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Roger J. Trinwith, CFA

IFA's Approach to Minimizing Cash Drag

7,864
by Roger Trinwith
Thursday, May 2, 2013

One of the least advertised benefits of being an Index Funds Advisors, Inc (IFA) client is the continuous effort that our portfolio management team makes to give our clients the best investment experience possible. ...Read More

Article Library

  • Sell in May? Forget about It!

    14,779
    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

  • "You Have to Be in Gold"

    6,006
    by Weston Wellington — Wednesday, May 1, 2013

    We are living in a world of money printing. … That is why I have to recommend gold again. ... Once gold surpasses $1,800 an ounce, it will run to the low-to-mid $2,000s.” Quotation attributed to Felix Zuelauf, Zuelauf Asset Management. “Here’s ...Read More

  • The Rule of 72: A Mathematical Thing of Beauty

    6,449
    by IFA Contributors — Tuesday, April 30, 2013

    As an admitted math geek, I never tire of learning new tricks that simplify otherwise complex calculations. Far and away my favorite trick is known as “the rule of 72,” which states that if you are given an annualized average rate of return of X%, the estimated ...Read More

  • Gold: And Then There's The Downside!

    5,350
    by Tom Allen and Mark Hebner — Monday, April 29, 2013

    Gold has had quite the roller coaster ride over the last five years. The unprecedented monetary easing policy taken by the Federal Reserve has made some investors unnerved about the threat of hyperinflation and the possibility of falling back into another - possibly more severe ...Read More

  • F.A. Hayek: A Progenitor of Market Efficiency

    7,164
    by Mark Hebner and IFA Contributors — Friday, April 26, 2013

    “I am convinced that if it [the price system of a free market] were the result of deliberate human design, and if the people guided by the price changes understood that their decisions have significance far beyond their immediate aim, this mechanism would have been ...Read More

  • The 12-Step Recovery Program for Retirement Gamblers

    52,661
    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

  • Smart Sustainable Investing

    8,135
    by Mary Brunson and Mark Hebner — Friday, April 19, 2013

    There are a handful of funds that address sustainability, with just too many satisfying an emotional pull, packing the proverbial sizzle, but no steak. Many such funds incorporate a positive screening process, including only companies focused on specific hot-button issues. Such ...Read More

  • Taking Stock of the STOCK Act

    5,825
    by IFA Contributors — Wednesday, April 17, 2013

         In November of 2011, 60 Minutes did an eye-opening expose’ of members of Congress who profited from stock trading based on information.  The truly stunning aspect of this story was that all of it was perfectly legal since, as the authors of the ...Read More

  • Vanguard Makes the Case for Indexing

    6,295
    by IFA Contributors — Tuesday, April 16, 2013

         As someone who follows the world of passive investing quite closely, one publication that I eagerly await every year is The Case for Index-Fund Investing1 from Vanguard Research. As with the Standard and Poor’s Index versus Active (SPIVA) Scorecard2, ...Read More

  • Another Arithmetic Lesson from William Sharpe

    7,033
    by IFA Contributors — Friday, April 12, 2013

    Nobel Laureate William Sharpe is one of the academic linchpins of IFA’s investment philosophy. A year after winning the Nobel Prize in 1990, he penned a brief and elegant article1 showing that as whole, active investors must do worse than passive investors simply because ...Read More

  • 1Q/2013: The Quarter in Review

    13,042
    by IFA Contributors — Thursday, April 4, 2013

    The first quarter of 2013 was a quarter in which risk was rewarded. Once again, the market climbed a wall of worry centered on government shutdowns and budget sequestrations. On the international front, we continued to hear belligerent rhetoric from North Korea's Kim Jong-Un who ...Read More

  • Jim Parker, DFA  Vice President

    Running to Stand Still

    5,490
    by Jim Parker — Thursday, April 4, 2013

    Trying to correctly time your entry point to the market is never easy. Just ask the experts. In early February, strategists at a global investment bank were becoming alarmed at political events in Europe, the sequestration "crisis" in the US Congress, and what they saw as an ...Read More

  • What's a Mother to Do?

