- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
COLONEL - YOUR ANSWER
Posted on 2/9/09 at 4:18 pm
Posted on 2/9/09 at 4:18 pm
Before I reveal my answer to your index fund there are a few things I want to make clear:
1. The funds below are not a recommendation to anyone. You should invest based on your own financial goals, not what you read on a message board.
2. This is for comparision only, again I am not recommending this for anyone specifically.
3. This will hopefully show the index fund agruments weakness, and is intended to show how important active management is.
4. Investing in an index in my opinion is like running an offense without a quaterback. Just because you can do it, doesnt make it a good idea.
5. I am not a load fund homer. I have defended them on this site b/c they were being unfairly portrayed. I use no load funds more than you probably think, including one below
6. My favorite is T. Rowe...not a recommendation
7. I honestly didnt want to do this challenge. I do not think its fair to the colonel
8. Even after seeing my numbers, you index guys are going to claim that yours has lower risk/fees/whatever, so I gave you plenty of funds to look over
9. As I have said before, I think this should be about the bottom line. How much money did you make. period. Thats why your investing in the first place.
10. Most people would gladly pay more fees to make more money. Its called spending money to make money
11. Index funds always get trounced during bear markets...mainly b/c there is no active management
12. I ran these hypo's over a ten year period for several reasons. Most importantly b/c mutual funds are designed to be long term investments.
13. Most people here have more than ten years left to invest in their life so it shouldnt be a problem.
14.I hope in some small way, that this might show you guys that financial professionals might just have a clue when it comes to this stuff.
15. Colonel I promised you 3 funds, but to illustrate my point I included 12. The first 12 I looked at, there was no cherry picking b/c it wasnt needed. I could probably give you a hundred if I had a mind to.
The Results:
We had agreed to an investment amount of 100,000 net of fees's.
The ten year period was from 01/31/99 - 01/31/2009
I reinvested all dividends and capital gains
Colonel said I could pick from the known universe of funds
The Colonel picked VITSX - Vangaurd Total Stock Market Index
$100,000 in '99 to...
$83,807 in '09
My Picks - NOT A RECOMMENDATION!!!
1. CAIBX - Capital Income Builder
$100,000 in '99 to...
$148,869 in '09
2. CWGIX - Capital World Growth and Income
$100,000 in '99 to...
$161,494 in '09
3. AGHTX - Growth fund of America (T ba doe choice)
$100,000 in '99 to...
$115,514 in '09
4. AMECX - Income Fund of America
$100,000 in '99 to...
$131,763 in '09
Just so you dont think Im a one note song and all American Funds...
5. MALOX - Blackrock Global Allocation
$100,000 in '99 to...
$232,639 in '09
6. KAUAX - Kaufmann Fund
$100,000 in '99 to...
$155,574 in '09
7. FKINX - Franklin Income Fund
$100,000 in '99 to...
$149,068 in '09
8. ITHAX - Hartford Capital Appreciation
$100,000 in '99 to...
$148,614 in '09
9. IHGIX - Hartford Dividend and Growth
$100,000 in '99 to...
$109,325 in '09
10. JMIVX - Perkins Mid Cap Value
$100,000 in '99 to...
$251,862 in '09
11. TESIX - Franklin Mutual Shares
$100,000 in '99 to...
$129,179 in '09
12. ACEIX - Van Kampen Equity and Income
$100,000 in '99 to...
$137,397 in '09
It is important to note that the initial fees to get in my picks ranged from 0 to $3500.
A small price to pay for the results
The index fund costs next to nothing to own. But then again... you get what you pay for.
Over the last ten years it cost you almost 17k to be in that Vangaurd fund.
All my picks recovered their initial costs and then some.
Colonel, the ball is in your court
1. The funds below are not a recommendation to anyone. You should invest based on your own financial goals, not what you read on a message board.
2. This is for comparision only, again I am not recommending this for anyone specifically.
3. This will hopefully show the index fund agruments weakness, and is intended to show how important active management is.
4. Investing in an index in my opinion is like running an offense without a quaterback. Just because you can do it, doesnt make it a good idea.
5. I am not a load fund homer. I have defended them on this site b/c they were being unfairly portrayed. I use no load funds more than you probably think, including one below
6. My favorite is T. Rowe...not a recommendation
7. I honestly didnt want to do this challenge. I do not think its fair to the colonel
8. Even after seeing my numbers, you index guys are going to claim that yours has lower risk/fees/whatever, so I gave you plenty of funds to look over
9. As I have said before, I think this should be about the bottom line. How much money did you make. period. Thats why your investing in the first place.
10. Most people would gladly pay more fees to make more money. Its called spending money to make money
11. Index funds always get trounced during bear markets...mainly b/c there is no active management
12. I ran these hypo's over a ten year period for several reasons. Most importantly b/c mutual funds are designed to be long term investments.
