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Replacing Speculation With An Education: Investors Embrace Index Funds

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by Tom Allen and Mark Hebner
Wednesday, February 3, 2016

The war has been long. Much longer than the World Wars of the 20th century, the Vietnam War, the Civil War, and even the war on terrorism. This war started in the early 1960s, when statisticians began digging into stock price data to find trends. To their bewilderment, ...Read More

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  • Shifting the Conversation: Benchmarks for Managing Income Uncertainty

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    by Tom Allen and Mark Hebner — Monday, February 1, 2016

    In order to find the right solution, you must ask the right question. Within retirement planning, particularly within the realm of target date funds, we may have been asking the wrong question for some time now. Many investors are well aware of traditional target date fund ...Read More

  • The Retirement Plan Puzzle: Advisor is the Key Piece

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    by Tom Allen and Mark Hebner — Friday, January 29, 2016

    The retirement plan industry has come out of the shadows in the last three decades. For the better half of the last century, the topic of retirement plans could have rivaled watching the grass grow in terms of entertainment and intellectual curiosity. Why? Most citizens whose ...Read More

  • Tom Allen and Mark Hebner

    USAA Mutual Funds: A Deeper Look at Their Performance

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    by Tom Allen and Mark Hebner — Friday, January 22, 2016

    The United Services Automobile Association (USAA) started during the roaring 20’s. Their story began with US Army officers who were refused insurance due to the risky nature of their careers (only 4 years removed from World War I). These men saw a ...Read More

  • What Jack Bogle Does With a 10% Market Drop: Absolutely Nothing!

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    by Tom Allen and Mark Hebner — Friday, January 22, 2016

    In a recent interview with CNBC, founder of Vanguard, Jack Bogle, tells investors do just “stand still,” amid the recent 10% drop in US markets. Highlights include maintaining the same savings behavior for retirement plan participants, the superiority of index ...Read More

  • A Vanishing Value Premium?

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    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 previous period when challenging performance caused many to question the ...Read More

  • The 4th Quarter of 2015 in Review [VIDEO]

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    by Tom Allen and Mark Hebner — Wednesday, January 20, 2016

    The best way we can describe the 4th Quarter, overall, is a great end to somewhat of an abysmal year. Stocks delivered positive results in the United States, International/Developed, and Emerging Markets. Global Real Estate and Foreign Bonds also posted positive results, while ...Read More

  • Alternative Investments in Target-Date Funds: Poisoning the Well

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

    A recent report was released by ThinkAdvisor cited the recent increase in alternative investments making their way into defined contribution plans. According to Cerulli Associates, a research firm based out of Boston, “alternatives have long been used in defined benefit ...Read More

  • 2016: Ten Predictions to Count On

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    by Jim Parker — Wednesday, January 13, 2016

    The New Year is a customary time to speculate. In a digital age, when past forecasts are available online, market and media professionals find it harder to hide their blushes when their financial predictions go awry. But there are ways around that. The ignominy that goes with ...Read More

  • What Not To Put On Your New Year's Resolution List: Investment Strategy

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

    As we start the beginning of the year as we all customarily do, evaluating some of the things we neglected in the previous year, such as health and wellness, certain relationships, etc., and decide to reverse those trends this year, the one thing that should not be on the ...Read More

  • The Market Playing Peek-a-Boo

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    by Mark Hebner — Thursday, January 7, 2016

    Have you ever noticed how a newborn’s favorite game is peek-a-boo? Now you see it. Now you don’t. In 2015, global markets seemed particularly intent on playing peek-a-boo with ...Read More

  • The Market Knows Best: Federal Reserve Raises Rates

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    by Tom Allen and Mark Hebner — Tuesday, January 5, 2016

    Well there you have it folks. The Federal Reserve finally took action to increase the Federal Funds Rate. The catastrophe that was anticipated by many financial pundits ended up being what seemed like no news at all. How could this possibly be? While many market participants ...Read More

  • 5 Actions You Should Take Going Into 2016

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    by Tom Allen and Mark Hebner — Tuesday, December 29, 2015

    As we button up the end of another year here at IFA, we wanted to remind clients of some of the things they should be thinking about when it comes to their finances going into ...Read More

  • The Short End of a Corrupt Giant

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    by Tom Allen and Mark Hebner — Monday, December 28, 2015

    Most of us are aware of the story of David and Goliath from the Holy Bible. According to the Books of Samuel, Goliath was a Philistine warrior of tremendous strength and size who was defeated by a much smaller, ...Read More

  • You, Your Financial Well-Being and the Federal Reserve

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    by Mark Hebner — Tuesday, December 22, 2015

    It’s been nearly a decade in the making, but time has finally come: On December 16, 2015, the U.S. Federal Reserve (the Fed) raised the federal funds rate by 0.25 percent. In and of itself, it’s a small move. But it’s being reported as “a historic ...Read More

