Articles (138)

990,552 views
Archive

  • The Gurudex: How Accurate are the "Experts?"

    1,449
    by Tom Allen and Mark Hebner — Friday, November 18, 2016

    It may come as no surprise to anyone who follows us, but just in case you forgot, we don’t think too highly of active management. It is nothing personal, of course. The fact of the matter is that the ...Read More

  • Oil Prices and Equity Returns

    3,750
    by Tom Allen and Mark Hebner — Friday, February 19, 2016

    No doubt one of the biggest stories over the last 18 months has been oil. Currently, oil prices (as measured by the WTI Crude Index) are at levels we haven’t seen for almost 13 years. While many see ...Read More

  • Low Future Economic Growth and Expected Returns

    3,868
    by Tom Allen and Mark Hebner — Tuesday, February 16, 2016

    We have recently come across a series of articles that are giving warning about the near future of slowed economic growth, high levels of volatility, and potentially lower returns from stocks and bonds. ...Read More

  • A Vanishing Value Premium?

    5,332
    by Weston Wellington — Friday, January 22, 2016

    Value stocks underperformed growth stocks by a material margin in the US last year. However, the magnitude and duration of the recent negative value premium are not unprecedented. This column reviews a ...Read More

  • Thrivent Financial: A Deeper Look at Their Performance

    10,693
    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 ...Read More

  • Second-Hand News

    4,353
    by Jim Parker — Friday, December 4, 2015

    Why don’t the media run more good news? One view is bad news sells. If people preferred good news, the media would supply it. But markets don’t see news as necessarily good or bad, rather in terms ...Read More

  • The MFS "Active Advantage"... Really?

    6,411
    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

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

    29,853
    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 ...Read More

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

    10,776
    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 ...Read More

  • How Negative is the Negative-Sum Game of Investing?

    4,378
    by Tom Allen and Mark Hebner — Tuesday, August 4, 2015

    In theory, investing is a zero-sum game and in practice it is a negative-sum game. Everyday, millions of individuals transact with one another based on their estimates or perception of where value currently ...Read More

  • JP Morgan: A Case Study in What is Not a Fiduciary!

    7,376
    by Tom Allen and Mark Hebner — Wednesday, July 1, 2015

    The investment advisory industry has grown tremendously in the last 10 years. We are no longer in the simple world of retiring with a pension and not having to worry about making it across the proverbial ...Read More

  • Dan Wheeler

    Hedge Funds

    4,129
    by Dan Wheeler — Monday, May 11, 2015

    One of the supposed benefits of investing in a Hedge Fund, is the opportunity to make money in both up and down markets.  This goal is appealing to two types of investors.  First, those who do not ...Read More

  • James Bond. 'Gambler Extraordinaire?'

    4,369
    by Christopher Dennistoun — Thursday, May 7, 2015

    "The scent and sweat of a casino are nauseating at three o'clock in the morning...." So begins one of the most celebrated sentences in English popular literature, the opening lines in Casino Royale. Gambling ...Read More

  • Committing Financial Suicide

    6,339
    by Tom Allen — Friday, April 24, 2015

    The way I like to think of day trading is that it’s probably the most effective weapon ever to commit financial suicide,…It’s an absolutely lethal way for the typical person to invest ...Read More

  • Cast in Iron

    5,064
    by Jim Parker — Monday, April 20, 2015

    The media occasionally locks in on a particular “hot” sector. In the late 1990s, it was technology. In the mid-2000s, it was mining. Writing headlines about fashionable sectors is one thing. ...Read More

  • One More Nail in the Coffin of Active Management

    5,909
    by Mark Hebner and IFA Contributors — Tuesday, March 17, 2015

    “The only consistent data point we have observed over a five-year horizon is that a majority of active equity and bond managers in most categories lag comparable benchmark ...Read More

  • Is Skill Dead? Perhaps It Was Never Alive

    4,976
    by Mark Hebner and IFA Contributors — Wednesday, March 4, 2015

    A recently released white paper from GMO titled “Is Skill Dead?” begins with this excellent quote from Jeremy Grantham: “90% of what passes for brilliance or incompetence in investing is the ...Read More

  • Are Stock Pickers Getting Desperate?

