IFA Web Sites and Quick Domains:
|1. www.ifa401k.com||20. www.indexfundsday.com|
|25. www.ifatube.com - Youtube Channel|
|26. ifa.com/tlh - Tax Loss Harvesting|
|27. ifa.com/rb - Rebalancing|
|9. www.ifarcs.com||28. ifa.com/gp - Glide Path|
|10. www.ifabt.com||29. ifa.com/ra - Retirement Analyzer|
|11. www.ifaindexes.com||30. pension-gate.com - Pension-Gate|
|12. www.ifaadmin.com||31. ifa.com/florida - Pension-Gate in FL|
|13. www.ifabook.com||32. ifarcsi.com - Risk Capacity Surveys for Institutions|
|14. www.12stepsbook.com||33. IndexFundsBook.com - Hard Bound Book from Amazon|
|15. www.ifa.jobs||34. IndexFundsKindle.com - Kindle Edition|
|16. www.10drisk.com||35. IndexFundsiBook.com - iBook Edition on iTunes|
|17. www.speculationblues.com||36. IndexFundsNook.com - Nook Edition|
|18. www.ifacalendar.com||37. IFAlibrary.com IFA Library|
|19. www.investingforcatholics.com||38. IFAfacebook.com|
News articles about IFA and DFA:
Really Smart Money
on Index Funds - 2002
|All About Hedge Funds and Private Equity|
Buffett says, "Just buy an index fund... sit back and relax"
Listen to Buffett, from Paul Boyer -
Eugene Fama, One of the Investment Communitys Brightest
1. Interviews with Eugene
Fama, University of Chicago Finance Professor and Dimensional
Fund Advisor`s Director of Research. (Fama
5. Fama is rated Number
2 of 120,000 authors in the research paper downloads at ssrn.com. He is the number one Business Author and author of the number
1 downloaded paper of 30
"The EMH does not claim markets are always perfectly rational or that the information reflected in prices is always correct. The consensus view of investors can temporarily result in prices well above or well below stock's intrinsic value. The only condition efficient markets require is that a disproportionate number of market participants does not consistently profit over other participants.
After taking risk into account, do more managers than you'd see by chance outperform with persistence? Virtually every economist who studied this question answers with a resounding "no." Mike Jensen in the Sixties and Mark Carhart in the Nineties both conduct exhaustive studies of professional investors. They each conclude that in general a manager's fee, and not his skill, plays the biggest role in performance. Since mutual funds report performance after deducting fees, the bigger the fee, the worse the performance. Aside from that, expert investors with nearly unlimited resources working around the clock can't seem to out predict the market."
Makes an Asset Class?
New Face of Indexing
Index Funds Advisors Inc. explains how investors can relax and make
By Ken Garner
Buy low, sell high, pick a winner ... the mantra of the active investor. Investing as art, at best, and fortune-telling at worst.
But it doesn't`t have to be that way, according to one online investment advisor. Index Funds Advisors Inc. (IFA), based in Newport Beach, Calif., has created a web site to spread the gospel of index funds investing, which has been scientifically proven to outperform active investing. IFA President Mark Hebner has developed a 12-Step Program, "Active Investors Anonymous™," to help investors understand how they can earn better returns on their investments by trusting the market, not the managers. More...
This is the story of risk and returns in the stock market, with a central focus on the failure of the Long Term Capital investment firm. Source: Nova
Burton Malkiel has been saying since 1973 that professional money managers can`t beat the market. Today his words are accepted wisdom. But a few questions remain. Like: how come international stock pickers are whipping their indexes?
Anna Bernasek interviews Burton Malkiel
FORTUNE: Most fund investors have learned the hard way that the past tells you nothing about the future. Why are you so sure that index funds will continue to outperform?
Malkiel: Here`s why. All investors as a group have to own all the stocks in the market. As a group, they can`t have a gross return different from the market`s, because they have to own the market. Now, the average mutual fund charges expenses of 1.5% per year, while low-cost index funds charge 0.18%. If all investors are going to have the same gross rate of return as the index fund, no better and no worse, the expense ratio difference is going to give index funds an advantage year after year.
