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  • Mark Hebner

    Selecting Investments Part 1

    by Mark Hebner — Thursday, January 2, 2014

    As a fiduciary for its clients, IFA only receives compensation from its clients and is therefore unbiased in its choice of ...Read More

  • The 12-Step Recovery Program for Retirement Gamblers

    by Mark Hebner — Thursday, April 25, 2013

    For the last fourteen years, IFA has been educating investors on the sensible way to invest, based on decades of academic research. Amid all the clamor and din of Wall Street advertising and the talking heads of the financial media, we sometimes feel like the proverbial lone ...Read More

  • John Spence

    A Look At the New Bond ETF Families

    by John Spence — Friday, November 15, 2002

    After years of development and regulatory hurdles, fixed-income ETFs have finally hit the market. San Francisco-based Barclays Global Investors beat ETF Advisors to the punch with a family of iShares tied to Lehman Brothers bond indexes. New York-based ...Read More

  • Mark Hebner

    Dimensional Fund Advisors: A Deeper Look At The Performance

    by Mark Hebner — Monday, January 2, 2017

    As many of our readers know, we don’t think too highly of the active mutual fund industry. Not because we have a personal vendetta against them, but because their pursuit of attempting to outperform the market using other investors’ money has only enriched themselves ...Read More

  • The Problem of High 401(k) Costs

    by Mark Hebner — Monday, April 14, 2014

    In December of 2012, Demos, a liberal think tank, published The Retirement Savings Drain—The Hidden and Excessive Costs of 401(k)s. It caused quite a stir and provided much of the source material for the PBS Frontline Documentary, The Retirement Gamble. Recently, another ...Read More

  • Brad Steiman

    What's the Significance?

    by Brad Steiman — Friday, May 6, 2011

    Caution: Technical Discussion to Follow—READ AT YOUR OWN RISK. As the old saying goes, there are three kinds of lies: lies, damned lies, and statistics. It is true data can be tortured with statistical tools that will make it confess to almost anything. On the other hand, ...Read More

  • Will "Go-Anywhere Funds" Get You to Your Destination?

    by Mark Hebner — Monday, April 14, 2014

    When discussing the issue of style drift with prospective clients, we commonly hear an objection that goes something like, “Why should I care where my fund manager chooses to invest, as long as he is picking the asset class and securities with the highest returns?” ...Read More

  • Total Domestic ETF Assets Over $100 Billion

    by Staff — Tuesday, November 19, 2002

    There are currently 281 exchange-traded funds listed around the world, with over $140 billion in assets under management, according to a new report by Boston-based indexing giant State Street Global Advisors. ...Read More

  • Where are the Customers' Yachts? or A Good Hard Look at Wall Street

    by IFA Contributors — Friday, July 27, 2012

    Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor. He said, “Look, those are the ...Read More

  • Mark Hebner

    Calculations for t-Statistics

    by Mark Hebner — Monday, December 2, 2013

    In calculating the t-stat, the first step is to determine the excess returns the manager earned above an appropriate ...Read More

  • Small-Cap Face-Off: Russell 2000 vs. S&P 600

    by Mark Hebner and IFA Contributors — Thursday, May 1, 2014

    Investors who decide to index the small-cap portion of their portfolios face a bewildering array of choices from index mutual funds and exchange-traded funds (ETFs) that track indexes from providers such as Russell, S&P Dow Jones, MSCI, and Morningstar. At Index Fund ...Read More

  • An Explanation of IFA's New Tagline

    by Mark Hebner — Tuesday, January 22, 2013

    As you may have noticed, we at Index Funds Advisors have changed our tagline from "matching people with portfolios" to "fiduciaries for wealth." While the former is a fair description of what we do at the beginning of a client relationship, the latter goes to the essence of who ...Read More

  • Tom Allen and Mark Hebner

    USAA Mutual Funds: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Friday, January 22, 2016

    The United Services Automobile Association (USAA) started during the roaring 20’s. Their story began with US Army officers who were refused insurance due to the risky nature of their careers (only 4 years removed from World War I). These men saw a ...Read More