    4,799
    by Mark Hebner and IFA Contributors — 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

  • No Virginia, There Is No Stock Picking Santa Claus

    4,495
    by Mark Hebner and IFA Contributors — 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

  • Even More Bad News for Active Managers

    4,792
    by Mark Hebner and IFA Contributors — Wednesday, December 10, 2014

    On the heels of this story that we just published regarding the difficult times faced by active managers of large cap funds comes this piece from Reuters which states, “Stock-picking fund managers are ...Read More

  • An Enormous Waste of Money

    7,613
    by Mark Hebner and IFA Contributors — Friday, November 28, 2014

    Just how much do investors spend every year on active management fees in pursuit of the ever-elusive alpha? How does $600 billion (or roughly the GDP of Switzerland) grab you? This unfathomably large number ...Read More

  • Ebola Stocks: Avoid them like the Plague!

    4,361
    by Mark Hebner and IFA Contributors — Wednesday, November 26, 2014

    So says the U.S. Securities and Exchange Commission (SEC) which recently suspended trading for ten business days in the stocks of four companies that claim to be developing products or services in response to ...Read More

  • When a White Paper Should Be Ignored

    4,684
    by Mark Hebner and IFA Contributors — Wednesday, October 22, 2014

    In the investment industry, a claim that is backed up by a white paper takes on an aura of invincibility or unassailability. We at Index Fund Advisors find this to be an unfortunate state of affairs, for as we ...Read More

  • A Second Look at the Indian Mutual Fund Landscape

    4,994
    by Mark Hebner and IFA Contributors — Wednesday, October 8, 2014

    About eight months ago, one of our contacts in India (Jatin Visaria) sent us an analysis of fifty of the largest mutual funds domiciled in India that had at least fourteen years of returns data. We published ...Read More

  • The Curse of the Five-Star Rating

    7,655
    by Mark Hebner and IFA Contributors — Tuesday, September 16, 2014

    A recent Wall Street Journal article (“Mutual Funds’ Five-Star Curse”, 9/8/2014) should give pause to investors who only pick managers with the coveted five-star rating from Morningstar. As ...Read More

  • Lord Abbett Funds: A Deeper Look at Their Performance

    13,268
    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 ...Read More

  • Tough Times for the Bond King

    5,975
    by Mark Hebner and IFA Contributors — Thursday, June 19, 2014

    While patience is a virtue, it appears to be one that is not possessed by many investors in actively managed funds. It is this difficult lesson that PIMCO’s Bill Gross aka “The Bond King” has ...Read More

  • The Never-Ending Pursuit of Manager Alpha – Updated

    7,261
    by Mark Hebner and IFA Contributors — Wednesday, June 18, 2014

    As we have pointed out on many occasions, both stock picking and hiring an active manager to pick stocks on your behalf are mug’s games. While some investors diligently study individual stocks and other ...Read More

  • A Graphical View of the Mutual Fund Landscape

    6,743
    by Mark Hebner and IFA Contributors — Wednesday, June 11, 2014

    Since IFA began operations in 1999, we have published articles detailing how incredibly stacked the odds are against successfully picking a manager who will beat his benchmark (i.e., deliver alpha). See here ...Read More

  • A New Low for CNBC

    7,165
    by IFA Contributors — Friday, March 21, 2014

    With nothing better to do the other night, I decided to try out CNBC’s new series, Money Talks, a reality show that follows the antics of one Steve Stevens and his company VIP Sports of Las Vegas which ...Read More

  • Reality Show for Investors: "Survivor"

    5,715
    by Weston Wellington — Friday, December 20, 2013

    Anyone studying the long-run history of American business cannot help but observe how many of the prominent firms of one era fail to make it to the next. Free-market economies are characterized not only by ...Read More

  • PIMCO: Just How Consistent is Consistent?

    6,129
    by Mark Hebner and IFA Contributors — Wednesday, December 18, 2013

    In Bill Gross’s December 2013 Investment Outlook letter, he joined the ranks of Warren Buffett and Peter Lynch in giving a solid endorsement to indexing while reminiscing about his younger days when Jack ...Read More

  • The Active Voice is Alive and Well

    5,893
    by Mark Hebner and IFA Contributors — Tuesday, November 5, 2013

    Recently, we have seen many articles such as this one stating that the passive vs. active debate is over not because passive won but because the indexing advocates have drowned out the proponents of active ...Read More

  • No Logical Reason for Active Management

    4,191
    by Mark Hebner and IFA Contributors — Monday, October 28, 2013

    “The conclusion is inescapable: Active managers as a group, simply don’t add value…In short, there is truly no reason for a self-directed investor to own actively managed funds over index ...Read More