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Top University Retirement Plans: Excessive Fees and Conflicts of Interest

by Tom Allen and Mark Hebner
Monday, September 12, 2016

Lawsuits and retirement plans have become quite the pair in recent years. Plan participants have become aware of the excessive fees and conflict of interest that have plagued the retirement industry—and most are still not even close in terms of being fully financed ...Read More

Article Library

  • Tom Allen and Mark Hebner

    Dreyfus Funds: A Closer Look at the Performance

    by Tom Allen and Mark Hebner — Thursday, September 8, 2016

    Jack Dreyfus, also known as “The Lion of Wall Street,” founded Dreyfus Funds in New York City in 1951. A 1964 Life Magazine article attributes Dreyfus as revolutionizing the advertising of mutual funds, which were largely a part of institutional investing (i.e. ...Read More

  • The Law of Large Numbers: Bill Miller's Fall From Grace

    by Tom Allen and Mark Hebner — Friday, September 2, 2016

    Bill Miller is widely considered one of the most successful investors of all time. At the helm of the Legg Mason Value Trust Fund (LMVTX) for over three decades, he earned the title of legendary by beating the S&P 500 for 15 consecutive years from 1991 through 2005. But ...Read More

  • Jensen Growth Fund Outperformance? It Depends on How You Frame It

    by Tom Allen and Mark Hebner — Friday, August 26, 2016

    A recent article was published on MarketWatch whose provocative title made our eyebrows rise with curiosity. The title read, “How This Stock Fund Routinely Beats the S&P 500.” Let’s just pause right there for a second. Whether or not the intent of the ...Read More

  • Luck vs. Skill: An Update!

    by Tom Allen and Mark Hebner — Thursday, August 25, 2016

    The active fund industry is a marketing machine; ready to pitch short term outperformance as an indication of manager skill. Investors subsequently make a large allocation to these “winners” and more often than not end up earning less than stellar performance ...Read More

  • Tom Allen and Mark Hebner

    BNY Mellon Mutual Funds: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Monday, August 15, 2016

    The Bank of New York Mellon, officially, has only been in existence since 2007 from a merger, but its roots span all the way back to the birth of our nation. The Bank of New York was founded 232 years ago by the first US Secretary of the Treasury, ...Read More

  • The 3.8% Medicare Tax: What You Need To Know

    by Tom Allen and Mark Hebner — Thursday, August 11, 2016

    On January 1, 2013, the US Government introduced a new Net Investment Income Tax of 3.8%. This tax only affects certain households or individuals that meet certain thresholds of net investment income or modified adjusted gross income ...Read More

  • Index Funds: The Documentary Film

    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

  • Tom Allen and Mark Hebner

    Columbia Funds: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Thursday, August 4, 2016

    Columbia Management is one of the largest investment management firms in the world. With close to 7 full decades of industry experience and expertise and over 100 individual investment strategies, Columbia has become a staple within the fund industry. As of year-end 2015, their ...Read More

  • Tom Allen and Mark Hebner

    The 2nd Quarter of 2016 in Review [VIDEO]

    by Tom Allen and Mark Hebner — Tuesday, July 26, 2016

    The second quarter of 2016 was mixed in terms of good and bad news as well as performance. While the Eurozone experienced a big shock in terms of the unanticipated “Brexit” vote, the United States experienced falling jobless claims, increasing in consumer prices, and ...Read More

  • Closing the Behavior Gap

    by Tom Allen and Mark Hebner — Monday, July 25, 2016

    “Insanity: doing the same thing over and over again and expecting different results.” – Albert Einstein Market timing is and has been one of the most disastrous investment ideas to plague our world. This isn’t due to some natural absolute law like ...Read More

  • Tom Allen and Mark Hebner

    Dodge & Cox: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Thursday, July 7, 2016

    San Francisco based Dodge & Cox is one of the most well-known investment management firms in the world. More impressively, they have been able to build a very sizeable asset base on the back of just 6 mutual funds. According to Morningstar, total assets under management as ...Read More

  • Brian Schroeder

    Benchmark Linking: What Plan Sponsors Should Know

    by Brian Schroeder — Friday, July 1, 2016

    Believe it or not, many plan sponsors of institutional investment plans do not have a reliable benchmark to judge their total performance over time.  How can this be?  What could be more fundamental than the ability to accurately evaluate investment results? Although ...Read More

  • Market Efficiency & Behavioral Biases

    by Tom Allen and Mark Hebner — Tuesday, June 28, 2016

    One of the most misunderstood tenants of the efficient market hypothesis (EMH) has to do with assumption that all decisions made by market participants are rational. In other words, the millions of people who are buying and selling securities act as robots where they are ...Read More

  • UK's EU Referendum Result

    by Dimensional Fund Advisors — Friday, June 24, 2016

    On June 23, citizens of the United Kingdom voted to leave the European Union. While there has been much speculation leading up to and since the vote, many of the longer-term implications of the referendum remain unclear, as the process for negotiating what a UK exit may look ...Read More