And let me give you a second reason: the tax advantages. The index fund just buys and holds, while a regular fund turns over its portfolio as much as once a year. As long as there is an upward trend in the market, you`ll have to pay more tax with a regular fund. And that`s why I`m convinced indexing is going to continue to be a winning strategy. It`s logical.
Interview with Patricia Dunn
Past Chairman, Barclays Global Investors ($1 Trillion of primarily Index Funds under management), one of the world`s largest investment firms.
By Suzanne Woolley
She`d rather bet on an index than on a coin toss.
"BGI believes that good investing, most of the time and for most people, is more about engineering than intuition," she says. "Our products are linked by a philosophy that science rather than art is best for investing."
Q. Under what circumstances might active managers as a group top the index?
A. "When small stocks perform better than big stocks,
the active manager will almost certainly outperform the S&P 500 and we`ll see
headlines like "Indexing Is Dead." But that misses the point, because the S&P
500 reflects only one part of the market--large-cap stocks. When small-caps
start doing well, you`ll want to be in either a broad market index or a small-cap
index. They will have the same advantage over active managers as an S&P 500
index has over large-cap managers."
"...the more you know about how markets work, the more compelling the case for indexing becomes."
Fortune Magazine bears down on Active Management 10/11/99 Issue
Where Have All the Geniuses Gone?
The brilliant mutual fund managers of yore are nearly extinct. The less brilliant are in danger of losing their jobs. Because in today`s hot market, index funds are golden.
by David Whitford
"Where once we saw wizards, artists, financial Michelangelos, now all we see are charlatans."
Live from the Fourth Annual Superbowl of Indexing, Phoenix, AZ
In John Bogle`s Keynote Speech here on Sunday night, he noted next year`s 25th Anniversary of the "First Index Investment Trust", which was incorporated on Dec 31, 1975.
On November 16, 1999 the Vanguard 500 Index Fund crossed the $100 Billion milestone, after starting with $11 million. A remarkable compounded growth rate of 50% per year. It is now only $1 Billion away from taking the Total Asset Crown away from Fidelity`s Magellan Fund.
"The search to identify, in advance, the few winning funds is like looking for a needle in a haystack. Why bother looking for the needle, when you can own the haystack?"
"The fact is that indexers always win.... that is in any financial market-and in any segment of any financial market-indexers owning all of the securities in that market at low cost must provide better returns than the other investors in the market in the aggregate."
"And when the day comes that active managers seem to win, remember that it is only because the data either fails to capture the results of all active managers; or because of statistical errors, such as ignoring survivor bias, sales charges, taxes or data anomalies, of which the most notable is calculating fund returns based on the number of funds rather than assets of funds.
"So, fellow indexers, be of stout heart: Active managers as a group never win"
"...in the stock market casino, it is the croupiers who win"
"Nobel Laureate Paul Samuelson said that indexing is trivially obvious and remarkably sweeping. The secret of success in investing is an obvious one; The Haystack trumps the Needle, almost every time."
Your Roving Index Reporter, Mark Hebner
It`s time to settle the question once and for all.
Should you buy actively managed stock funds in an effort to earn market-beating returns, or should you abandon this quest and instead plunk your money in market-tracking index funds? It`s a question that goes to the heart of stock-fund investing.
To get at the answer, I turned to Ira Weiss, an accounting professor at Columbia Business School. Mr. Weiss, in turn, tapped into a database maintained by the Center for Research in Security Prices at the University of Chicago`s Graduate School of Business.......The bottom line? After adjusting for size and survivorship bias, Mr. Weiss found that funds trailed the S&P 500 by some 1.4 percentage points a year. As it happens, that is what diversified U.S. stock funds currently charge in average annual expenses.......Moreover, in his calculations, Mr. Weiss ignored both fund sales commissions and taxes, which would have made fund returns seem even more bleak. Historically, funds have been far less tax efficient than index funds, which don`t trade actively but instead simply buy and hold the stocks that constitute a market index.
you earn 11.6% for 36 years, a dollar grows to $52," Mr. Bogle
notes. "If you earn 10.2%, the dollar grows to $33. Which would
you rather have, $52 or $33? To ask the question is to answer it."
