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Sam Mamudi

To beat index funds, luck is your only hope

7,048
by Sam Mamudi
Tuesday, December 1, 2009

Investors who continue to send money to actively managed mutual funds in the hope that managers will be able to beat less-costly index funds are going to lose out almost all of the time, a new study ...Read More

Archive

  • Harry M. Markowitz explains Portfolio Theory

    7,759
    by Index Funds Advisors — Wednesday, October 28, 2009

    what it is and how it's used from a top-down model from the asset classes to the investments. He covers Standard Deviation, Variance, Correlation, and Covariance. Markowitz also explains what happened in 2008 ...Read More

  • Eugene Fama Jr - Vice President, Dimensional Fund Advisors

    Clarion Call

    6,330
    by Eugene Fama Jr. — Tuesday, April 7, 2009

    When returns are poor (and sometimes even when they're good), investors wonder if things have changed. Is this time different? Does a buy-and-hold strategy still make ...Read More

  • IFA's Quote of the Week - 52 (Fred Schwed Jr.)

    5,871
    by — Friday, April 3, 2009

    "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 ...Read More

  • An Interview with Eugene Fama Jr.

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    by Jennifer Nille — Friday, March 13, 2009

    Has the current financial crisis KO'd capital markets? Eugene Fama Jr. says no. The son of the author of the theory reminds us that in troubled times, believers in efficient markets need the courage of their ...Read More

  • President Index Funds Advisors

    The Resilience of Capitalism: Part II

    6,798
    by Mark Hebner — Monday, March 9, 2009

    updated from December 2008 Now that February 2009 numbers are in, I wanted to update my discussion about this very challenging investment environment over the last 16 months and offer some much-needed ...Read More

  • IFA's Quote of the Week - 48 (Mark Hulbert)

    6,491
    by Mark Hebner / Mary Brunson — Friday, February 27, 2009

    "It is very hard, if not impossible," he wrote in his study, "to justify active management for most individual, taxable investors, if their goal is to grow wealth." ...Read More

  • The Hebner Model: Why Prices Change

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    by Mark T. 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 ...Read More

  • IFA's Quote of the Week - 47 (Charles Ellis)

    5,944
    by Mark Hebner / Mary Brunson — Monday, February 9, 2009

    In his book Index Funds: The 12-Step Program for Active Investors, Mark Hebner identifies that 85% of investors are active investors. This means that a majority of investors handle their investments in one or ...Read More

  • Active vs. Passive Investing

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    by Index Funds Staff — Thursday, January 22, 2009

    The debate between active vs. passive investing has dragged on for more than 40 years; certainly far longer than necessary as reams of academic research continue to reveal the failure of active management to ...Read More

  • IFA's Quote of the Week - 46 (John C. Bogle)

    6,023
    by Mark Hebner / Mary Brunson — Monday, January 12, 2009

    "We need a mutual fund industry with both vision and values; a vision of fiduciary duty and shareholder service, and values rooted in the proven principles of long-term investing and of trusteeship that ...Read More

  • Mark Hebner's Response to Madoff's Mayhem

    7,376
    by Mark Hebner / Mary Brunson — Wednesday, December 17, 2008

    Like so many of you, I have watched in great dismay as the horrific details unfold regarding the Bernard Madoff investment scam—one that has quickly shaped up to be the biggest such scam in ...Read More

  • IFA's Quote of the Week - 40 (William Bernstein)

    5,980
    by Mark Hebner / Mary Brunson — Tuesday, November 18, 2008

    "No one in his right mind would walk into the cockpit of an airplane and try to fly it, or into an operating theater and open a belly. And yet they think nothing of managing their retirement assets. I've ...Read More

  • IFA's Quote of the Week - 38 (Mark T. Hebner)

    5,675
    by Mark Hebner / Mary Brunson — Monday, October 20, 2008

    "Investing in the absence of an investment policy statement reduces decision making to an individual event-driven process of chasing short-term results, eliminating the expectation of achieving the long-term ...Read More

  • Ben Brinkerhoff

    To Optimize or Not Optimize

    5,680
    by Ben Brinkerhoff — Thursday, October 9, 2008

    One question that clients sometimes ask is, "Are IFA's portfolios optimized?" It's a fair question. That word "optimization" is thrown around somewhat loosely, and it certainly sounds like a good thing. ...Read More

  • IFA's Quote of the Week - 37 (Harry Markowitz)

