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murray@ifa.com

Closet Indexers Face More Scrutiny

1,772
by Murray Coleman
Monday, April 30, 2018

A group of 13 large active managers have agreed to suppy data about how closely funds track their indexes. Overall, closet indexers are expected to top $1.3 trillion in ...Read More

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  • murray@ifa.com

    Investment Management's Dirty Little Secret

    2,278
    by Murray Coleman — Thursday, April 26, 2018

    The financial advice industry has a dark secret, one that costs global investors dearly every year. In a wide-ranging Q&A, IFA Founder Mark Hebner talks about these and other money management potholes that investors should avoid and how to do ...Read More

  • murray@ifa.com

    Putting 'Fiduciary' into Retirement Planning

    1,712
    by Murray Coleman — Tuesday, April 10, 2018

    The U.S. retirement plan marketplace keeps evolving. Just ask Shareen Balkey, who sees such changes in 401(k) plans and the like as boosting the need for true fiduciaries to help both plan participants and ...Read More

  • Murray Coleman

    Diary of a 'Reformed' Journalist

    3,024
    by Murray Coleman — Tuesday, April 3, 2018

    I was trained as a journalist to approach any type of speculative claim with a high degree of skepticism. But it took years of sifting through a wealth of academic research and market evidence for me to finally make a career change. In all honesty, it's just become too apparent ...Read More

  • Mary Brunson

    Feeling Good About Your Fund Manager? Read and Heed the Fine Print

    1,808
    by Mary Brunson — Friday, March 30, 2018

    Each year, fund managers randomly land in one of four performance quartiles. And, every year, Standard and Poor's issues its annual Persistence Scorecard, tracking the past and subsequent performance of those managers. One of the uses of the study is to track how winning ...Read More

  • Jim Parker

    Sailing with the Tides

    1,548
    by Jim Parker — Tuesday, March 27, 2018

    Embarking on a financial plan is like sailing around the world. The voyage won’t always go to plan, and there’ll be rough seas. But the odds of reaching your destination increase greatly if you are prepared, flexible, patient, and well-advised. A mistake many ...Read More

  • Tom Allen and Mark Hebner

    Great West: A Deeper Look at the Performance

    4,884
    by Mark Hebner and IFA Contributors — Thursday, March 22, 2018

    Great-West Financial is a subsidiary of Great-West Life, Co. (TSX: GWO), which itself is a subsidiary of Power Financial Corp. (TSX: POW) based out of Montreal, Quebec, Canada. Great-West Financial is the American market for Great-West Life, Co.’s, selling its investment, ...Read More

  • Murray Coleman

    Bad Brokers

    1,808
    by Murray Coleman — Tuesday, March 20, 2018

    Despite a push by regulators to raise legal standards for how brokers work with investors, misdeeds keep popping up in the public record. The latest development is that the Securities and Exchange Commission has settled with Ameriprise Financial Services over allegations the ...Read More

  • David Booth

    A Transformed Investor's View of Market Uncertainty

    1,855
    by David Booth — Tuesday, March 13, 2018

    Markets have been up and down this year, which can be hard for many investors to live with. During periods like these, hearing stories about how other people deal with uncertainty can be helpful. My friend Dave Goetsch is an executive producer of The Big Bang Theory. Even though ...Read More

  • Tom Allen and Mark Hebner

    Vanguard vs. Dimensional: Through A Statistical Lens

    11,511
    by Tom Allen and Mark Hebner — Tuesday, March 13, 2018

    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

  • Brad Steiman

    Relying on Market Prices

    1,780
    by Brad Steiman — Tuesday, March 6, 2018

    To pique the interest of investors, the financial media often features stories about the hidden dangers in the market—and index funds have been a recurring topic lately. According to some stories, the rising popularity of indexing has distorted prices because fewer shares ...Read More

  • Tom Pohlen and Mark Hebner

    2017 Q4 Market Review

    1,991
    by Tom Pohlen and Mark Hebner — Tuesday, February 20, 2018

    Once again in quarter four of 2017, markets delivered positive results across all major asset classes to close out the year.  While International Developed Markets fell behind the performance of U.S. Domestic Equities when comparing quarter three with quarter four; Emerging ...Read More

  • Mark Hebner

    Market Declines and Volatility

    2,090
    by Mark Hebner — Wednesday, February 14, 2018

    In light of all this market volatility over the last few days, we wanted to remind you of the benefits of being a buy and hold ...Read More

  • jackson

    Recent Market Volatility

    2,398
    by Dimensional Fund Advisors — Wednesday, February 7, 2018

    After a period of relative calm in the markets, in recent days the increase in volatility in the stock market has resulted in renewed anxiety for many investors. From February 1–5, the US market (as measured by the Russell 3000 Index) fell almost 6%, resulting in many ...Read More