13. Most people here have more than ten years left to invest in their life so it shouldnt be a problem.
14.I hope in some small way, that this might show you guys that financial professionals might just have a clue when it comes to this stuff.
15. Colonel I promised you 3 funds, but to illustrate my point I included 12. The first 12 I looked at, there was no cherry picking b/c it wasnt needed. I could probably give you a hundred if I had a mind to.
The Results:
We had agreed to an investment amount of 100,000 net of fees's.
The ten year period was from 01/31/99 - 01/31/2009
I reinvested all dividends and capital gains
Colonel said I could pick from the known universe of funds
The Colonel picked VITSX - Vangaurd Total Stock Market Index
$100,000 in '99 to...
$83,807 in '09
My Picks - NOT A RECOMMENDATION!!!
1. CAIBX - Capital Income Builder
$100,000 in '99 to...
$148,869 in '09
2. CWGIX - Capital World Growth and Income
$100,000 in '99 to...
$161,494 in '09
3. AGHTX - Growth fund of America (T ba doe choice)
$100,000 in '99 to...
$115,514 in '09
4. AMECX - Income Fund of America
$100,000 in '99 to...
$131,763 in '09
Just so you dont think Im a one note song and all American Funds...
5. MALOX - Blackrock Global Allocation
$100,000 in '99 to...
$232,639 in '09
6. KAUAX - Kaufmann Fund
$100,000 in '99 to...
$155,574 in '09
7. FKINX - Franklin Income Fund
$100,000 in '99 to...
$149,068 in '09
8. ITHAX - Hartford Capital Appreciation
$100,000 in '99 to...
$148,614 in '09
9. IHGIX - Hartford Dividend and Growth
$100,000 in '99 to...
$109,325 in '09
10. JMIVX - Perkins Mid Cap Value
$100,000 in '99 to...
$251,862 in '09
11. TESIX - Franklin Mutual Shares
$100,000 in '99 to...
$129,179 in '09
12. ACEIX - Van Kampen Equity and Income
$100,000 in '99 to...
$137,397 in '09
It is important to note that the initial fees to get in my picks ranged from 0 to $3500.
A small price to pay for the results
The index fund costs next to nothing to own. But then again... you get what you pay for.
Over the last ten years it cost you almost 17k to be in that Vangaurd fund.
All my picks recovered their initial costs and then some.
Colonel, the ball is in your court
5
Posted on 2/9/09 at 4:22 pm to amsterdam
before I dig into these, have you already taken out management fees and sales loads, or do I need to do that?
Posted on 2/9/09 at 4:26 pm to Colonel Hapablap
already done, the returns are net of all fees
This post was edited on 2/9/09 at 4:27 pm
Posted on 2/9/09 at 4:32 pm to amsterdam
Well 1999 is quite the year to pick considering that the Col. had an equity-only fund. I mean, February 1999 was pretty much the high-water mark of the tech bubble. Any equity fund is going to get slaughtered.
Second, it's pretty fricking easy to pick a successful fund going backwards, isn't it? I thought the point here was to measure the performance going forwards?
Second, it's pretty fricking easy to pick a successful fund going backwards, isn't it? I thought the point here was to measure the performance going forwards?
Posted on 2/9/09 at 4:37 pm to Cold Cous Cous
I'll analyze them tonight. Interesting that most of them are E&I funds, and not straight equities tho.
This post was edited on 2/9/09 at 4:42 pm
Posted on 2/9/09 at 4:40 pm to Cold Cous Cous
quote:
Second, it's pretty fricking easy to pick a successful fund going backwards, isn't it? I thought the point here was to measure the performance going forwards?
So we agree to convene again in feb 2019?
Posted on 2/9/09 at 4:42 pm to T Ba Doe Tiger
quote:
So we agree to convene again in feb 2019?
We'll meet at my place. By then, I plan on owning a tropical island. Like Cuba.
Posted on 2/9/09 at 4:43 pm to amsterdam
I don't think it's fair that you include growth and income funds... they might have had a good chunk in bonds, a total different asset class than VITSX is designed to track. It should be 100% equity/cash funds vs. VTSMX. If we just looked at the past 10 years and you could pick between asset classes, just holding cash under your mattress would beat VITSX. Is that true over longer term periods than 10 years? nope.
There should be very few actively managed equity funds that beat index funds after fees and expenses are considered.
There should be very few actively managed equity funds that beat index funds after fees and expenses are considered.
This post was edited on 2/9/09 at 4:46 pm
Posted on 2/9/09 at 4:45 pm to GeneralLee
I told him anything was ok, so anything is ok. If y'all want to have seperate pissing matches, go ahead. This one is VTSMX against anything.
Posted on 2/9/09 at 4:46 pm to Colonel Hapablap
quote:
I told him anything was ok, so anything is ok. If y'all want to have seperate pissing matches, go ahead. This one is VTSMX against anything.