  • Forty-Two Years of a Random Walk Down Wall Street

    by Mark Hebner — Thursday, September 3, 2015

    “If one of your New Year’s resolutions is to improve your personal finances, here’s a suggestion: Instead of picking up one of the scores of new works flooding into bookstores, reread an old one: A Random Walk Down Wall Street.” – New York Times If ...Read More

  • Tom Allen and Mark Hebner

    Vanguard's Active Funds: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Tuesday, June 7, 2016

    Vanguard is the largest fund management company in the world. Mostly known for being a pioneer in the development of index funds, they also carry quite a few actively managed funds in their lineup.                      ...Read More

  • Q&A with IFA: Are Monthly Stock Market Returns Normally Distributed?

    by Mark Hebner and IFA Contributors — Monday, June 2, 2014

    Question: Are Monthly Stock Market Returns Normally Distributed? What is the best way to describe the distribution of stock market returns—a normal distribution, lognormal, or something else? What should investors do with this information? Note: The question above was ...Read More

  • Tom Allen and Mark Hebner

    Thrivent Financial: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Tuesday, December 15, 2015

    Thrivent Financial is a wonderful story about a non-profit that has done a tremendous job formulating a successful financial planning process. Focusing on the niche clientele of Christians, Thrivent provides a process that incorporates facets of overall wealth management like ...Read More

  • The Matrix Book: A DFA Tradition [VIDEO]

    by Mark Hebner and IFA Contributors — Friday, May 6, 2016

    "Data! Data! Data!" he cried impatiently, "I cannot make bricks without clay!" — The Adventures of Sherlock Holmes, The Adventure of the Copper Beeches - Sir Arthur Conan Doyle, ...Read More

  • Tom Allen and Mark Hebner

    Oppenheimer Funds: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Tuesday, April 12, 2016

    Oppenheimer Funds is a subsidiary of Oppenheimer Holdings & Co., one of the largest financial institutions in the entire world. Having roots dated over a century ago, the Oppenheimer name has acted as a beacon of financial expertise. Their services include investment baking, ...Read More

  • Standard Deviation

    by Mark Hebner — Wednesday, January 1, 2014

    In the field of finance, standard deviation represents the risk associated with a security (stocks or bonds), or the risk of a portfolio of securities (including actively managed mutual funds, index mutual funds, or ...Read More

  • IFA FinPlan: A New, Free Technology for IFA Clients [VIDEO]

    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, today we proudly announce the expansion of our services, and a ...Read More

  • The New and Improved IFA Index Portfolios [VIDEO]

    by Mark Hebner — Monday, August 26, 2013

    IFA established the original IFA Index Portfolios back in 2000, based on the DFA Matrix book and several peer-reviewed academic papers describing what I deem to be "Modern Portfolio Theory." We recently collected several such papers and summarized them with one paragraph and ...Read More

  • Tom Allen and Mark Hebner

    T. Rowe Price: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Thursday, May 19, 2016

    T. Rowe Price has clearly stated their value proposition to their investors. But what exactly is that value and, more importantly, who is receiving the bulk of that value?                               ...Read More

  • Tactical Asset Allocation: The Market-Timing Wolf in Sheep's Clothing

    by IFA Contributors — Wednesday, January 1, 2014

    Borrowing the definition from a recent Vanguard study, "Tactical asset allocation (TAA) is a dynamic strategy that actively adjusts a portfolio's strategic asset allocation (SAA) based on short-term market forecasts. Its objective is to systematically exploit inefficiencies or ...Read More

  • Rex Sinquefield

    Active vs Passive Management

    by Rex Sinquefield — Sunday, October 1, 1995

    Active management is the art of stock picking and market timing. Passive management refers to a buy-and-hold approach to money management. It can be applied to any asset class: big stocks, small stocks, value or growth, foreign or domestic can all be accessed by passive ...Read More

  • Q&A with IFA: Do Index Funds Contribute to Mispricing?

    by Mark Hebner — Friday, August 29, 2014

    Question: Index funds buy stocks "blind" without regard to company fundamentals. Do their activities contribute to mispricing of securities? Note: The question above was originally addressed in DFA’s Fama/French Forum. Professor Fama gave his typical terse but to the ...Read More