  • Portfolio Rebalancing: A Reminder on Why We Do It

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    by Tom Allen and Mark Hebner — Thursday, December 17, 2015

    As we come to the end of the year, many clients may be wondering whether or not there needs to be action taken within their portfolio. Some asset classes, like International/Developed Small Cap stocks, have done quite well year-to-date, while others, like Emerging Markets Value, ...Read More

  • Tom Allen and Mark Hebner

    Thrivent Financial: A Deeper Look at Their Performance

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    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 process that incorporates facets of overall wealth management like ...Read More

  • The Devil's Financial Dictionary

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    by Mark Hebner — Monday, December 7, 2015

    Jason Zweig is one of the few financial journalists who writes articles and books that actually contribute an investor's success in capturing the returns that markets have to offer. His books include  ...Read More

  • Second-Hand News

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    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 of what is already built into prices. One academic study appears to ...Read More

  • A Journey to the Past for Advice in the Present

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    by Tom Allen and Mark Hebner — Wednesday, December 2, 2015

    Let’s travel back 55 years into the past and see what the world was like. It was the early-1960s, where our country was still riding the coattails of a post-war economic and population boom. President John F. Kennedy would be elected into office, the United States would ...Read More

  • Tom Allen and Mark Hebner

    The MFS "Active Advantage"... Really?

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    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

  • Independence & Financial Advice: Another Case That Proves the Point

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    by Tom Allen and Mark Hebner — Friday, November 6, 2015

    There has been a consistent theme within the financial services industry for far too long: conflicts of interest. What motivates your personal wealth advisor to give the advice that they give? It is sometimes not as clear-cut as some of us think. Ideally, it would be doing what ...Read More

  • IFA's Take On What's Appropriate for a Performance Monitoring Report

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    by Tom Allen and Mark Hebner — Wednesday, October 28, 2015

    One of the most important functions as an investment fiduciary is to monitor our entire investment lineup that we advise for our clients. It is almost like a report card for the advice we give. But not all performance-monitoring reports (PMR) are universal, and IFA’s take ...Read More

  • Recent Trends in the Global Market Breakdown

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    by Tom Allen and Mark Hebner — Thursday, October 22, 2015

    The world economy is a continuously shifting system. Consumer preferences are in constant flux and new ideas for businesses are cropping up what seems like every single day. Where investors place value can tell us a lot about the future growth of any local or regional economy, ...Read More

  • Index Fund Assets Still on the Rise

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    by Tom Allen and Mark Hebner — Wednesday, October 21, 2015

    The Investment Company Institute (ICI) published its annual Fact Book back in May, which addressed the recent trends in the mutual fund and exchange traded fund investment strategies. One of the most common trends that the ICI saw in 2014 was the large inflow into index funds ...Read More

  • Advisor Risk - How Would You Rate Your Advisor's Risk?

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    by Mark Hebner — Wednesday, October 21, 2015

    When it comes to investing, we can identify many risks investors assume, either knowingly or not. At Index Fund Advisors, we see it as our core mission to get investors to take the risks that are worth taking (e.g. market, size, value, term and default) and avoid the ones that ...Read More

  • Advice That Adds Up During Down Markets

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    by Mark Hebner — Friday, October 16, 2015

    As recent global markets continue to test the patience of even some of the most stoic among us, how are you holding up? Are you finding it feasible (if not necessarily fun) to stick with your existing strategy, or have you been eying it with increasing suspicion of late? If ...Read More

  • The 3rd Quarter of 2015 in Review [VIDEO]

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    by Tom Allen and Mark Hebner — Thursday, October 15, 2015

    The 3rd Quarter of 2015 could pretty much be summed up by one word: red. We saw a lot of it, all over the world, among pretty much all asset classes. While Greece was dominating the headlines during the 2nd Quarter of this year, those stories of uncertainty migrated ...Read More

  • The Role of the Advisor in a Retirement Plan

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    by Tom Allen and Mark Hebner — Friday, October 9, 2015

    We recently came across an article from Employee Benefit News that highlighted the overall disconnect that participants in small companies have with their 401(k) plan. The author stated very clearly, “small market participants, in particular, have less access to support ...Read More

  • Unhealthy Attachments

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    by Jim Parker — Wednesday, October 7, 2015

    Have you ever made yourself suffer through a bad movie because, having paid for the ticket, you felt you had to get your money’s worth? Some people treat investment the same way. Behavioral economists have a name for this tendency of people and organizations to stick with ...Read More

  • Considering Central Bank Influence on Yields

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    by Dimensional Fund Advisors — Monday, October 5, 2015

    Many market participants presume that long-term interest rates will rise when a Fed tightening policy begins. However, history shows that short-term rates and long-term rates do not move in ...Read More