    7,978
    by IFA Contributors — Wednesday, April 3, 2013

    Yahoo!'s Daily Ticker is one of the few financial Websites that I make a point to visit on a daily basis. The three to six minute interviews and commentaries are always entertaining and sometimes very informative, like this one here. Today's visit greeted me with the following ...Read More

  • Active vs. Passive: 2012 Standard & Poor's Update

    6,611
    by Tom Allen — Monday, April 1, 2013

    Standard & Poor's recently published its year-end 2012 scorecards comparing the performance of active mutual funds versus their respective benchmarks, as well as the persistence of top performing active mutual funds. Not surprisingly, the results continue to favor the ...Read More

  • Momentum: A Fourth Factor

    11,504
    by IFA Contributors — Monday, April 1, 2013

    Throughout IFA’s Website, you will find references to the three-factor model formulated by Professors Eugene Fama and Ken French, which says that the expected return of a broadly diversified stock portfolio in excess of a risk-free rate is a function of that ...Read More

  • IFA Contributors

    Hedge Funds: A Deeper Look into their Returns

    6,125
    by IFA Contributors — Wednesday, March 27, 2013

    Despite the dismal results delivered to their investors since inception1, hedge funds have continued to grow, reaching a record $2.25 trillion by the end of 2012, according to Hedge Fund Research2.  At IFA, we have consistently warned investors to steer clear of them, and ...Read More

  • SAC Capital Sets a New Record – but Not One to Boast About

    5,682
    by IFA Contributors — Wednesday, March 20, 2013

    A story that we have been following for some time now is the SEC/FBI investigation of SAC Capital Advisors for insider trading. On March 15th, a shoe dropped when the SEC announced1,2 a record-setting $616 million settlement for affiliates of SAC Capital related to trades ...Read More

  • Jim Parker, DFA  Vice President

    Expensive Mistakes

    6,553
    by Jim Parker — Thursday, March 14, 2013

    This material may refer to resident trusts offered by DFA Australia Limited. These resident trusts are only available in Australia. Nothing in this material is an offer or solicitation to invest in these resident trusts or any other financial products or securities. All figures ...Read More

  • Dow 20,000? Not Quite Yet!

    5,208
    by IFA Contributors — Monday, March 11, 2013

    Our latest example of an unfulfilled prediction comes from James Altucher of Formula Capital who stated a year ago on Yahoo's Daily Ticker that the Dow would go to 20,000 within a ...Read More

  • What Is Your Fund's Active Share, and Should You Care?

    5,278
    by IFA Contributors — Monday, March 11, 2013

    To borrow from a Vanguard study1, "active share" is defined as the percentage of a portfolio that differs from a benchmark index. It provides a simple measure of the degree of active management in a portfolio at a given point in ...Read More

  • Brad Steiman

    Northern Exposure: Short-Sighted

    5,130
    by Brad Steiman — Friday, March 8, 2013

    Not long ago, fatigued investors were feeling the cumulative weight of two severe financial crises, periods of heightened stock market volatility, and an endless supply of bad economic news. Investors who extrapolated recent market experience were losing faith in equities and ...Read More

  • Papers Cited in IFA's Investment Policy Statement

    11,671
    by Mark Hebner and IFA Contributors — Thursday, February 28, 2013

    While any Wall Street firm can publish a "research report" that makes an unsubstantiated claim (e.g., Apple's share price will hit $1,000 by the end of the year), academic research is held to a completely different standard: the peer review process. This process ensures that no ...Read More

  • Betting against the House

    5,302
    by Weston Wellington — Thursday, February 14, 2013

    It's New Year's Day 2012. In addition to overdosing on televised college football, you're spending part of the holiday working on the family finances. Armed with a laptop and various online financial tools, you're on the hunt for appealing stock market ...Read More

  • Betting Against Buffett: So Far Not So Good

    5,691
    by IFA Contributors — Tuesday, February 5, 2013

    From the title of this article, you may have thought I was referring to someone who took a short position in Berkshire Hathaway. While I don’t personally know anybody who is crazy enough to have done this, at least one person thought it was a good idea. On January ...Read More

  • Time Diversification of Risk

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    by Mark Hebner — Sunday, January 27, 2013

    As the investment time horizon lengthens, the actual average annual compound return achieved by a stock portfolio converges to its expected ...Read More

  • What Some People Will Do to Beat the Market!