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

    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

  • Pensions Unaware Hidden Real Estate Fees Dwarf Those Disclosed

    by Edward Siedle, Founder, — Tuesday, June 21, 2016

    In recent years, following a decade-long gorging on hedge and private equity funds by government pensions, the massive hidden fees and expenses related to these "alternative" investment funds have attracted greater scrutiny. Despite initial skepticism, it is now widely ...Read More

  • Tom Allen and Mark Hebner

    Bond Funds or Individual Bonds? What You Need To Know

    by Tom Allen and Mark Hebner — Friday, June 17, 2016

    A common question we receive from clients has to do with bond strategies. Should we buy bond funds or build individual bond ladders? There are a few things to keep in mind when thinking the role of fixed income from a portfolio standpoint. As an investment advisor, we think ...Read More

  • Tom Allen and Mark Hebner

    False Diversification

    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

    Vanguard's Active Funds: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Tuesday, June 7, 2016

    Vanguard is the largest fund management company in the world. Mostly known for being a pioneer in the development of index funds, they also carry quite a few actively managed funds in their lineup.                      ...Read More

  • Eugene Fama: One of A Kind

    by Tom Allen and Mark Hebner — Monday, June 6, 2016

    Academics are a hallmark of the investment strategy that we recommend to our clients. While there are plenty of sales pitches professing some sort of new or “hot” idea on how to get rich quick, we rely on peer-reviewed academic research to guide the decisions that we ...Read More

  • Index Reconstitution: The Price of Tracking

    by Dimensional Fund Advisors — Thursday, June 2, 2016

    With the annual reconstitution of the Russell indices approaching, it is a good opportunity to revisit how index reconstitution events affect trading costs and returns. Index funds are an innovative solution for investors that provide diversified investments at low fees. On any ...Read More

  • Tom Allen and Mark Hebner

    Invesco: A Deeper Look At the Performance

    by Tom Allen and Mark Hebner — Wednesday, June 1, 2016

    Invesco Ltd. is one of the most well-known investment firms in the country. Their operations span over 20 different countries around the world and are involved in investment management, wealth management, banking, and alternative ...Read More

  • Tom and Becky

    Volatility... Is There More of it Today?

    by Tom Allen and Becky Vasquez — Wednesday, May 25, 2016

    If you follow the stock market, you cannot get away from the word volatility.  It is discussed in the media, over the Internet, the front page of the newspaper’s Business section.  All you have to do is Google “today’s volatility” and you will ...Read More

  • Tom Allen and Mark Hebner

    T. Rowe Price: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Thursday, May 19, 2016

    T. Rowe Price has clearly stated their value proposition to their investors. But what exactly is that value and, more importantly, who is receiving the bulk of that value?                               ...Read More

  • Tom and Denise

    Reverse Mortgages: What You Need to Know

    by Tom Allen and Denise Delaney — Tuesday, May 17, 2016

    There has been a sharp rise in the reverse mortgage market in last the decade within the United States. According to the National Reverse Mortgage Lenders Association (NRMLA), the annual number of reverse mortgage loans issued has grown from 157 in 1990 to over 58,000 in 2015. ...Read More

  • Family Limited Partnerships: What You Need To Know

    by Tom Allen and Mark Hebner — Tuesday, May 10, 2016

    Wealth transfer strategies are an extremely important topic when it comes to financial planning. Establishing the proper legal conduits to ensure the maximum amount assets transferred to beneficiaries according to a client’s best wishes is one of the biggest value ...Read More

  • The Matrix Book: A DFA Tradition [VIDEO]

    by Mark Hebner and IFA Contributors — Friday, May 6, 2016

    "Data! Data! Data!" he cried impatiently, "I cannot make bricks without clay!" — The Adventures of Sherlock Holmes, The Adventure of the Copper Beeches - Sir Arthur Conan Doyle, ...Read More

  • The Small-Cap "Alpha" Myth: An Update!

    by Tom Allen and Mark Hebner — Wednesday, April 27, 2016

    There is a common misconception about “alpha” in the small-cap market within the United States. Many professionals believe that once we step out of the mega-cap world of companies like Google, Wal-Mart, Coca-Cola, and Apple where there is an army of analysts digging ...Read More

  • Fortune's Most Admired Companies in 2001 Versus Index Funds

    by Tom Allen and Mark Hebner — Monday, April 25, 2016

    We analyzed Fortune's "Ten Most Admired Companies" (2001)1 as a whole portfolio and as individual companies, comparing them to 10 index portfolios for the 15-year period from January 2001 through December 2015. The results of the study are shown in the chart below, indicating ...Read More

  • A Look Back at Eugene Fama's 2013 Nobel Prize in Economics

    by Mark Hebner and IFA Contributors — Sunday, April 24, 2016

    As we approach the three year anniversary of Professor Eugene Fama winning the Nobel Prize in Economic Sciences, we thought it worthwhile to call attention to this article by his colleague at the University of Chicago Booth School of Business and son-in-law, Professor John H. ...Read More