  • High Frequency Trading - Impact on Other Market Participants

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    by Tom Allen and Mark Hebner — Tuesday, September 29, 2015

    Without a doubt the global market structure has changed dramatically over the last decade. While many of our colleagues can remember the days of pit trading within the major stock exchanges, we now live in a world largely driven by computers. Using algorithms created by in-house ...Read More

  • A Focus on Fixed Income

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    by Mark Hebner — Monday, September 28, 2015

    Anyone who is keeping even a casual eye on financial headlines these days is aware that fixed income returns have been a moving target for a while now – at home and abroad. The general consensus is that rates will rise eventually. With almost nowhere to go but up, ...Read More

  • Goldman Sachs Enters "Smart Beta" World: Proceed With Caution

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    by Tom Allen and Mark Hebner — Wednesday, September 23, 2015

    There has been tremendous asset growth in exchange-traded funds (ETFs) over the last 5 years. According to the Investment Company Institute (ICI), net assets have grown from $777 billion at year-end 2009 to $1.974 trillion at year-end 2014 (250% total growth)[i]. Understandably, ...Read More

  • Mark Hebner

    RAFI ETFs: A Deeper Look at the Performance

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    by Mark Hebner — Friday, September 18, 2015

    For about the past ten years, there has been an on-going debate in the world of indexing centering around whether index funds should be weighted by capitalization (the traditional method) or by fundamental factors such as dividends, sales, book value, et al. Proponents of ...Read More

  • Should Investors Sell After a "Correction"?

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    by Weston Wellington — Thursday, September 17, 2015

    Stock prices in markets around the world fluctuated dramatically for the week ended August 27. On Monday, August 24, the Dow Jones Industrial Average fell 1,089 points—a larger loss than the “Flash Crash” in May 2010—before rallying to close down 588. ...Read More

  • Considering an Annuity? Understand Their Role BEFORE Committing

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    by Tom Allen — Tuesday, September 15, 2015

    Financial planning is very similar to performing a juggling act. We are constantly monitoring and maintaining many different parts of a client’s financial well-being. Investments, insurance, estate planning, charitable giving, all with an overlay of behavioral coaching may ...Read More

  • The Importance of the Employer Match - Putting the Cart Before the Horse

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    by Tom Allen and Mark Hebner — Friday, September 11, 2015

    Index Fund Advisors is a big fan of employer-sponsored retirement plans. Giving employees the opportunity to save for retirement by utilizing the incentives embedded in the U.S. Tax Code is of tremendous benefit to both the employee and the employer. We have written articles in ...Read More

  • IFA Report Access

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    by Mark Hebner — Thursday, September 10, 2015

    Index Fund Advisors has always put our clients first. Whether it comes to investment advice, overall wealth management, a dedicated service team, or technological solutions to help with financial planning, we are all about making our client experience the best in the world. ...Read More

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

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    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 one: A Random Walk Down Wall Street.” – New York Times If ...Read More

  • The Patience Principle

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    by Jim Parker — Friday, August 28, 2015

    Global markets are providing investors a rough ride at the moment, as the focus turns to China’s economic outlook. But while falling markets can be worrisome, maintaining a longer term perspective makes the volatility easier to handle. A typical response to unsettling ...Read More

  • When Times Are Turbulent – Invest and Relax

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    by Tom Allen and Mark Hebner — Tuesday, August 25, 2015

    No doubt the recent volatility in the market place has investors unnerved. Friends, family, neighbors, work colleagues, are all giving their opinion on where we stand and what will happen in the near ...Read More

  • Tom Allen and Mark Hebner

    Part 2: Fidelity Funds - A Deeper Look at the Performance

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    by Tom Allen and Mark Hebner — Friday, August 21, 2015

    We recently wrote an article that gave a high level overview of the performance of 64 different equity funds from Fidelity Investments. Our goal was to inform investors to be very careful when they hear “rumors” in the financial media about superior fund families. ...Read More

  • Tom Allen and Mark Hebner

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

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    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 from Money Magazine) to entice investors into hopping on board with a ...Read More

  • Do Behavioral Biases Lead to Profitable Investment Strategies?

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    by Tom Allen and Mark Hebner — Tuesday, August 11, 2015

    We recently came across a research paper that examined the performance of “behavioral mutual funds.” We put this term is quotations since it is hard to nail down exactly what type of investment strategy these types of mutual funds are implementing other than the fact ...Read More

  • Acting as a Trustee: Understanding What You Can and Cannot Do

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    by Tom Allen and Mark Hebner — Friday, August 7, 2015

    Most of us, either through personal experience or someone we know, have had to go through the experience of being a trustee. There may even be some of us out there who don’t even know that we were a trustee (anyone own a business with a 401(k) retirement plan?). ...Read More