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  • Tom Allen and Mark Hebner

    Are Index Funds Evil or Just a Scapegoat for a Much Bigger Concern?

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    by Tom Allen and Mark Hebner — Tuesday, October 31, 2017

    In the September 2017 issue of The Atlantic magazine, an article entitled “Are Index Funds Evil?” caught the attention of us, and what we would suspect, the attention of many passive investors. The crux of the argument made has to deal with shareholder ...Read More

  • Tom Allen and Mark Hebner

    DALBAR 2016 QAIB: Investors are Still Their Own Worst Enemy

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    by Tom Allen and Mark Hebner — Thursday, May 11, 2017

    DALBAR 2016 QAIB: Investors are Still Their Own Worst Enemy   Tom Allen & Mark Hebner   For 23 years, DALBAR has been publishing their annual Quantitative Analysis of Investor Behavior study that examines investor performance in mutual funds. Their goal is to shed ...Read More

  • Tom Allen and Mark Hebner

    SPIVA: Active vs. Passive: 2016 Standard & Poor's Update [VIDEO]

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    by Tom Allen and Mark Hebner — Friday, April 21, 2017

    “Given that active managers’ performance can vary based on market cycles, the newly available 15-year data tells a more stable narrative. Over the 15-year period ending Dec. 2016, 92.15% of large-cap, 95.4% of mid-cap, and 93.21% of small-cap managers trailed their ...Read More

  • Are There Potential Downfalls to Passive Investing?

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    by Tom Allen and Mark Hebner — Monday, April 17, 2017

    A recent article from the LA Times highlighted the recent trend of small investors putting more of their retirement savings into passive index funds. Citing multiple statistics from the Investment Company Institute, the rise of passive investing is starting to sweep the nation. ...Read More

  • Vanguard vs. Dimensional: Through A Statistical Lens

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    by Tom Allen and Mark Hebner — Monday, April 3, 2017

    As advocates for passive investing, it is a common question amongst clients and prospects about why our 100 IFA Index Portfolios utilize strategies from Dimensional Fund Advisors versus better-known passive fund companies such as Vanguard or iShares. The answer is quite simple: ...Read More

  • Buffett's $1 Million Bet and Why You Should be an Indexer

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    by Tom Allen and Mark Hebner — Monday, March 6, 2017

    Back in 2007, Warren Buffett made a $1 Million bet with Ted Seides from Protégé Partners that a simple index fund will outperform hedge funds over the subsequent 10-year period. We have covered the story of this wager over time here and here. Armed with the ...Read More

  • A Belief in the Law of Small Numbers & The Gambler's Fallacy

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    by Tom Allen and Mark Hebner — Wednesday, March 1, 2017

    We often remind our readers that when dealing with random variables, like returns in the market, it is crucial that you are able to speak the language of statistics, which we call Riskese. In the world of random variables, there is no “black” or ...Read More

  • The Hidden Weaknesses of Index Funds – From the Wall Street Journal

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    by Tom Allen and Mark Hebner — Tuesday, December 20, 2016

    The Wall Street Journal recently published a series of articles under the title “The Passivists.” Highlighting the merits of a passive investment approach, authors tackle topics such as the fruitless endeavor of trying to pick winning stocks to the “Do Nothing ...Read More

  • 10 Reasons Investors Should Switch to Passive From Active

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    by Tom Allen and Mark Hebner — Wednesday, November 30, 2016

    While we believe there are many reasons why investors should look into adopting a passive investment strategy that incorporates buying, holding, and rebalancing a globally diversified portfolio of index funds, here are ten.  1. Markets Are Random: Markets are moved by news ...Read More

  • Active vs. Passive? Choose Both – From the Wall Street Journal

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    by Tom Allen and Mark Hebner — Wednesday, November 16, 2016

    The Wall Street Journal recently published a series of articles under the title “The Passivists.” Highlighting the merits of a passive investment approach, authors tackle topics such as the fruitless endeavor of trying to pick winning stocks to the “Do Nothing ...Read More

