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How to incorporate both active/passive management?
Posted on 7/17/13 at 7:56 pm
Posted on 7/17/13 at 7:56 pm
For the record: I am caught in between both active and passive management. Therefore, I blend my portfolio with both, focusing a majority towards active.
Right now, I have my large cap investments through load waived, A share MFs. I use ETFs for my small/mid-cap exposure as well as some of my INTL expsoure (I use OAKIX as a fair amount of INTL)
How do you choose what to employ as active and passive management?
Please save the individual stock strategies for someone who is willing to put in the REAL work in finding good companies and keeping up with them. Just wait for those bear markets to humble yourselves.
Right now, I have my large cap investments through load waived, A share MFs. I use ETFs for my small/mid-cap exposure as well as some of my INTL expsoure (I use OAKIX as a fair amount of INTL)
How do you choose what to employ as active and passive management?
Please save the individual stock strategies for someone who is willing to put in the REAL work in finding good companies and keeping up with them. Just wait for those bear markets to humble yourselves.
3
Posted on 7/17/13 at 8:13 pm to Cmlsu5618
I tend to active manage my small/mid cap growth stocks and passive manage the large caps.
Posted on 7/17/13 at 8:17 pm to Volvagia
quote:
Volvagia
Next?
Posted on 7/17/13 at 9:18 pm to Cmlsu5618
IMO, you are over thinking it.
Just decide what you want your asset allocation to be and go from there. Asset allocation is really all that matters anyway.
If you're dead set on "diversifying" between active and passive, merely take 50% of each asset class into active and 50% of each asset class into passive. That is the simplest most straight-forward way to do it.
No offense meant (just in case you don't know), but these are the asset classes:
-large cap growth/value
-mid cap growth/value
-small cap
-international
-bonds
-real estate
-commodities
Just decide what you want your asset allocation to be and go from there. Asset allocation is really all that matters anyway.
If you're dead set on "diversifying" between active and passive, merely take 50% of each asset class into active and 50% of each asset class into passive. That is the simplest most straight-forward way to do it.
No offense meant (just in case you don't know), but these are the asset classes:
-large cap growth/value
-mid cap growth/value
-small cap
-international
-bonds
-real estate
-commodities
This post was edited on 7/17/13 at 9:20 pm
Posted on 7/17/13 at 9:52 pm to JPLSU1981
I don't necessarily see it as over thinking it, but just trying to use a logical process for an easy way to contribute.
I plan to roll with an allocation of all equity in my IRAs for a while until I build a certain value. I want to have a preset method for contributions so that I don't have to determine where to drop into, I focus more on things like rebalancing and funding the bastards.
I think there are interesting ways to think about active vs passive. I'd feel safe to say that, on the long run, the average American based active managers are more likely to get things right when investing here at home vs. abroad, and I'd be willing to take the index returns of whatever developed and emerging equity ETFs I get into.
The lack of a real plan is a healthy part of the reason the average investor can't beat an index.
I plan to roll with an allocation of all equity in my IRAs for a while until I build a certain value. I want to have a preset method for contributions so that I don't have to determine where to drop into, I focus more on things like rebalancing and funding the bastards.
I think there are interesting ways to think about active vs passive. I'd feel safe to say that, on the long run, the average American based active managers are more likely to get things right when investing here at home vs. abroad, and I'd be willing to take the index returns of whatever developed and emerging equity ETFs I get into.
The lack of a real plan is a healthy part of the reason the average investor can't beat an index.
Posted on 7/18/13 at 11:58 am to Cmlsu5618
quote:
For the record: I am caught in between both active and passive management. Therefore, I blend my portfolio with both, focusing a majority towards active. Right now, I have my large cap investments through load waived, A share MFs. I use ETFs for my small/mid-cap exposure as well as some of my INTL expsoure (I use OAKIX as a fair amount of INTL) How do you choose what to employ as active and passive management? Please save the individual stock strategies for someone who is willing to put in the REAL work in finding good companies and keeping up with them. Just wait for those bear markets to humble yourselves.
I prefer active management on the Bond side. I want a manager buying individual bonds that are mindful of impairments and other risks ESPECIALLY in the high yield space.
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