    5,173
    by IFA Contributors — Wednesday, January 23, 2013

    While hedge funds as a whole have failed to deliver their investors a higher return than T-Bills1, there are a few that have provided above-market returns. One of them is Steven Cohen’s SAC Capital, which is now the subject of an ongoing FBI/SEC investigation of insider ...Read More

  • An Explanation of IFA's New Tagline

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    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

  • Economic Forecasting and Market-Timing: Stay Clear of It!

    5,028
    by IFA Contributors — Friday, January 18, 2013

    Anybody who watches CNBC during market hours gets treated to a litany of economic predictions and their expected impact on market prices. Quite often, you will hear from two different pundits with opposite points of view about the direction of the economy, yet both sound ...Read More

  • IFA's Concerns with Laddered Bond Portfolios

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    by Mark Hebner — Thursday, January 10, 2013

    To borrow from Investopedia, a bond ladder is a portfolio of individual bonds with maturity dates evenly spaced across several years, so that the bonds are maturing and the proceeds are being reinvested or spent at regular ...Read More

  • 2012: The Year It Didn’t Happen

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    by Weston Wellington — Monday, January 7, 2013

    Judging by the headlines in the financial press, investors spent much of the past year anxiously awaiting one calamity after another that failed to occur. The plunge off the so-called fiscal cliff was averted. The euro zone did not fall apart. China's economy and stock market ...Read More

  • 2012: The Year in Review

    8,030
    by IFA Contributors — Wednesday, January 2, 2013

    Unlike 2011, 2012 was a year in which risk was rewarded. It is important to bear in mind that if risk were rewarded every year, it wouldn't be risk and investors would have no right to expect a positive real ...Read More

  • New Website to Help Stop Investment Scams

    5,231
    by IFA Contributors — Friday, December 21, 2012

    Today, I found a basis for hope upon reading this press release describing how the Better Business Bureau (BBB) and the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation have teamed up to produce a new Website to combat investment fraud, BBB Smart ...Read More

  • Arthur Wiesenberger: The Morningstar of His Day

    8,544
    by Mark Hebner and IFA Contributors — Tuesday, December 18, 2012

    A recent addition to IFA's ever-expanding collection of antique finance books is the 1954 edition of Investment Companies by Arthur Wiesenberger. For those who are not familiar with this weighty tome, consider it the Morningstar of that time ...Read More

  • The Nobel Foundation: Isn’t It Ironic…Don’t You Think?

    6,641
    by Mark Hebner — Monday, December 17, 2012

    The highly coveted Nobel Prize has been the pinnacle of academic achievement for advances in science and culture. Unfortunately, the Nobel Foundation believes in touting the exact opposite when it comes to the investment strategy for their endowment. In a recent interview with ...Read More

  • Ponzi Schemes After Madoff: A Sad Story Continues

    5,875
    by IFA Contributors — Tuesday, December 11, 2012

    It has been almost exactly four years since Bernie Madoff was revealed as the operator of the largest Ponzi scheme in history (estimated at $64.8 billion by prosecutors). One might think that with all the publicity and news coverage, people would have become more cautious and ...Read More

  • Forecasting Stock Market Returns: Why We Don't Do It

    7,144
    by Mark Hebner and IFA Contributors — Monday, December 10, 2012

    A recent whitepaper from Vanguard1 analyzed the impact of sixteen different variables on subsequent equity returns. They included everything from the ten-year smoothed price-to-earnings ratio to consensus GDP growth. ...Read More