  • The Dying Business of Picking Stocks – From the Wall Street Journal

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    by Tom Allen and Mark Hebner — Wednesday, November 9, 2016

    The Wall Street Journal recently published a series of articles under the title “The Passivists.” Highlighting the merits of a passive investment approach, authors tackle topics such as the fruitless endeavor of trying to pick winning stocks to the “Do Nothing ...Read More

  • Index Funds: The Documentary Film

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    by Mark Hebner — Monday, August 8, 2016

    I am very proud to share this film with you and ask that you help spread the word. I’d also like to thank you for your support, your interest and your encouragement as my dedicated team and I continue to press on in our mission to change the way the world invests—by ...Read More

  • Maryland Public Pension: A Case Study on How to Waste Money

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    by Tom Allen and Mark Hebner — Wednesday, June 22, 2016

    Public pensions have a very simple purpose: to help serve the many public employees and their retirement. What they have turned into is a shining example of wasting taxpayer money. The Washing Post recently published an article highlighting the $320 million in fees that the ...Read More

  • False Diversification

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    by Tom Allen and Mark Hebner — Wednesday, June 15, 2016

    As proponents of globally diversified portfolios, we understand the principle of diversification when it comes to investing. Harry Markowitz was one of the first academics to identify the benefits of adding additional assets to a portfolio. In theory, assets with different ...Read More

  • Tom Allen and Mark Hebner

    Pursuing a Better Investment Experience with Index Fund Advisors

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

    The wide world of investing is complex. For most of us, it’s a vague concept that is seemingly associated with uber-wealthy like Warren Buffett. We all understand the concept of having our money grow for future financial goals like retirement, but connecting the dots from ...Read More

  • Failure of Active Management is Not Just a U.S. Phenomenon

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    by Tom Allen and Mark Hebner — Thursday, March 24, 2016

    It is common to believe, unfortunately, that there are certain areas of the public equities market that may ripe for active managers to display their skill. The belief is that certain corners such as the small cap market in the United States or the Emerging Markets in general ...Read More

  • The $1 Million Dollar Bet: Buffett Winning Big

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    by Tom Allen and Mark Hebner — Wednesday, March 16, 2016

    Warren Buffett is considered a household name amongst the investment community. The famed investor and third richest man on planet earth is well-known for his investing acumen. Although he has had long-term success in beating the overall stock market, he is also well known for ...Read More

  • Good Advice

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    by Mark Hebner — Wednesday, February 17, 2016

    In today’s climate of one-page financial plans, bargain-basement fund pricing and automated investment tools, you may wonder whether you still need a living, breathing financial adviser. You do. But with a twist. First, we need to redefine traditional financial advice ...Read More

  • Replacing Speculation With An Education: Investors Embrace Index Funds

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    by Tom Allen and Mark Hebner — Wednesday, February 3, 2016

    The war has been long. Much longer than the World Wars of the 20th century, the Vietnam War, the Civil War, and even the war on terrorism. This war started in the early 1960s, when statisticians began digging into stock price data to find trends. To their bewilderment, there ...Read More

  • Tom Allen and Mark Hebner

    The MFS "Active Advantage"... Really?

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    by Tom Allen and Mark Hebner — Wednesday, November 11, 2015

    MFS Investment Management made very well scripted and produced commercials highlighting some of the typical selling points active managers like to make when speaking to investors. Let's take a deeper ...Read More

  • Index Fund Assets Still on the Rise

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    by Tom Allen and Mark Hebner — Wednesday, October 21, 2015

    The Investment Company Institute (ICI) published its annual Fact Book back in May, which addressed the recent trends in the mutual fund and exchange traded fund investment strategies. One of the most common trends that the ICI saw in 2014 was the large inflow into index funds ...Read More

  • Advice That Adds Up During Down Markets

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    by Mark Hebner — Friday, October 16, 2015