  • Dimensional Fund Advisors

    New Year, New Market Highs

    1,873
    by Dimensional Fund Advisors — Monday, February 5, 2018

    Throughout 2017, the S&P 500 Index recorded 62 new closing highs in 251 days of trading. In the first three weeks of January 2018 alone, the index crossed 10 new record closing highs in 13 days of trading. With stock indices continuing to set new highs, does this mean ...Read More

  • Robin Powell

    Francis Galton and the Iron Rule of Markets

    2,793
    by Robin Powell — Wednesday, January 31, 2018

    “Reversion to the mean,” Jack Bogle once said, “is the iron rule of financial markets.” And if you understand nothing else about how investing works, grasping this one simple concept will give you a better chance of succeeding at it than supposedly ...Read More

  • Tom Allen and Mark Hebner

    Prudential Financial: A Deeper Look at the Performance

    6,081
    by Mark Hebner and IFA Contributors — Tuesday, January 30, 2018

    Prudential Financial is a Fortune 500 company based out of Newark, New Jersey. Traded on the New York Stock Exchange (NYSE: PRU), Prudential Financial employs over 49,000 people across 40 countries, offers insurance products, wealth management, fund management, and retirement ...Read More

  • jackson

    The Uncommon Average

    2,476
    by Dimensional Fund Advisors — Tuesday, January 23, 2018

    “I have found that the importance of having an investment philosophy—one that is robust and that you can stick with— cannot be overstated.” – David Booth The US stock market has delivered an average annual return of around 10% since 1926.[1] ...Read More

  • Mark Hebner and IFA Contributors

    Fairholme and Sequoia—No Great Performance Here - 2017 Update

    11,294
    by Mark Hebner and IFA Contributors — Tuesday, January 16, 2018

    Recently, we received a question from a client that we will paraphrase as follows: “While I know that the returns I have gotten from index funds have beaten the majority of active managers, would I not have been better off in funds like the Fairholme Fund (FAIRX) or the ...Read More

  • Dimensional Fund Advisors

    Home Bias and Global Diversification

    2,386
    by Dimensional Fund Advisors — Thursday, January 11, 2018

    By pursuing a globally diversified approach to investing, one doesn’t have to attempt to pick winners to achieve a rewarding investment experience. Every day we enjoy the benefits of an interconnected world. We might start our day with a cup of coffee that originated in ...Read More

  • Dimensional Fund Advisors

    As Goes January, So Goes the Year?

    2,091
    by Dimensional Fund Advisors — Tuesday, January 9, 2018

    As investors ring in the new year, some may see the occasional headline about the “January Indicator” or “January Barometer.” This theory suggests that the price movement of the S&P 500 during the month of January may signal whether that index will ...Read More

  • Mark Hebner

    IFA By the Numbers - 2018

    5,462
    by Mark Hebner — Friday, January 5, 2018

    As we begin 2018, it has become a tradition that we reflect on the prior year by collecting our IFA statistics (or, what has grown to be known as IFA By the Numbers) on the abundance and wealth of information we provide in dedication towards replacing speculation with an ...Read More

  • Jim Parker, Dimensional Fund Advisors

    Catchphrase Investing

    3,043
    by Jim Parker, Dimensional Fund Advisors — Tuesday, December 26, 2017

    The financial media is drawn to catchphrases, acronyms, and buzzwords that can be sold as the new thing. FAANG (Facebook, Apple, Amazon, Netflix, and Google) is the latest of these. But does this constitute an investment strategy? For journalists, commentators, and marketers, ...Read More

  • Dimensional Fund Advisors

    To Bit or Not to Bit: What Should Investors Make of Bitcoin Mania?

    3,356
    by Dimensional Fund Advisors — Friday, December 15, 2017

    Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional ...Read More

  • Mark Hebner

    Rebalancing Portfolios

    14,988
    by Mark Hebner — Tuesday, December 12, 2017

    It is important for investors to rebalance their portfolio to achieve risk control and maintain long-term investing ...Read More

  • Mark Hebner

    Time for the Fire Drill

    5,379
    by Mark Hebner — Monday, December 4, 2017

    Most of us remember the days at school when we had our routine fire drill. The fire alarms around the school would ring, we would all calmly and collectedly stand up, form a line, and walk out of the school to a safe place. While I am sure many ...Read More

  • Dimensional Fund Advisors

    Key Questions for the Long-Term Investor

    2,628
    by Dimensional Fund Advisors — Tuesday, November 28, 2017

    Focusing on what you can control can lead to a better investment experience. Whether you’ve been investing for decades or are just getting started, at some point on your investment journey you’ll likely ask yourself some of the questions below. Trying to answer these ...Read More

