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Featured Article

The Emotional Investor: An Interesting New Website

39
by Jay D. Franklin and Mark Hebner
Tuesday, March 3, 2015

Recently, we came across theemotionalinvestor.org which is run by Jay Mooreland who, like Joshua Brown, can be described as a reformed broker. As a holder of the Certified Financial Planner (CFP) designation and a Master’s Degree in Applied Economics, Mr. Mooreland ...Read More

Archive

  • 1284

    Q&A with IFA: Momentum at the Asset Class Level

    106
    by Jay D. Franklin and Mark Hebner — Monday, March 2, 2015

    Question: I understand that there is evidence that momentum is one contributing factor to long term performance (in addition to the size and value factors). There is a current advisory service (Fundx) that ...Read More

  • 1281

    Why Does This Machine Simulate Market Returns?

    396
    by Jay D. Franklin and Mark Hebner — Wednesday, February 25, 2015

    Anyone who has visited IFA’s office in Irvine will likely have a fond memory of Francis, IFA’s probability machine, named after Francis Galton, an English mathematician who was an expert in many ...Read More

  • 1280

    More Bad News on the State of Retirement Readiness

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    by Jay D. Franklin and Mark Hebner — Tuesday, February 24, 2015

    A few months ago, we published this article addressing the woefully inadequate level of American financial literacy as it relates to retirement saving and investing. This newly released issue brief from EBRI ...Read More

  • 1279

    Book Analysis: The Stock Market Crash of 1929

    1,843
    by Thomas Brunson — Monday, February 23, 2015

    “The crash of 1929 stands out in financial history like a lighted beacon on a hilltop warning of impending trouble”-David V. Axon   In Gordon V. Axon’s book titled The Stock Market Crash ...Read More

  • 1278

    It's Tax Planning Time For Trusts

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    by Randy Gardner and Leslie Daff — Friday, February 20, 2015

    The 39.6% ordinary tax rate and 20% capital gain tax rate enacted by the American Taxpayer Relief Act of 2012 (ATRA) and the 3.8% Medicare investment surtax now apply when trust income exceeds $11,950.  ...Read More

  • 1277

    Should Hedge Funds Get Away With It? Not on Our Watch!

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    by Jay D. Franklin and Mark Hebner — Thursday, February 19, 2015

    The title above is a play on the title of this excellent article from the venerable New Yorker magazine which offers eight possible explanations for what Barry Ritholtz brilliantly calls The Most Fascinating ...Read More

  • 1276

    Cramer Weighs in on Mutual Funds

    543
    by Jay D. Franklin and Mark Hebner — Wednesday, February 18, 2015

    As you may have guessed or perhaps already have known from articles such as this one or this one, we at Index Fund Advisors, Inc. are not fans of CNBC’s Jim Cramer. While some may claim that he has ...Read More

  • 1275

    About Those Bulls and Bears

    351
    by Jay D. Franklin and Mark Hebner — Tuesday, February 17, 2015

    In the IFA Library of rare and antique finance-related books, we recently acquired a first edition from 1838 of Sketches of Imposture, Deception and Credulity. Although the author is officially anonymous, he ...Read More

  • 1273

    Q&A with IFA: Commodities

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    by Venkat Yarlagadda — Thursday, February 12, 2015

    Question: Should I have a separate exposure to Commodities in my portfolio? In short, we have concluded that the answer is no, and we will explain why below. Based on returns data for the last 10, 20, 30, 40, ...Read More

  • 1272

    Are Stock Pickers Getting Desperate?

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    by Jay D. Franklin and Mark Hebner — Wednesday, February 11, 2015

    We ask this question after reading this interesting article by David Randall from the Daily Mail. We believe the author was being polite in his word choice of “creative” rather than ...Read More

  • 1270

    The Analysts Underestimate Apple Again

    476
    by Jay D. Franklin and Mark Hebner — Monday, February 9, 2015

    On 1/27/2015, Apple released a spectacular earnings report for the first quarter of its 2015 fiscal year. Once again, it smashed through the analysts’ predictions, earning $3.06 per share vs. a consensus ...Read More

  • 1268

    IFA FinPlan: Using the Vault Feature [VIDEO]

    514
    by Mark Hebner — Thursday, February 5, 2015

    Clients who have signed up for IFA FinPlan have the ability to securely store an unlimited number of files. In this article, we will discuss some of the files that you may want to upload to your vault. Please ...Read More

  • 1267

    Some Sage Advice from the Guardian

    650
    by Jay D. Franklin and Mark Hebner — Monday, February 2, 2015

    The title of this Guardian article by Kira Brecht (“How Highly Paid Wall Street Guys Could Be a Threat to Your Retirement Money”) perfectly summarizes the situation of today’s individual ...Read More