    As recent global markets continue to test the patience of even some of the most stoic among us, how are you holding up? Are you finding it feasible (if not necessarily fun) to stick with your existing strategy, or have you been eying it with increasing suspicion of late? If ...Read More

  • Unhealthy Attachments

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    by Jim Parker — Wednesday, October 7, 2015

    Have you ever made yourself suffer through a bad movie because, having paid for the ticket, you felt you had to get your money’s worth? Some people treat investment the same way. Behavioral economists have a name for this tendency of people and organizations to stick with ...Read More

  • High Frequency Trading - Impact on Other Market Participants

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    by Tom Allen and Mark Hebner — Tuesday, September 29, 2015

    Without a doubt the global market structure has changed dramatically over the last decade. While many of our colleagues can remember the days of pit trading within the major stock exchanges, we now live in a world largely driven by computers. Using algorithms created by in-house ...Read More

  • Do Behavioral Biases Lead to Profitable Investment Strategies?

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    by Tom Allen and Mark Hebner — Tuesday, August 11, 2015

    We recently came across a research paper that examined the performance of “behavioral mutual funds.” We put this term is quotations since it is hard to nail down exactly what type of investment strategy these types of mutual funds are implementing other than the fact ...Read More

  • Investor Behavior and the Financial Planning Process

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    by Tom Allen and Mark Hebner — Thursday, July 30, 2015

    The role of the “financial advisor” has quickly evolved over the last 15 years.  While the tradition of bringing clarity to someone’s overall financial life and planning accordingly has remained steadfast, the role of the “counselor” has become ...Read More

  • IFA Client Study - Maximizing Your Return Relative to a Benchmark [VIDEO]

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    by Mark Hebner — Tuesday, July 28, 2015

    What has been the value of following or not following the advice of Index Fund Advisors (IFA), regardless of what happens in the financial markets? A similar question was addressed by Vanguard Research in their Advisor’s Alpha article, where they estimated ...Read More

  • Passive Investing: Seeing the Forest For the Trees

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    by Tom Allen and Mark Hebner — Monday, July 20, 2015

    Sometimes it is hard to focus on the big picture, often getting caught up in the minutia where we are expending our efforts for little benefit in return. Other times we lose sight of the purpose of our efforts in the first place. In other words, we forget to ask ...Read More

  • Come On Hartford, You Know Better!

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    by Tom Allen and Mark Hebner — Tuesday, June 23, 2015

    We recently came across the Second Quarter 2015 White Paper from Hartford Funds, which attempted to address the recent investor trend of shifting more and more money to passive investment strategies. But their message was a warning to investors stating, “much ink has been ...Read More

  • The Evidence on the Evidence: Assessing the Validity of Academia

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    by Mark Hebner — Thursday, June 11, 2015

    There's a reason we refer to our strategy for building durable, long-term wealth as evidence-based investing. There are a number of other terms we could use instead: Structured (getting warm), low-cost (definitely), passive (sometimes), indexing (close) … the list goes ...Read More

  • Fidelity Has Found the Holy Grail: Oh Wait, False Alarm!

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    by Tom Allen and Mark Hebner — Wednesday, June 10, 2015

    One of the toughest (but also the most rewarding) aspects of being in the financial services industry is garnering and protecting clients’ trust. The tough part of the equation comes mainly from being grouped amongst all financial professionals, who for the most part are ...Read More

  • Give Your Graduate One More Piece of Advice

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    by Mark Hebner — Thursday, June 4, 2015

    The soccer games and ballet lessons are behind you, but as a parent, you may always feel the need to give advice to your children. At the same time, once they walk across that stage with degree in hand, seeking your advice may not top their list of ways to ...Read More

  • Dear Recovering Financial Advisors

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    by Mark Hebner — Wednesday, May 13, 2015

    I recently received an email from a long-time stockbroker who now works as a traditional financial advisor on the east coast. He very candidly described his long-time commitment to the active money game as being extremely tiresome and currently in direct conflict with what he ...Read More