  • Tom Allen and Mark Hebner

    Pursuing a Better Investment Experience with Index Fund Advisors

    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

  • The 1st Quarter of 2016 in Review [VIDEO]

    by Tom Allen and Mark Hebner — Tuesday, April 19, 2016

    The first quarter of this year was a textbook case on the importance of having discipline when approaching the investment process. January was a punishing month for markets around the world as fears of China’s economic slowdown precipitated across all major asset classes. ...Read More

  • Tom Allen and Mark Hebner

    The Not So Midas Touch - A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Monday, April 18, 2016

    King Midas of Pessinus was a well-known character in Greek mythology that was known for turning whatever he touched into gold, known as the Midas Touch. Some companies have embraced the story of King Midas and his touch within their own ...Read More

  • Tom Allen and Mark Hebner

    Oppenheimer Funds: A Deeper Look At Their Performance

    by Tom Allen and Mark Hebner — Tuesday, April 12, 2016

    Oppenheimer Funds is a subsidiary of Oppenheimer Holdings & Co., one of the largest financial institutions in the entire world. Having roots dated over a century ago, the Oppenheimer name has acted as a beacon of financial expertise. Their services include investment baking, ...Read More

  • Fort Lauderdale Joins the Evidence-Based Investing World

    by Tom Allen and Brendan Connelly — Monday, April 11, 2016

    Being a part of the passive investment community can be very isolating at times. It is a constant uphill battle against an industry that is built largely on an illusion. Most of the headlines and stories by active managers that we read in any online or print publications are ...Read More

  • Free Throws

    by David Butler — Wednesday, April 6, 2016

    Dave Butler offers a sports example to help investors apply discipline in a stressful market   “What do you regard as the most difficult period in the financial markets during your 25 years in the investment business?” I am often asked this question, usually by ...Read More

  • Tom Allen and Mark Hebner

    Wells Fargo: A Deeper Look at the Performance

    by Tom Allen and Mark Hebner — Thursday, March 31, 2016

    Wells Fargo is one of the largest institutions in the world. In fact, it is considered a Systematically Important Financial Institution (SIFI), in which its failure could potentially lead to a much larger financial crisis, similar to what we experienced in 2008 and ...Read More

  • Warren Buffett, Market Efficiency and the Disappearance of Alpha

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

    As staunch admirers of Warren Buffett, we at IFA can only marvel at the value he has created for his investors over the course of his illustrious career. Anyone fortunate enough to own Berkshire Hathaway since June 1st, 1979 has seen a remarkable 711-fold increase in wealth as ...Read More

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

    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

  • How To Read Your Form 1099 Composite

    by Tom Allen and Mark Hebner — Friday, March 18, 2016

    As we approach tax day (April 18th, 2016), we wanted to take the time to go over the 1099 Forms that have been provided to our clients by Fidelity, Schwab, and TD Ameritrade. If you haven’t received this document, you can download them online at your custodian’s ...Read More

  • The $1 Million Dollar Bet: Buffett Winning Big

    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

  • DoubleLine Equities Growth Fund: Another One Bites the Dust

    by Tom Allen and Mark Hebner — Monday, March 14, 2016

    We have written extensively about the “stock pickers graveyard,” which is the final resting place for those funds that ended up on the wrong side of Lady Luck. Jeffrey Gundlach, former fund manager and founder of DoubleLine Capital, recently announced that they were ...Read More

  • Diversification: Expanding the Opportunity Set!

    by Tom Allen and Mark Hebner — Monday, March 7, 2016

    “Diversification is your buddy!” – Merton Miller, Nobel Laureate Diversification means different things to different people. Some people understand the timeless adage of “don’t put all of your eggs in one basket,” which strongly emphasizes the ...Read More

  • The Leap Year Approach to Investing

    by Tom Allen and Mark Hebner — Thursday, March 3, 2016

    2016 marks another special year for those who happened to have a significant event, like a birthday or wedding anniversary, fall on February 29th. The Leap Year, which is that extra day that we get every 4 years to help align our calendar year with an actual solar year ...Read More

  • Quantifying the Value of Tax Loss Harvesting: An Update

    by Tom Allen and Mark Hebner — Monday, February 29, 2016

    In August of 2014 we released a study that attempted to quantify the value of providing tax loss harvesting services using a data sample from our own clients’ experiences. As we mentioned in the original study, there has been dispute among investment professionals on ...Read More

  • Booth, Fama and French: Perspectives on Market Volatility

    by Dimensional Fund Advisors — Friday, February 26, 2016

    Volatile markets can be stressful for investors. But volatility also can be viewed in a more positive light. Price changes show that markets are working as they quickly incorporate new information into stock prices. A sound investment philosophy can guide behavior during ...Read More

  • Volatility is a Good Thing!

    by Tom Allen and Mark Hebner — Tuesday, February 23, 2016

    Many readers may call us crazy, but hear us out. The beginning of 2016 has been tumultuous to say the least. Concerns over China’s transition from an export based economy to a more developed economy based on its own aggregate demand as ...Read More

  • Oil Prices and Equity Returns

    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 falling oil prices acting as a tailwind for the overall economy, ...Read More

  • Good Advice

    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

  • Low Future Economic Growth and Expected Returns

    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. Although the stories are compelling, we believe that investors should be ...Read More