  • Mark Hebner and IFA Contributors

    The Value of a Passive Advisor [VIDEO]

    by Mark Hebner and IFA Contributors — Tuesday, September 17, 2013

    By now, you realize the benefits of an indexing strategy, and more importantly, the expensive false promises of active management.  So the next logical question is, “Why should I seek the help of an advisor when I can just create a portfolio of indexes on my own using ...Read More

  • Mark T. Hebner

    The Hebner Model: Why Prices Change

    by Mark Hebner — Saturday, February 21, 2009

    The Hebner model attempts to simplify free market forces into 3 simple variables: Price, Expected Return and Uncertainty. In short, prices move in the opposite direction of uncertainty so that expected returns can remain ...Read More

  • If You Can't Beat 'Em, Join 'Em

    by Mary Brunson and Mark Hebner — Monday, November 4, 2013

    "The current understanding of asset prices relies in part on rational investors and their concerns about risk and in part on psychology and behavioral finance." 2013 Nobel Prize Committee Announcement, October 14, 2013   “This year’s Prize in Economic Sciences ...Read More

  • Mark Hebner and IFA Contributors

    Lord Abbett Funds: A Deeper Look at the Performance

    by Mark Hebner and IFA Contributors — Friday, June 20, 2014

    On a few occasions, we have been asked by prospective clients about Lord Abbett funds. Like American Funds, they have been around since the Great Depression and are fully dedicated to active management. As of 12/31/2013, they had $137 billion1 of assets under management spread ...Read More

  • Profitability and a Four-Factor Model

    by Mark Hebner and IFA Contributors — Friday, August 2, 2013

    When constructing or evaluating a domestic equity portfolio, Index Fund Advisors has traditionally utilized the three-factor asset pricing model that Professors Eugene Fama and Ken French introduced1 in 1993. This model states that the expected return of a broadly diversified ...Read More

  • Tom Allen and Mark Hebner

    Part 1: Fidelity Funds - A Deeper Look at the Performance [VIDEO]

    by Tom Allen and Mark Hebner — Wednesday, August 19, 2015

    It is not uncommon for us to receive questions from clients and prospects about a particular family of mutual funds. The financial media is always quick to highlight top performing managers (here is an example from Money Magazine) to entice investors into hopping on board with a ...Read More

  • When Is the Right Time to Take Social Security Benefits?

    by Mark Hebner and IFA Contributors — Wednesday, May 15, 2013

    Americans who are near or in retirement are faced with the vexing question of when to take Social Security benefits. For a married couple, the complexity is multiplied by consideration of spousal benefits and the potential implementation of a "file-and-suspend" ...Read More

  • Asset Location

    by Mark Hebner — Friday, January 10, 2014

    An additional way that a passive advisor can add value is not just asset allocation but asset location. Specifically, for a client that has a mixture of taxable accounts, traditional IRAs, and Roth IRAs, it is often helpful to construct a single portfolio consisting of multiple ...Read More

  • Morningstar's Manager of the Year: Luck or Skill?

    by IFA Contributors — Thursday, February 2, 2012

    Unfortunately for them, investors are constantly bombarded with advertisements, market commentaries, and screaming magazine covers telling them what they should do with their money. Contributing to all the clamor and din is Morningstar’s annual announcement of their awards ...Read More

  • Advisor Alpha: Vanguard Estimates 3% Excess Return from Passive Advisors

    by Mark Hebner and IFA Contributors — Wednesday, March 12, 2014

    A little more than a month ago, we published this article that introduced the concept of advisor’s alpha as the value added by passive advisors who adhere to the principles of controlling costs, maintaining discipline, and tax awareness. We also noted that Vanguard’s ...Read More

  • Mark Hebner and IFA Contributors

    Is a Donor Advised Fund Right for You?

    by Mark Hebner and IFA Contributors — 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 account in the fund which can be held at a major brokerage firm such as ...Read More

  • The Art of Letting Go

    by Jim Parker — Wednesday, May 29, 2013

    In many areas of life, intense activity and constant monitoring of results represent the path to success. In investment, that approach gets turned on its head. The Chinese philosophy of Taoism has a word for it: “wuwei.” It literally means “non-doing.” In ...Read More

