a dart board and you will outperform managed funds due to the fees they charge
you are oversimplifying. 'index funds' are not all the same.
THere is not ONE index fund that eveyrone should buy.
THere are literally hundreds. Small cap, mid cap, large cap, europe, japan, treasuries, TIPS, reits, japan, brazil, munis, dividend payers, value, etc...
portfolio managers allocate money in appropriate ways to 18-22 asset classes generally.
Brian Boru wrote:
[quote]agip wrote:
correct - that is why I recommend only index funds.
So, I'll ask again, why do you expect a teacher or doctor to be able to put together a diversified portfolio and stick with it even in times like this week?
Why the Hell would anyone have to pay you to recommend index funds? And what makes you so sure that picking a diversified portfolio is such a great idea? And that sticking with it no matter what is such a smart play?
Because that is what the investment industry has told you.
well if we are arguing about the benefits of diversification then we are on different planets and don't have much to argue about.
Brian Boru wrote:
[quote]agip wrote:
You are assuming that people knew in advance that the stock market would have a zero return sans dividends. That could not have been known in advance.
Exactly. Then why would people pay someone for market advice since that someone knows he does not know what is going to happen
the bet is that since in the past a portfolio of diversified stocks and bonds, owned in a low cost, tax efficient manner, provides the best risk adjusted returns over time with the lowest chance for disaster.
So that's what I do, and hope for the best. That's what most good investors do.
Good advisors never claim to be able to predict the future - but they do claim to be able to prepare people for it.
K5, I'm curious where you get/got your investment "knowledge". Care to share?
Wow, lots of action in this thread.
DJIA down 108 in early trading. Again, the day is long.
agip, many of us have extensive experience with bureaucrats and elected officials in the US and elsewhere, in varying capacities.
Situations that are presented are not as simple as you seem to believe they are. There is a sliding scale of truth, where accuracy and precision vary. There are so many forces at work. Leaders are there to shape directions, and they use what they can to that end, including bureaucracies. I will leave it at that.
****************
Regarding being able to predict the future: that depends on the era, and what you mean by prediction. Nobody ever predicts with 100% confidence, predictions are made to a certain chance of likelihood, and always with caveats, to permit adaptability, and conditions and assumptions, to permit revision and comparison. Even today, we have people purporting to predict the future, but they do so with a very low degree of confidence, draw their predictions narrowly, and use tailor-made stats to support their case.
Predictions are also made by leaders (market leaders) to shape the markets to their liking. That is not news. What is news is that at the moment there is less certainty than anybody would like, which makes the path to conflict much easier than the path to consensus. Even within groups there is substantial dissent, and that is why we see substantial personnel turnover and movement at the moment. The standard ethos that encourages people to stay in the markets is getting progressively less tenable, a fact that is discernible when listening to how leaders talk about the market--it is more cautious, narrower, and more strained. "Irrational exuberance" is here a useful term.
In that sense, because there is less confidence in predictions, the "value" of investment counseling decreases. Gone are the days when a large US business would undertake a huge economically viable (within certain parameters) project and expect the wholehearted support of bureaucrats, regulators, and legislators, and therefore gone are the days when one could invest for the long term in these players with an extremely high degree of confidence. The economic viability of many such things was often due to the creation of negative externalities, aided and shaped by government and industry cooperation.
Things are more complicated now. Look at bank resistance to Basel III, for example. Predictability isn't as easy, and even where it is, profitability is inevitably compromised.
So, while investment counseling services are provided, and can have some value, the real question is what the actual price of the value should be, which is of course up to "the market" to decide, a market which, like many others, favors immensely the industry status quo. People are beginning to avail themselves of options, though, as yields have decreased and fees are figuring more significantly, as people belt-tighten. Lots of $ have recently been flowing into low-cost vehicles, as a result.
DJIA down 150 now after an hour of trading, below 16k again.
wow what crazy action right now - small caps are unch but the SP500 is whipping all around down 1.5%, flat etc.- crazy!
Probably big money is buying and selling huge futures contracts in the SP500 and ignoring the smaller,less liquid names.