  • Tax Rates and Stock Returns

    6,339
    by IFA Contributors — Friday, November 30, 2012

    With all the chatter in the financial media about the impending fiscal cliff, investors cannot be blamed for their confusion. Some investors have expressed a concern that an increase in tax rates may result in a substantial drop in stock market values or lower expected future ...Read More

  • What a License Plate Reveals

    7,269
    by IFA Contributors — Thursday, November 29, 2012

    While driving to work today, I was racking my brain for a good topic to write about when suddenly, a black Ferrari convertible zoomed past me. Normally, I would not give that a second thought, but I could not help but notice the license plate which displayed an abbreviated ...Read More

  • Deja Vu: Sandy and the Great Blizzard of 1888

    5,355
    by Mark Hebner — Tuesday, November 6, 2012

    While Sandy was well forecasted, folks back in 1888 had no benefit of foresight. As a result, Northeasterners were caught off-guard that early Sunday morning.  Snow pelted New Jersey, New York, Massachusetts, and Connecticut, leaving many trapped in their homes for a ...Read More

  • The Impact of Bad Investor Behavior

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    by IFA Contributors — Wednesday, October 24, 2012

    About a year ago, Professors Brad Barber and Terrance Odean published a survey of studies from around the world (including several of their own) showing the deleterious impact of bad behavior on investors' wealth. To summarize their findings from the conclusion, "They ...Read More

  • When Two Minuses Do Not Make a Plus

    5,452
    by IFA Contributors — Tuesday, October 23, 2012

    As a registered investment advisor, Index Funds Advisors, Inc. is constantly solicited by mutual fund companies and ETF (exchange-traded fund) providers hoping to convince us to use their products for our client’s portfolios. Recently, we were invited to a Webinar on an ...Read More

  • The Google Earnings Debacle: The Piranhas Attack

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    by IFA Contributors — Friday, October 19, 2012

    At Index Funds Advisors, Inc, we often talk about the Efficient Markets Hypothesis which states that current prices incorporate all publicly available information. When new information appears, traders act on it like a school of piranhas devouring a fresh piece of ...Read More

  • VP Dimensional Fund Advisors

    The Top Ten Money Excuses

    9,377
    by Jim Parker — Thursday, October 18, 2012

    Human beings have an astounding facility for self-deception when it comes to our own money. We tend to rationalize our own fears. So instead of just recognizing how we feel and reflecting on the thoughts that creates, we cut out the middle man and construct the facade of a ...Read More

  • Hedge Fund Warnings from the SEC

    5,437
    by IFA Contributors — Monday, October 15, 2012

    Anyone who is contemplating investing in a hedge fund would do well to read the SEC's Investor Bulletin: Hedge Funds. This document instructs potential investors to not only read the fund's offering memorandum but also to make sure they understand the fund's investment ...Read More

  • Beating a Dead Horse

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    by IFA Contributors — Friday, October 12, 2012

    Once again, the S&P Indices versus Active Funds (SPIVA®) Scorecard shows the dismal story for active management getting worse and worse. For domestic equity funds in the last 12 months, 86.0% failed to beat their benchmark. The failure rate for five years is a very ...Read More

  • Weston Wellington

    Another Wall of Worry

    8,171
    by Weston Wellington — Thursday, October 4, 2012

    Investors have been confronted with a steady drumbeat of discouraging news over the past year. It's not difficult to explain why mutual fund investors have generally favored fixed income strategies rather than equities over this past twelve-month ...Read More

  • A Problem with Jack Bogle? I Don't Think So!

    7,281
    by IFA Contributors — Tuesday, September 11, 2012

    For anyone who works in the investment advisory business, particularly on the passive side, John (Jack) Bogle is a name held in the highest esteem. A pioneer in the realm of indexing, the founder and longtime CEO of Vanguard brought low-cost investing to countless investors, ...Read More