  • The Misbehavior of Investors

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    by Tom Allen and Mark Hebner — Wednesday, April 29, 2015

    “The investor’s chief problem—and even his worst enemy—is likely to be himself.” – Benjamin Graham There was initial hesitation in choosing to use Mr. Graham's age-old adage. To say that we have used this quote many times would be an ...Read More

  • Keys to the Investment Vault: The Case for Index Funds

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    by Larry Weber — Tuesday, March 31, 2015

    Investing is not as complicated as portrayed by Wall Street types or the press. Most people can learn the basic best practice strategies of investing and asset allocation in a matter of days through a good investment education program led by an investment advisor who serves as a ...Read More

  • Yet Another Sign that the Tipping Point Has Arrived

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    by Mark Hebner and IFA Contributors — Friday, March 20, 2015

    We have spoken several times (see here and here) about the tipping point in the long-term migration from active to passive management. While perusing InvestmentNews, we encountered this article about investors shunning stock pickers in favor of index funds which have been ...Read More

  • Addressing Some Misconceptions about Indexing

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    by Mark Hebner and IFA Contributors — Wednesday, March 11, 2015

    While Forbes magazine has often carried excellent articles about investing such as this one, we found a recent column from Pamela Rosenau to be disappointing. She begins by noting the mass migration from active management to passive and quotes Jack Bogle who said, “About ...Read More

  • Yet More Wisdom from the Oracle of Omaha

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    by Mark Hebner and IFA Contributors — Friday, March 6, 2015

    One of the things we look forward to at this time of year is the release of Warren Buffett’s annual letter to the shareholders of Berkshire Hathaway, and his 2014 letter (which marks the 50th anniversary of the leadership of Warren Buffett and Charlie Munger) did not ...Read More

  • Weather vs. Climate

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    by Jim Parker — Thursday, March 5, 2015

    Notice how TV news bulletins put finance next to the weather report? In each, talking heads point at charts and intone about intraday events that are quickly forgotten. Meanwhile, the long-term wealth building story gets overlooked. Many investors feel that they are not properly ...Read More

  • The Emotional Investor: An Interesting New Website

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    by Mark Hebner and IFA Contributors — 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 now ...Read More

  • Cramer Weighs in on Mutual Funds

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    by Mark Hebner and IFA Contributors — 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 helped to educate his viewers who would otherwise know next ...Read More

  • About Those Bulls and Bears

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    by Mark Hebner and IFA Contributors — 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 was identified by Christopher Dennistoun as Richard Alfred Davenport. ...Read More

  • Some Sage Advice from the Guardian

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    by Mark Hebner and IFA Contributors — 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 investors. Brecht begins with the decision of Washington DC entrepreneur ...Read More

  • Book Analysis: The Story of a Speculator

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    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 famous commodity trader Arthur W. Cutten (1870-1936) recollects his ...Read More

  • A Look Back at Some Good Articles from 2014

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    by Mark Hebner and IFA Contributors — 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 enjoy. Will Invest for Food (The Economist, 5/3/2014) This insightful ...Read More

  • A Golden Age for Active Investing? We Think Not!

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    by Mark Hebner and IFA Contributors — 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 migration from active to passive, noting that passive funds now account ...Read More

  • A Great New Video: How to Win the Loser's Game [VIDEO]

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    by Mark Hebner — Friday, November 7, 2014

    Here is a full-length landmark documentary by SensibleInvesting.tv, How to Win the Loser’s Game.  It is well worth your time to watch every minute of it.  It is about 80 minutes long and contains interviews with some of the biggest names and brightest ...Read More

  • The Darkest of Days for Active Management

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    by Mark Hebner and IFA Contributors — Thursday, November 6, 2014

    “Active management has never been in worse repute—this is the darkest of days.”                         --John Rekenthaler, Vice President of ...Read More