Wild!
no idea if this is bullish or bearish, but the vix hit 31 - highest since the 2011 euro freakout. A vix at 31 is bullish.
"Probably big money is buying and selling huge futures contracts in the SP500"
Yes.
Brian Boru wrote:
Pointing Out the Obvious wrote:Your (2) does not in any way support your (1).
Each statement is true on its own. However, if you don't understand how the fact that nobody can predict the market supports the statement that investment advice is worthless, then you really ought to stay off this thread.
You seem to have no grasp of basic logic.
But hey, that's OK. Great to have you back and posting like CRAZY again, K5.
Let me guess, the recent market drop has given you renewed confidence that you will not be so completely beaten down by the gang. That's it, no?
A bit past midday, DJIA in slight positive territory now.
Holy activity Batman.
High times.
QE'S BACK BABY!!!! Hope you got in while the buying was right. DOW 17.5K by years end.
Bullard's trial balloon was met with the desired, and expected, response.
Here I thought they were going to end QE and start buying equities, when, what do you know...
Does everybody see how stupid this is?
Heck, why don't they run an escalating QE? That way they can ratchet up the markets. I will get in at 16k and out at 17.5
Are you kidding me? Like I said, consumers are out of spending money, re-fi's and cash-out's and heloc's aren't producing as much as was hoped, and house prices aren't rising for various reasons, including lending restrictions put in place by the government. QE is even easier than colluding with the banks again, or just letting the banks go, as was done in the past. Decreasing oversight and regulation decreases government, while QE vastly increases it. Their choice is clear. Somebody has to spend, and because you and I are apparently either too smart, too strapped, or both, to do it, the government will.
I really hope they don't continue or re-instate QE.
DJIA finishes down 25 anyway today, to 16,117. Even a possible QE announcement was insufficient to reverse the orderly daily decline, which is actually a bit surprising. OK, Bullard isn't Yellen, but you know that everybody OK'd the release of the balloon.
I guess Europe is weighing heavily even in the US, where much total corp revenue comes from eurozone sales.
Things are coming to more of a head over there. Heating uncertainties, insane tax rates, and austerity all make for a bad "mood". France is making gigantic military cuts, aimed at lowering their deficit to 3% of GDP. The quotes by Juncker are actually pretty frank, and pretty true.
It is the lack of trust that creates the uncertainty, and it is the uncertainty that makes the market both fluctuate, and go down.
But that's the way it is, and things have been reduced from planning, to gamesmanship. And like in any game, there is lots of cheating, and hardly any of it gets noticed. Also, the rules can't keep up fast enough with the moves on the field. Dangerous times to be in the markets. Luck, acknowledging the broader truths, trusting my own experience and judgment, and narrowly-tailored investments are my order of the day. Not back in yet.
I guess the good news is that there hasn't yet been a huge run on gold, and it might hold steady if they ram through more QE, meaning that the window of time to buy at a reasonable price might be extended.
consumers are not out of spending money, and now with cheap gas they have even more.
agip, you're not living in the real world.
Sure some of us are OK, but many are not, not even according to the libs (apologies if you have no political leanings):
http://www.weeklystandard.com/blogs/biden-middle-class-getting-killed_816366.html
http://money.cnn.com/2014/10/16/news/economy/48-million-americans-poverty-census-bureau/
This, even as midterms loom.
It's even more serious than reported in those 2 links.
With respect, you need to do a reality check, of a broad cross-section of the US.
agip wrote:
you are oversimplifying. 'index funds' are not all the same.
THere is not ONE index fund that eveyrone should buy.
THere are literally hundreds. Small cap, mid cap, large cap, europe, japan, treasuries, TIPS, reits, japan, brazil, munis, dividend payers, value, etc...
portfolio managers allocate money in appropriate ways to 18-22 asset classes generally.
More nonsensical marketing language. You have no idea which index fund will outperform any other one in a specific class, nor whether small caps will outperform large caps at any point in time. You offer no value to your clients (as noted before, that does not apply only to you but to all those in your industry). The only thing to care about in picking an index fund -- if you want to gamble in the market -- is to make sure it is a legit fund not some scam and them find the one with the lowest fees. Nobody needs to pay you for that advice.