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      05-04-2013, 09:12 PM   #23
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      05-06-2013, 11:26 PM   #24
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      05-07-2013, 12:00 AM   #25
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bitcoins
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Don't tell me you have one of those monster computers bitcoin mining all day...
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      05-07-2013, 12:03 AM   #26
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i don't have a bitcoin account but have read about it and it seems like something that could work. cash is only worth something if people believe it is... else it's just firewood. if enough people use bitcoins it's digital cash.
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      05-07-2013, 11:17 PM   #27
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Really now....
Don't tell me you have one of those monster computers bitcoin mining all day...
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      05-08-2013, 12:37 AM   #28
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      05-08-2013, 05:03 PM   #29
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index funds
stock, bond, long term treasury funds
as a former inst pm, I don't believe in active mgmt go figure
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      05-08-2013, 06:05 PM   #30
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Care to elaborate a bit on why?
sure. it's kind of like 'when you see how sausage is made, you lose some of your taste for it'

there are many (but not all) managers out there that routinely take more risk than their benchmarks and market it as "skill", or "alpha". then, they want to be paid a higher fee for "alpha" when in fact all they're doing is exposing their clients to "beta". the financial crisis exposed some of these managers.

you can think of fees as a very stable form of "negative alpha" and if you're an investor, it comes out of your pocket.
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      05-08-2013, 06:10 PM   #31
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index funds
stock, bond, long term treasury funds
as a former inst pm, I don't believe in active mgmt go figure
What funds in particular?
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      05-08-2013, 06:14 PM   #32
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What funds in particular?
sorry, no names. you could probably figure out what index funds are out there, who's consistent, who's not, who has lowest / highest fees, and what mix of any of them would fit your investment objectives.
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      05-08-2013, 06:53 PM   #33
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      05-08-2013, 06:54 PM   #34
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Originally Posted by mlifxs View Post
sorry, no names. you could probably figure out what index funds are out there, who's consistent, who's not, who has lowest / highest fees, and what mix of any of them would fit your investment objectives.
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      05-08-2013, 06:56 PM   #35
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      05-08-2013, 06:58 PM   #36
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Quote:
Originally Posted by mlifxs View Post
sure. it's kind of like 'when you see how sausage is made, you lose some of your taste for it'

there are many (but not all) managers out there that routinely take more risk than their benchmarks and market it as "skill", or "alpha". then, they want to be paid a higher fee for "alpha" when in fact all they're doing is exposing their clients to "beta". the financial crisis exposed some of these managers.

you can think of fees as a very stable form of "negative alpha" and if you're an investor, it comes out of your pocket.
In that case I completely agree. I thought you were insinuating you believed in a “buy and hold” strategy with your personal portfolio rather than actively managing your investments based on market conditions.

I too am a big believer in ETFs over mutual funds. If nothing else because you’ll save yourself as much as 1.5% a year just in fund expenses. The other added part is that many fund managers are simply trying to match their benchmarks. Most people don’t realize that over half of mutual funds (the exact number escapes me) can’t even beat their benchmarks after accounting for fees/expenses.

I read an abstract called “Active Share and Mutual Fund Performance” by Antti Petajisto. It was a phenomenal research paper on the fact that few fund managers outperform their benchmarks.

A few key highlights from the abstract (most of this information covers the time period from 01/08-12/09:

1.) The average actively managed fund loses to its benchmark by .41%
2.) The only group adding value to investors have been the most active stock pickers. They have beaten their benchmarks by 1.26% after fees/expenses (+2.61% before)
3.) Closet indexers usually just match the benchmark returns before fees. Essentially, in those cases, you’re getting the return of the benchmark, but paying the fees of a mutual fund.

Mutual funds CAN be wise, but pick an active actively managed fund (yes you read that right) if you want the best chance of the extra money you’re spending to actually going somewhere.
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      05-08-2013, 08:37 PM   #37
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Quote:
Originally Posted by mmahany View Post
In that case I completely agree. I thought you were insinuating you believed in a “buy and hold” strategy with your personal portfolio rather than actively managing your investments based on market conditions.

I too am a big believer in ETFs over mutual funds. If nothing else because you’ll save yourself as much as 1.5% a year just in fund expenses. The other added part is that many fund managers are simply trying to match their benchmarks. Most people don’t realize that over half of mutual funds (the exact number escapes me) can’t even beat their benchmarks after accounting for fees/expenses.

I read an abstract called “Active Share and Mutual Fund Performance” by Antti Petajisto. It was a phenomenal research paper on the fact that few fund managers outperform their benchmarks.

A few key highlights from the abstract (most of this information covers the time period from 01/08-12/09:

1.) The average actively managed fund loses to its benchmark by .41%
2.) The only group adding value to investors have been the most active stock pickers. They have beaten their benchmarks by 1.26% after fees/expenses (+2.61% before)
3.) Closet indexers usually just match the benchmark returns before fees. Essentially, in those cases, you’re getting the return of the benchmark, but paying the fees of a mutual fund.

Mutual funds CAN be wise, but pick an active actively managed fund (yes you read that right) if you want the best chance of the extra money you’re spending to actually going somewhere.
I think you make some good points and bring good data to the discussion. Most managers under-perform....and I think you and I might agree (from your closet indexer remark) that, if you're going to accept market average returns, make sure you don't give up to much in fees.

On the other hand, the task of finding a fund or strategy that outperforms consistently is not easy, even for people who are in the business and pursuing it 24/7. Such investors / funds exist and can point to historical performance to claim it. It's hard to know how they will do going forward.

For me, it made more sense (in terms of creating wealth) to put all of my effort into my career success and saving. It made more sense for my personal savings to accept low-fee market returns and pursue a long term saving/ investment strategy that matched my retirement horizon and risk tolerances, even though I was in the biz. Some of this came from seeing first hand or through the experiences of very talented people, how difficult it is to out-perform the market (in addition to my previous remarks about manager claims of "skill" vs "beta").
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      05-09-2013, 10:25 AM   #38
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Quote:
Originally Posted by mlifxs View Post
I think you make some good points and bring good data to the discussion. Most managers under-perform....and I think you and I might agree (from your closet indexer remark) that, if you're going to accept market average returns, make sure you don't give up to much in fees.

On the other hand, the task of finding a fund or strategy that outperforms consistently is not easy, even for people who are in the business and pursuing it 24/7. Such investors / funds exist and can point to historical performance to claim it. It's hard to know how they will do going forward.

For me, it made more sense (in terms of creating wealth) to put all of my effort into my career success and saving. It made more sense for my personal savings to accept low-fee market returns and pursue a long term saving/ investment strategy that matched my retirement horizon and risk tolerances, even though I was in the biz. Some of this came from seeing first hand or through the experiences of very talented people, how difficult it is to out-perform the market (in addition to my previous remarks about manager claims of "skill" vs "beta").
I will admit that I'm a bit of a "ringer" like you are.

There are very few mutual funds I can continuously keep in my toolbelt. Of course their performance is in no way ever guaranteed, but it's hard to argue with the fact that Wells Fargo Advantaged Growth, Lord Abbett Short Duration Income, and/or Franklin Templeton Global Bond have tremendous track records.
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      06-25-2013, 01:03 PM   #39
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