  • Fiduciary Duty

    Who is Your Fiduciary?

    by Mark Hebner — Sunday, December 15, 2013

    From Wikipedia, the free encyclopedia A fiduciary (from Latin fiduciarius, meaning "[holding] in trust"; from fides, meaning "faith", and fiducia, meaning "trust") is a legal or ethical relationship of trust between two or more parties. Typically, a fiduciary prudently takes ...Read More

  • The Gambler's Fallacy and the Misuse of the Law of Large Numbers

    by Mark Hebner and IFA Contributors — Friday, February 21, 2014

    If you have ever spent any time in a casino, it is likely that you have seen supposedly random events that appeared to be non-random. Perhaps the roulette wheel came up red seven times in a row, for example. If your reaction was to place a large bet on ...Read More

  • The Funded Ratio: An Actuarial Approach to Retirement Spending

    by Mark Hebner and IFA Contributors — Monday, November 17, 2014

    In a recent Financial Professional Outlook, Russell Investments surveyed 234 financial advisors across 145 investment firms nationwide. According to their results, 60% of advisors said that more than half of their clients are near or in ...Read More

  • The Glide Path

    by Mark Hebner — Monday, September 8, 2014

    IFA recommends a Glide Path strategy for all clients. This strategy reduces one index portfolio per year (1% less in asset allocation to stock indexes), based on the 100 Index Portfolio ...Read More

  • Sell in May? Forget about It!

    by Mark Hebner and IFA Contributors — Wednesday, May 1, 2013

    It never fails that at the beginning of May we receive a query about the “Sell in May and go away” market-timing strategy. We have always dismissed it out of hand for three primary reasons: 1)   In an efficient market, there is no reason for some months to ...Read More

  • DFA vs Vanguard (from 2004)

    by Christian Chensvold — Thursday, January 1, 2004

    Research shows that for a long-term investment strategy, Dimensional Fund Advisors (DFA) consistently delivers superior results to Vanguard. In a survey of between 1,100 and 2,000 investment advisors held three times between 1997-2002, Dalbar Research ...Read More

  • The Evolution of Dimensional

    by David Booth — Monday, May 13, 2013

    We believe that the best way to add value over benchmark returns is by structuring portfolios around the dimensions of expected returns. Portfolio structure, rather than the tactical shifts associated with conventional management, drives the performance of portfolios. Clients ...Read More

  • Barron's Article on Dimensional Fund Advisors

    by Mark Hebner and IFA Contributors — Monday, January 6, 2014

    Beverly Goodman of Barron’s was accorded the high honor of being the first reporter to attend one of DFA’s Financial Advisor Colleges. The article that she wrote about her experience, A Different Dimension, shows that it was time well spent. Having the opportunity to ...Read More

  • John Spence

    How the S&P 500 Rebalance Affects Index Funds

    by John Spence — Thursday, August 1, 2002

    Standard & Poor's index committee decided in July to replace seven foreign stocks in the S&P 500 with domestic ones, and the shift affects countless index investors. For example, the Vanguard 500 fund was the nation's largest mutual fund at the end of ...Read More

  • Comments on Barron's Dimensional Fund Advisors Profile [VIDEO]

    by Mary Brunson and Mark Hebner — Friday, January 17, 2014

    "Active management is a zero-sum game, and that's before costs. That's not opinion, that's math." --Eugene Fama, 2013 Nobel Prize in Economics, Professor of Finance, Chicago Booth, as quoted in Barron's, "A New Dimension", January 4, 2014   Market Dimensions Eugene ...Read More

  • Mark Hebner and IFA Contributors

    State Pension Plans: A Deeper Look at the Performance

    by Mark Hebner and IFA Contributors — Wednesday, August 6, 2014

    Index Fund Advisors expended a large amount of time and effort in putting together the data that reveals the failure of active management for state pension systems. As of now, there is no central repository of information on state pension performance, so each state’s ...Read More

  • Registered Investment Advisors

    by Mark Hebner — Saturday, September 14, 2013

    An understanding of this 12-Step Program for Active Investors may lead investors to believe they can do it on their ...Read More