CLIENT LOGINWEB MEETING
Page 1 Page 2 Page 3 Click Here for Step 8







 
7.1
Introduction

The term "silent partners" refers to the numerous parties who silently share in the realized and unrealized gains on an investment. Fees, expenses, taxes, and inflation are silent partners that can set an investor back before returns even begin. The investment costs alone of the average active fund can consume nearly fifty-five percent of its gross wealth. By investing in index funds, however, high costs and high taxes can be avoided. In this case, the only uncontrollable partner is inflation.

One illustration over a fifteen-year period demonstrates that 40% of total return is allocated to silent partners. On a $10,000 investment, this translates to $41,000 of compounded return. An index fund limits the partners' take to only 13%. In tax-managed index funds, the percentage is even lower. This step discusses the unnecessary partners involved in your returns and how to keep them from eating slices of your "returns pie."
 
Step 7
Quotes

Theodore Aronson " None of my clients are taxable... Once you introduce taxes, active management probably has an insurmountable hurdle. We've been asked to manage taxable money -- and declined "
Theodore Aronson of Aronson+Partners, Institutional Money Manager (as seen in previous steps, active management doesn't work in tax deferred accounts either)
"If you can eliminate the government as a 39.6% partner, then you will be much better off."
Warren E. Buffett, Chairman, Berkshire Hathaway
Jean Baptiste Colbert "The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing."
Jean Baptiste Colbert

Page 1 Page 2 Page 3 Click Here for Step 8
Call or Email
Copyright © 1999-2008 Index Funds Advisors, Inc. All rights reserved.
 

This site is for the use of clients and potential clients of Index Funds Advisors, Inc. and the IFA Network Members. It is not to be used by any other investment advisor or investment professional as an information/marketing materials source, asset allocator, risk capacity or risk tolerance assessment, or for any other purpose. If your financial advisor is using this site without a license from Index Funds Advisors, Inc., they are violating our copyright and their ethics are highly in question. The right to download, store and/or output any material on this internet site, or the Index Funds: The 12-Step Program for Active Investors eBook, is granted for viewing use only and this grant only applies to clients and potential clients of Index Funds Advisors, Inc. and the IFA Network Members. Reproduction or editing by any means, mechanical or electronic, in whole or in part, without the express written permission of Index Funds Advisors, Inc. is strictly prohibited and subject to prosecution under U.S. and International copyright and trademark laws.

DISCLAIMER: THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY LINKED INTERNET SITE. At certain places on this Index Funds Advisors Internet site, live 'links' to other Internet addresses can be accessed. Such external Internet addresses contain information created, published, maintained, or otherwise posted by institutions or organizations independent of Index Funds Advisors. Index Funds Advisors does not endorse, approve, certify, or control these external Internet addresses and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, timeliness, or correct sequencing of information located at such addresses. Use of any information obtained from such addresses is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference therein to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by Index Funds Advisors.Your use of this site is acknowledgment that you have read and understood the full disclaimer. Past performance does not guarantee future results.

WARNING: Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any mutual fund, index or actively managed, does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. Actively managed funds sometimes outperform index funds. You just don't know in advance which actively managed fund will outperform the appropriate index. Just because a mutual fund is an index mutual fund, it does not guarantee a performance superior to an actively managed mutual fund. There are no absolute guarantees in investing. When reviewing any backtested performance information on this internet site, please read the Disclosure for Backtested Performance Information (click here to read the Disclosure for Backtested Performance Information.)

Index Funds Advisors, Inc.  —  19100 Von Karman Ave., Suite 450  —   Irvine, CA 92612  —  
Call Toll Free: 888-643-3133
Local Phone: 949-502-0050  —  Fax: 949-502-0048 — Email: info @ ifa . com