New money flowing into index funds for this year through Aug. 30 hit $44.59 billion, according to Financial Research of Boston; that`s already ahead of such sales for all of 1998, when index funds attracted $42.47 billion. And this year`s sales numbers show that 37.6% of all net new money is going into index funds -- that`s nearly $4 of every $10 invested, twice the rate in 1998. A decade ago, only 2.1% of fund sales landed in index portfolios.
5 year performance:
Average Index Fund = 24.45% annualized returns
Avg. Dvsfd. Stock Fund = 17.85% annual returns
Source: Lipper, Financial Research Corp.
|The Real Decision , The crucial art of allocating assets hinges on the right index funds. www.businessweek.com|
for Research in Security Prices maintains the most comprehensive
and accurate databases of standard and derived historical data for
NYSE, AMEX and Nasdaq common stocks, Indices data, US Treasury data,
and Mutual Fund data. CRSP also provides Proxy Graphs for 10K SEC
Filing, and custom data sets.Key Strengths
of Stock DataExtensive
We trace changes in company name, CUSIP, ticker, SIC code, exchange, share class and code. This allows for seamless time-series analysis.Complete Corporate Actions
We record distributions, mergers, acquisitions, spin-offs, and splits.Accurate Prices and Total Returns
Since 1960, we have had a hands-on approach to research which is reflected in the high quality of our data.
Our month-end data begins in December 1925 for NYSE. Our end-of-day data begins in 1962 for NYSE and AMEX and 1972 for Nasdaq.
A draft of an upublished research paper (February 1999) discussing the statistics of average returns. The authors continue the development, begun by various authors in earlier papers, of the three-factor risk model that is the foundation for the analysis of return/risk ratios for index fund investment portfolios. This paper is for readers with some knowledge of statistics and especially the statistics of investing.AUTHOR`S ABSTRACT: The value premium in U.S. stock returns is robust. The positive relation between average return and book-to-market equity is as strong for the period 1929-63 as it is for the period 1963-97 studied in earlier papers. A three-factor risk model explains the value premium better than the hypothesis that the book-to-market characteristic is compensated irrespective of risk loadings
book introduces the foundations of investment decision-making. Beginning
with portfolio theory and the tradeoff between risk and return,
it shows how the definition of investor risk depends crucially upon
diversification. It explains modern asset pricing models currently
used to determine the expected rate of return on investments and
finally it presents evidence about what information can be used
for strategic investment advantage. The book is designed for use
in a four-week teaching module for master`s students studying introductory
Finance. It assumes some knowledge of statistics and a familiarity
with the concepts of net present value.
K.R. French, University of Chicago, Chicago, IL 60637, USA
Received 1 July 1992; Revised 1 September 1992
This paper identifies five common risk factors in the returns on stocks and bonds. There are three stock-market factors: an overall market factor and factors related to firm size and book-to-market equity. There are two bond-market factors, related to maturity and default risks. Stock returns have shared variation due to the stock-market factors, and they are linked to bond returns through shared variation in the bond-market factors. Except for low-grade corporates, the bond-market factors capture the common variation in bond returns. Most important, the five factors seem to explain average returns on stocks and bonds.
Evidence that indexing works even better in International and International Small Cap markets.
The Arithmetic of Active Management, William Sharpe
STOCKS, HORSES, CHAOS AND EFFICIENT MARKETS
Dot Coms Shut Downs, Low cost of capital companies
U.S. House of Representatives Committee on Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises Hearing on "Analyzing the Analysts: Are Investors Getting Unbiased Research from Wall Street?" June 14, 2001
Oct 26, 2008 - "What we do know is that trying to time the market is a loser's game. And most of the time investors simply get it wrong, selling AFTER market drops and only buying well after it recovers. That results in the dollar weighted returns they earn being well below the market's time weighted returns." - My Take on This Market, by Larry Swedroe - 10/26/08
Oct 17, 2008 - From Warren Buffett: "Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. .. "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." - Buy American, I Am. NYT.com
Aug 2, 2008: Mutual Fund Performance, Nitzsche, Dirk, Cuthbertson, Keith and O'Sullivan, Niall, (2006): A Devastating Conclusion: Essentially No Skill, just Luck: "Sensible advice for most investors would be to hold low cost index funds..." Another study: Mutual Fund Performance and Manager Style
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