  • Tom Allen and Mark Hebner

    Richard Thaler's Nobel Prize and Practical Implications for Investors

    3,058
    by Tom Allen and Mark Hebner — Tuesday, November 14, 2017

    Professor Richard Thaler from the University of Chicago received the 2017 Nobel Memorial Prize in Economic Sciences for his work in behavioral finance. This comes just four years after his colleague, Eugene Fama, received his Nobel Memorial Prize for his work on asset pricing ...Read More

  • Tom Allen and Mark Hebner

    2017 Year-End Distributions & Portfolio Management

    2,860
    by Tom Allen and Mark Hebner — Monday, November 6, 2017

    At Index Fund Advisors, it is standard operating procedure for us to tailor how we manage client portfolios at year-end in anticipation of dividend and capital gains distributions from the mutual funds that we buy. The gist of this strategy is that we do not want to buy into ...Read More

  • Tom Allen and Mark Hebner

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

    2,769
    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

    What About A Reverse Glide Path Strategy?

    4,430
    by Tom Allen and Mark Hebner — Tuesday, October 24, 2017

    Most investors are aware of the standard “age in bonds” asset allocation strategy. Naturally, as you get older the higher your allocation to bonds. A 20 year old would have an 80/20 stock/bond split while a 70 year old would have a 30/70 stock bond split. The ...Read More

  • Tom Allen and Mark Hebner

    2017 Q3 Market Review

    2,846
    by Tom Allen and Mark Hebner — Thursday, October 19, 2017

    Markets delivered strong positive results across the board in the 3rd Quarter of 2017. International Developed Markets and Emerging Markets continued their outperformance of the U.S. In the U.S., companies posted profit growth not seen in close to six years, factory-sector ...Read More

  • Tom Allen and Mark Hebner

    Broker-Dealers, Fees, and Bad Internal Controls

    2,928
    by Tom Allen and Mark Hebner — Tuesday, October 10, 2017

    We at Index Fund Advisors provide many reasons why investors should steer clear of actively managed mutual funds. Mainly, they have failed to deliver on their proposed value proposition: excess risk-adjusted returns (i.e. “alpha”). The number that has delivered is ...Read More

  • Tom Allen and Mark Hebner

    The Doomsday Portfolio: Is There Merit?

    3,203
    by Tom Allen and Mark Hebner — Thursday, October 5, 2017

    Many investors remember the most recent financial crisis and the toll that it took, not only on their retirement portfolio, but also their sanity. The subsequent impact of this event left many jaded in terms of trusting markets with their long-term savings. One of the ...Read More

  • Tom Allen and Mark Hebner

    Franklin Templeton: A Deeper Look at the Performance

    15,210
    by Tom Allen and Mark Hebner — Wednesday, September 27, 2017

    Franklin Templeton is one of the biggest asset managers in the world. Celebrating its 70th Anniversary this year, Franklin Templeton has become a household name among retail and institutional investors alike. Based out of San Mateo, CA, Franklin Templeton manages approximately ...Read More

  • Tom Allen and Mark Hebner

    Are Small Cap and Value Tilts Active Bets Against the Market?

    4,283
    by Tom Allen and Mark Hebner — Tuesday, September 19, 2017

    For the investors who are familiar with the known dimensions of expected return (size, relative-price, profitability, etc.), chances are that you have decided to tilt your portfolio accordingly. IFA’s 100 Index Portfolio also tilt our asset allocation towards small cap and ...Read More

  • Tom Allen and Mark Hebner

    Loomis Sayles: A Deeper Look at the Performance

    3,960
    by Tom Allen and Mark Hebner — Tuesday, September 5, 2017

    Boston based asset manager, Loomis Sayles, has been around since just before the Great Depression. As of March 31, 2017, they manage close to $250 billion in assets under management across 10 mutual fund strategies, institutional separate accounts, collective trusts, and hedge ...Read More

  • Tom Allen and Mark Hebner

    Parnassus Investments: A Deeper Look at the Performance

    5,241
    by Tom Allen and Mark Hebner — Tuesday, August 29, 2017

    Harvard Business School graduate Jerome L. Dodson founded San Francisco-based Parnassus Investments in 1984. Launching their first investment strategy in 1984, the Parnassus Fund (PARNX), with an eye towards responsible investing, one of the distinguishing characteristics of ...Read More

  • Mark Hebner and IFA Contributors

    The Never-Ending Pursuit of Manager Alpha – Updated

    13,301
    by Mark Hebner and IFA Contributors — Thursday, August 24, 2017

    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 investors handsomely pay active managers to deliver alpha (an ...Read More

  • tom

    To Margin or Not To Margin?