Well i guess we should look at AGTHX vs. VTSMX over longer term periods than 10 years.
Posted on 2/9/09 at 4:47 pm to T Ba Doe Tiger
quote:Pfft. By 2019 I expect to be holed up in the WPC herding mini-cows and shooting trespassers on sight.
So we agree to convene again in feb 2019?
Posted on 2/9/09 at 4:48 pm to Cold Cous Cous
None of us will make it past Dec. 21, 2012 anyways.
Posted on 2/9/09 at 4:51 pm to Colonel Hapablap
I hope you read my last comment on the other thread, exactly what I knew would happen comparing apples to oranges. If someone was constructing a portfolio with index funds and wanted "X" percent domestic broad market then they would buy "X" Total Market. If they want to overweight small, large, value, growth, international, etc it's easy to do with index funds. If they then wanted "X" fixed income be it Treasuries, investment grade corporates, GNMA, TIPs, CD's, whatever, they would buy "X" percent fixed income indices to match and not have to decipher what the active funds contain and makes maintaining constant exposure much more efficient. Same for other asset classes. You end up with exactly the equity/fixed income/cash/and or alternative asset exposure you seek, not buying a lot of actively managed funds that are all over the investing spectrum.
How is comparing a Blackrock tactical global asset allocation fund to the US total equity market a direct comparison? CWGIX? CAIBX? Any of the others?
And amsterdam, last I read, 86% of index funds beat corresponding active management in 2008.
How is comparing a Blackrock tactical global asset allocation fund to the US total equity market a direct comparison? CWGIX? CAIBX? Any of the others?
And amsterdam, last I read, 86% of index funds beat corresponding active management in 2008.
Posted on 2/9/09 at 4:53 pm to amsterdam
quote:
Investing in an index in my opinion is like running an offense without a quaterback. Just because you can do it, doesnt make it a good idea.
Most actively managed funds have someone like Jarrett Lee at QB..
This post was edited on 2/9/09 at 4:54 pm
Posted on 2/9/09 at 4:55 pm to tirebiter
understood, but the counterpoint could be made that joe 6-pack has no idea how he ought to be allocating across all of those asset classes. If active management does it successfully, then maybe it's worth the fees.
I'm getting some odd errors bringing up some of these tho, and on a longer time frame (back to like 1992) about half of them underperform. Hopefully I'll have time to dig in a little more tonight.
ETA: also, 2 of them didn't go back to 1999, and a couple of others only went back to 1997. I have a hard time saying a fund that's only existed for 13 years has a "long term track record".
I'm getting some odd errors bringing up some of these tho, and on a longer time frame (back to like 1992) about half of them underperform. Hopefully I'll have time to dig in a little more tonight.
ETA: also, 2 of them didn't go back to 1999, and a couple of others only went back to 1997. I have a hard time saying a fund that's only existed for 13 years has a "long term track record".
This post was edited on 2/9/09 at 4:57 pm
Posted on 2/9/09 at 4:57 pm to GeneralLee
Wow, amsterdam assumes the investor is incompetent to realize what he is investing in and the advisor and fund managers are compentent and capable of beating the market over long periods of time, quite a charade. No thanks.
Posted on 2/9/09 at 5:03 pm to tirebiter
Just about the only financial advisors you can trust are those that charge you an hourly fee for their advice. Otherwise, they will slide you towards horrible investments like variable annuities where they rack up major commission $$.
Posted on 2/9/09 at 5:07 pm to GeneralLee
I prefer something like the 2/20 model, but I don't think that's legal for peons.
Posted on 2/9/09 at 5:21 pm to Colonel Hapablap
Had a feeling I would see these reactions.
First off the criteria I used was agreed on before hand.
Second I used equity and income funds b/c I was of the understanding I could pick from any funds
I tried to use funds that had at least a ten year number. Must of missed a few. Like I said those were the first twelve that came to mind
As for performance going forward...who knows what thats going to be, no one does
But I think its fair to say that if a fund as outperformed the market over 10,20,30 years or longer then they will probably continue to do so. There is a process involved with these returns. but then again, no garuantees
First off the criteria I used was agreed on before hand.
Second I used equity and income funds b/c I was of the understanding I could pick from any funds
I tried to use funds that had at least a ten year number. Must of missed a few. Like I said those were the first twelve that came to mind
As for performance going forward...who knows what thats going to be, no one does
But I think its fair to say that if a fund as outperformed the market over 10,20,30 years or longer then they will probably continue to do so. There is a process involved with these returns. but then again, no garuantees
Posted on 2/9/09 at 5:23 pm to amsterdam
quote:
As for performance going forward...who knows what thats going to be, no one does
Page 1 of 7
Popular
Back to top
Follow TigerDroppings for LSU Football News