  • 1266

    A Memo that Should Give Brokers Pause

    561
    by Jay D. Franklin and Mark Hebner — Friday, January 30, 2015

    Recently, a White House memo dated 1/13/2015 from the Chairman of the Council of Economic Advisers (Jason Furman) came to our attention. Co-authored with fellow Council member Betsey Stevenson, it calls out ...Read More

  • 1265

    Book Analysis: The Story of a Speculator

    1,081
    by Thomas Brunson — Thursday, January 29, 2015

    “Why, if a speculator won every time, soon he would own everything in the world” -Arthur W. Cutten, veteran wheat pit trader In his autobiographical narrative titled the Story of a Speculator, the ...Read More

  • 1264

    Understanding Administrative Trustee Services

    448
    by Jay D. Franklin and Mark Hebner — Wednesday, January 28, 2015

    If you have a trust, you are probably familiar with the idea of trustee (which could be yourself) who oversees the administration of the trust and has a fiduciary duty to act in the best interests of the ...Read More

  • 1263

    Is a Donor Advised Fund Right for You?

    449
    by Jay D. Franklin and Mark Hebner — Tuesday, January 27, 2015

    A donor advised fund (DAF) is a charitable giving vehicle administered by a public charity created to manage charitable contributions on behalf of organizations, families, or individuals. The giver opens an ...Read More

  • 1262

    Q&A with IFA: Equally-Weighted S&P 500 Index

    601
    by Jay D. Franklin and Mark Hebner — Monday, January 26, 2015

    Question: I have heard that an equally-weighted version (as opposed to the standard market cap-weighted version) of the S&P 500 Index achieves a higher return without additional risk. Should I not use this ...Read More

  • 1260

    A Look Back at Some Good Articles from 2014

    578
    by Jay D. Franklin and Mark Hebner — Friday, January 23, 2015

    At Index Fund Advisors, we consider 2014 to have been a tipping point year in the migration from active to passive management. Here are some of the articles that helped to convince us of this idea. Please ...Read More

  • 1259

    Another View of Smart Beta

    551
    by Jay D. Franklin and Mark Hebner — Thursday, January 22, 2015

    As we have stated in prior articles such as this one, smart beta is primarily a marketing term that refers to the attempt to capture risk and return factors beyond beta (overall exposure to the market). The ...Read More

  • 1258

    It's Now Official: Invest and Relax

    679
    by Jay D. Franklin and Mark Hebner — Wednesday, January 21, 2015

    As we say in Step 12 of IFA’s 12-Step Recovery Program for Active Investors, “Invest and Relax.” We just received confirmation of our advice from Assistant Professor Michaela Pagel of ...Read More

  • 1256

    The Paper that Formalized the Size Premium

    862
    by Jay D. Franklin and Mark Hebner — Friday, January 16, 2015

    At Index Fund Advisors, we implement portfolios for our clients that are tilted towards the compensated risk and return factors of small cap, value, and profitability. In this article, we will review the ...Read More

  • 1254

    2014: Patience Pays Off

    1,178
    by Weston Wellington — Wednesday, January 14, 2015

    Forecasters often cite a figure of 8%–10% as a likely outcome for stock market performance in the year ahead, and 2014 was no exception. As sensible as this may sound, it is worth pointing out that over ...Read More

  • 1253

    Let the Compounding Effect Work for You

    746
    by Venkat Yarlagadda — Wednesday, January 14, 2015

    “Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it.”  – Albert Einstein “Someone is sitting in the ...Read More

  • 1250

    When the Law Takes a Dim View of Cherry-Picking

    1,113
    by Jay D. Franklin and Mark Hebner — Tuesday, January 13, 2015

    As the Securities and Exchange Commission admonishes newly-registered investment advisers on its Website, “As an investment adviser, you are a ‘fiduciary’ to your advisory clients. This means ...Read More

  • 1248

    IFA Index Portfolio 100 vs. the S&P 500 Index [VIDEO]

    2,680
    by Jay D. Franklin and Mark Hebner — Thursday, January 8, 2015

    There is no arguing the fact that compared to U.S. large company stocks, 2014 was a difficult year globally diversified portfolios tilted towards small cap and value stocks. The table below shows the 2014 ...Read More

  • 1247

    What Should Investors Do Now? [VIDEO]

    1,028
    by Venkat Yarlagadda — Thursday, January 8, 2015

    Here is a classic video by Weston Wellington at DFA. During the 2008 market downturn some investors may have questioned the wisdom of their investment strategy. Weston address a number of questions and ...Read More

  • 1245

    Book Review: Commanding Heights

    1,048
    by Thomas Brunson — Tuesday, January 6, 2015

    There’s little more frustrating than being stuck in a traffic jam, especially when you’re trying to get somewhere important. The same can be said for the way developing and third-world countries ...Read More