    7,637
    by Mark Hebner / Mary Brunson — Monday, October 6, 2008

    "To reduce risk it is necessary to avoid a portfolio whose securities are all highly correlated with each other. One hundred securities whose returns rise and fall in near unison afford little protection than ...Read More

  • IFA's Quote of the Week - 35 (Jeremy J. Siegel)

    5,161
    by Mark Hebner / Mary Brunson — Wednesday, September 17, 2008

    "The current financial crisis calls out for new products and services as well as more, not less, information about what is safe and profitable in the future environment." ...Read More

  • IFA's Quote of the Week - 34 (Michael C. Keenan)

    5,460
    by Mark Hebner / Mary Brunson — Friday, September 12, 2008

    "Fiduciaries should strongly consider index funds as an alternative to actively managed funds. Index funds incur about 80% less in transaction costs than actively managed funds…long-term returns for actively ...Read More

  • IFA's Quote of the Week - 33 (Matt Krantz)

    5,310
    by Mark Hebner / Mary Brunson — Friday, September 5, 2008

    "Remember when you buy a commodity, you're not buying something that generates earnings and profit. You're buying a hard asset and hoping another buyer will be willing to pay more for that asset in the ...Read More

  • IFA's Quote of the Week - 32 (Benjamin Graham)

    5,342
    by Mark Hebner / Mary Brunson — Friday, August 29, 2008

    "The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic ...Read More

  • IFA's Quote of the Week - 29 (Benjamin Graham)

    5,795
    by Mark Hebner / Mary Brunson — Friday, August 1, 2008

    "The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that ...Read More

  • IFA's Quote of the Week - 24 (Truman A. Clark)

    5,430
    by Mark Hebner / Mary Brunson — Friday, June 20, 2008

    "Investors acquiring commodity futures in expectations of higher returns, lower risk, and improved inflation protection are making bets. Current evidence indicates that the odds are against ...Read More

  • IFA's Quote of the Week - 23 (Richard C. Green)

    5,136
    by Mark Hebner / Mary Brunson — Thursday, June 12, 2008

    "For a long career full of breakthroughs that have advanced our understanding of financial markets, and his early fundamental work on efficient markets, we are proud to have Professor Fama as the first ...Read More

  • IFA's Quote of the Week - 22 (Harry Markowitz)

    6,020
    by Mark Hebner / Mary Brunson — Wednesday, June 4, 2008

    "A good portfolio is more than a long list of good stocks and bonds. It is a balanced whole, providing the investor with protections and opportunities with respect to a wide range of ...Read More

  • IFA's Quote of the Week - 19 (Michael C. Keenan)

    5,370
    by Mark Hebner / Mary Brunson — Monday, May 12, 2008

    "Fiduciaries should strongly consider index funds as an alternative to actively managed funds. Index funds incur about 80% less in transaction costs than actively managed funds…long-term returns for actively ...Read More

  • IFA's Quote of the Week - 18

    5,416
    by Mark Hebner / Mary Brunson — Monday, May 5, 2008

    "Some fiduciary boards, particularly those composed largely of non professionals, do not adequately understand the true returns, risk and cost associated with investment in hedge ...Read More

  • IFA's Quote of the Week - 17 (Jack Meyer)

    5,906
    by Mark Hebner / Mary Brunson — Monday, April 28, 2008

    "Most people think they can find managers who can outperform, but most people are wrong. I will say that 85% to 90% of managers fail to match their benchmarks, if you properly specify their ...Read More

  • IFA's Quote of the Week - 16 (George Miller)

    5,066
    by Mark Hebner / Mary Brunson — Monday, April 21, 2008

    "Many 401(k)-style plans charge hidden fees that can cut deeply into worker's retirement savings, and many plan participants do not have access to low-cost investment options--index funds--that can help them ...Read More

  • IFA's Quote of the Week - 12

    5,552
    by Mark Hebner / Mary Brunson — Wednesday, March 26, 2008

    "res tantum valet quantum vendi potest." - Latin for: "A thing is worth only what someone else will pay for ...Read More

  • IFA's Quote of the Week - 10 (Burton Malkiel)

    5,253
    by Mark Hebner / Mary Brunson — Tuesday, March 11, 2008

    "Historically, the stock market is like a gambling casino with the odds in your favor. Over the long pull, stocks are given something like nine and a half to ten percent compounded per year. The banks have ...Read More