    3,007
    by Wes Long and Tom Allen — Tuesday, August 15, 2017

    Debt: properly used can be very beneficial, but misused can lead an individual down the path of financial ruin. Many financial firms espouse the benefits of acquiring debt by using securities portfolios as collateral for margin loans. Getting a loan against your securities ...Read More

  • Tom Allen and Mark Hebner

    Newly Issued Fiduciary Rule Explained

    3,438
    by Tom Allen and Mark Hebner — Wednesday, August 9, 2017

    One of the hottest topics in the financial services industry over the last two years has been the Department of Labor’s “Fiduciary Rule” as it applies to retirement assets. There have been many debates in the U.S. Congress and practitioners alike about the ...Read More

  • Tom Allen and Mark Hebner

    Baron Funds: A Deeper Look at the Performance

    5,899
    by Tom Allen and Mark Hebner — Tuesday, August 1, 2017

    Ronald Baron is widely known as one of the most successful investors in the U.S. Getting his start in the brokerage industry, Mr. Baron focused on the smaller, less desirable companies that didn’t seem necessarily attractive to most money managers. Finding success early on ...Read More

  • Dimensional Fund Advisors

    Mutual Fund Landscape - 2017

    3,414
    by Dimensional Fund Advisors — Thursday, July 27, 2017

    Each year, Dimensional analyzes returns from a large sample of US-based mutual funds. Our objective is to document the power of market prices by assessing fund manager performance relative to index benchmarks. This year’s study updates results through 2016. The evidence ...Read More

  • Tom Allen and Mark Hebner

    The 2nd Quarter of 2017 in Review

    3,496
    by Tom Allen and Mark Hebner — Friday, July 21, 2017

    Markets continued their climb during the 2nd Quarter of 2017 with most of the gains coming from outside of the United States. In the U.S., home sales reached highest levels since its peak before the 2008 Financial Crisis, job openings hit hew highs, the unemployment level fell ...Read More

  • Tom Allen and Mark Hebner

    The Academic Advantage

    4,362
    by Tom Allen and Mark Hebner — Tuesday, July 18, 2017

    The financial services industry has evolved over the last six decades. What started as essentially a broker or salesman role for getting people access to publicly traded securities has transformed into an academic discipline. We have documented this evolution from its roots with ...Read More

  • Tom Allen and Mark Hebner

    Bridgeway Capital Management: A Deeper Look at The Performance

    4,772
    by Tom Allen and Mark Hebner — Wednesday, July 5, 2017

    Multi-factor investing is slowly becoming a more common investment strategy among professional investment management firms. These firms, more informally known as “quants,” use statistical models to understand the common factors that drive performance in markets ...Read More

  • Dimensional Fund Advisors

    Global Market Breakdown

    4,847
    by Dimensional Fund Advisors — Tuesday, June 27, 2017

    The global market breakdown represents the value of capitalism among the U.S., International/Developed, and Emerging Markets around the world. Investors can use the global market breakdown as a starting point in determining their overall equity asset allocation and then make ...Read More

  • Dimensional Fund Advisors

    When Rates Go Up, Do Stocks Go Down?

    4,224
    by Dimensional Fund Advisors — Wednesday, June 21, 2017

    Should stock investors worry about changes in interest rates? Research shows that, like stock prices, changes in interest rates and bond prices are largely unpredictable.[1] It follows that an investment strategy based upon attempting to exploit these sorts of changes ...Read More

  • Tom Allen and Mark Hebner

    How Accurate Are JP Morgan's Capital Market Assumptions?

    5,304
    by Tom Allen and Mark Hebner — Friday, June 16, 2017

    JP Morgan publishes their annual “Long-Term Capital Market Assumptions” report every year with the hopes of providing professionals guidance in terms of what we should expect from markets over the next 10 to 15 years. On its face, being able to accurately forecast ...Read More

  • Tom Allen and Mark Hebner

    Stock Picking Fails in All Types of Markets

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    by Tom Allen and Mark Hebner — Tuesday, June 6, 2017

    A very common sales pitch amongst the active management community is their ability to provide “downside protection” for investors in falling markets. Here is an example from MFS Investment Management and our appropriate response. Given that most investors remember ...Read More

  • Tom Allen and Mark Hebner

    Dimensions of Expected Return: Patience is a Virtue – 2017 Update

    4,009
    by Tom Allen and Mark Hebner — Monday, May 29, 2017

    Giving investment advice should always aim to meet investors at their level of understanding. We do not expect everyone to have a PhD in Economics, so it is important to focus on big ideas that are the most crucial to understand. This can include ideas such as diversification, ...Read More

  • Tom Allen and Mark Hebner

    Legg Mason: A Deeper Look at the Performance

    10,133
    by Tom Allen and Mark Hebner — Wednesday, May 24, 2017

    Legg Mason, Inc. has been a powerhouse in the world of asset management for over a century. Founded in Baltimore, Maryland in 1899, Legg Mason is a publicly traded company (NYSE: LM) manages $710 billion in assets across six continents and employs over 3,400 professionals across ...Read More