  • 1244

    IFA FinPlan: A New Technology for IFA Clients [VIDEO]

    2,987
    by Mark Hebner — Monday, January 5, 2015

    At Index Fund Advisors, we place an extremely high value on being able to see the whole picture of our client’s finances. This goes far beyond just managing their investable assets. Towards that end, ...Read More

  • 1243

    The Fourth Quarter of 2014 in Review

    1,341
    by Jay D. Franklin and Mark Hebner — Friday, January 2, 2015

    In the fourth quarter of 2014, domestic equities had a strong showing, but foreign equities pulled back for both international developed and emerging markets. One major market-related story was the steep drop ...Read More

  • 1241

    Do You Have a Trust and Will?

    1,463
    by Mark Hebner — Thursday, January 1, 2015

    We have often written about the woeful state of retirement readiness in the United States. According to Forbes, “Half of Americans don’t have any of the most basic estate planning documents, ...Read More

  • 1240

    Is a Health Savings Account Right for You?

    2,442
    by Jay D. Franklin and Mark Hebner — Thursday, January 1, 2015

    A health savings account (HSA) is a tax-advantaged medical savings account for people who are enrolled in a high-deductible health plan (HDHP). For this purpose, an HDHP must have a minimum deductible of ...Read More

  • 1239

    A Foundational Paper in Finance

    983
    by Jay D. Franklin and Mark Hebner — Wednesday, December 31, 2014

    At Index Fund Advisors, we often talk about the risk factors that explain the returns of diversified portfolios. In this article, we will explore the technique pioneered1 by Nobel Laureate Eugene Fama and ...Read More

  • 1238

    Ponzi Schemes Continue to Proliferate

    1,036
    by Venkat Yarlagadda — Monday, December 29, 2014

    I recently discovered a fascinating Website tracks Ponzi Schemes all over the world. It is appropriately named ponzitracker.com, and here is what it says for the first half of 2014: “In the first six ...Read More

  • 1237

    Q&A with IFA: Bond Funds vs. Individual Bonds

    1,104
    by Jay D. Franklin and Mark Hebner — Friday, December 26, 2014

    Question: Should the bond portion of my portfolio be in bond funds or in a ladder of individual bonds? Answer: Like many things with respect to investing, a case can be made for either side. Any proposed bond ...Read More

  • 1236

    No Virginia, There Is No Stock Picking Santa Claus

    932
    by Jay D. Franklin and Mark Hebner — Wednesday, December 24, 2014

    There is no denying it; we Americans love an underdog, and what better underdog than a 17-year-old high school kid who beats Wall Street at its own game? Or so it seemed according to this fluff piece carried ...Read More

  • 1234

    When a Chinese Wall Is Not Something to Toy With

    755
    by Jay D. Franklin and Mark Hebner — Monday, December 22, 2014

    In the wake of the dot-com bust of the early 2000s, you may recall how we were promised that going forward there would be a “Chinese wall” or a “firewall” between the research and ...Read More

  • 1232

    Some Interesting New Data on 401(k) Plans

    859
    by Jay D. Franklin and Mark Hebner — Thursday, December 18, 2014

    BrightScope and the Investment Company Institute recently collaborated to produce this report on the current state of 401(k) plans based on BrightScope’s database of over 35,500 plans. As of 6/30/2014, ...Read More

  • 1230

    A Golden Age for Active Investing? We Think Not!

    1,343
    by Jay D. Franklin and Mark Hebner — Wednesday, December 17, 2014

    Alexander Friedman of GAM Holding AG recently opined on CNBC.com that (to paraphrase Mark Twain) the recent reports of the demise of active managers are greatly exaggerated. Friedman acknowledges the mass ...Read More

  • 1229

    A Respectful Disagreement with St. Jack

    1,009
    by Jay D. Franklin and Mark Hebner — Tuesday, December 16, 2014

    Anyone who has spent a significant amount of time on our Website will know that we have nothing but the highest respect for Jack Bogle, the Father of Indexing for Retail Investors. Recently, however, we saw ...Read More

  • 1227

    What Can We Read into the Increase in the VIX Index?

    859
    by Jay D. Franklin and Mark Hebner — Friday, December 12, 2014

    As noted in this CNBC article, The CBOE Volatility Index (VIX) which is widely interpreted to be an indicator of fear has risen by 40% (actually 57% based on the 12/10/2014 close) over the three trading days ...Read More

  • 1226

    Living with Volatility, Again

    1,468
    by Jim Parker — Thursday, December 11, 2014

    Volatility is back. Just as many people were starting to think markets only ever move in one direction, the pendulum has swung the other way. Anxiety is a completely natural response to these events. Acting on ...Read More

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