- 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
re: COLONEL - YOUR ANSWER
Posted on 2/9/09 at 5:23 pm to amsterdam
Posted on 2/9/09 at 5:23 pm to amsterdam
So you can honestly tell me that you've always recommended what is best for the client, not for your commissions? I had an internship at a brokerage, and the new guys usually can't meet production unless they sell investments that most likely aren't in the best interests of the client....
2
Posted on 2/9/09 at 5:26 pm to amsterdam
20 years, maybe. But 10? there were a bunch of funds that looked great on a 10 year basis in 2000 that proceeded to blow up in a massive way.
I'm interested in seeing what the ones did that didn't seem to suffer from the tech boom but also took advantage of the 03-07 bubble.
I'm interested in seeing what the ones did that didn't seem to suffer from the tech boom but also took advantage of the 03-07 bubble.
Posted on 2/9/09 at 5:43 pm to Colonel Hapablap
Wow I totally missed this entire argument. My only deal is that I'd rather do the allocating myself, if part of that is weighted towards a managed portfolio to some degree, I don't have an issue with that.
Posted on 2/9/09 at 5:53 pm to GeneralLee
General,
I can honestly tell you that I always do whats in my clients best interest. There is no other way to operate in this business. Your reputation is everything. I strive very hard to build an honest and fair reputation
Further I always lay out the cost of every investment option as all brokers should (Im sure not all do). Your client respects you more for it and its the right thing to do
What you describe in your internship goes on a lot with new brokers. Its a tough business to crack. I agree that Alot of new guys are tempted to sell a higher commission product to stay afloat. In my experience those are the guys that dont pan out anyway and gets fired. If they have to resort to those means in the beginning they are not going to last
Worse, some dont understand the costs themselves
You should probably always use someone with a little experience. Also never be afraid to ask how your advisor makes his money
Repeat after me," Not every single broker is a dishonest and crooked..."
Check out my new thread on the topic
I can honestly tell you that I always do whats in my clients best interest. There is no other way to operate in this business. Your reputation is everything. I strive very hard to build an honest and fair reputation
Further I always lay out the cost of every investment option as all brokers should (Im sure not all do). Your client respects you more for it and its the right thing to do
What you describe in your internship goes on a lot with new brokers. Its a tough business to crack. I agree that Alot of new guys are tempted to sell a higher commission product to stay afloat. In my experience those are the guys that dont pan out anyway and gets fired. If they have to resort to those means in the beginning they are not going to last
Worse, some dont understand the costs themselves
You should probably always use someone with a little experience. Also never be afraid to ask how your advisor makes his money
Repeat after me," Not every single broker is a dishonest and crooked..."
Check out my new thread on the topic
Posted on 2/9/09 at 5:53 pm to amsterdam
What about that investing Guru Madoff? 
Posted on 2/9/09 at 6:07 pm to amsterdam
quote:
But I think its fair to say that if a fund as outperformed the market over 10,20,30 years
That is the point, they have not beaten the market. One would have to construct an identical index portfolio including size and factor loads directly comparable to CWGIX to truly compare and the odds are the index has as good or better results over extended periods. From a survivorship basis, AF is probably near the top as other fund companies have many funds that don't last 5 years and are rolled into another fund to hide poor performance to new investors.
If 401k plan participants can get AF's no load in their plan they are not a bad choice, but a retail investor outside of 401k's who spent time learning could construct a more efficient portfolio and avoid loads and high ER's. It would be like asking a home buyer whether they wanted a 5.25% or 6% thirty year mortgage, who wants the drag of higher costs if they can be minimized while maintaining performance? Then again, some people are too lazy or totally disinterested in financial matters and might be better off using fee only planners or a broker.
I don't mean to color you with the bad end of the stick with the commentary, simply saying the funds provided for comparison are not worth the time due to the disparate holdings.
This post was edited on 2/9/09 at 6:10 pm
Posted on 2/9/09 at 6:08 pm to tirebiter
quote:
That is the point, they have not beaten the market. One would have to construct an identical index portfolio including size and factor loads directly comparable to CWGIX to truly compare and the odds are the index has as good or better results over extended periods. From a survivorship basis, AF is probably near the top as other fund companies have many funds that don't last 5 years and are rolled into another fund to hide poor performance to new investors.
Create a managed fund to outperform a managed fund. GENIUS
Posted on 2/9/09 at 6:19 pm to T Ba Doe Tiger
If you want a direct comparison and backtest to compare the results that's what it would take. Doesn't take a rocket scientist to research which equity asset classes have outperformed over time and tilt to those sectors. That's why I laugh when everyone wants to point to the 500 as a basis of the aggregate market or, more importantly, individual investor returns.
Broker on, I have said my piece and will go back to my grunt work.
Broker on, I have said my piece and will go back to my grunt work.
Posted on 2/9/09 at 7:43 pm to T Ba Doe Tiger
quote:
So we agree to convene again in feb 2019?
My point of view exactly. Given that there are many times more actively managed than index funds, it is virtually impossible that the best index fund will beat the best actively managed fund *in hindsight*. If you choose from a universe of a couple of hundred, versus another choice from a universe of several thousand, and on average they're all fairly close, then it is virtually impossible for the overall winner to come from the first group.
The test is to pick an actively managed fund today and stick with it for ten years. I will side with the indexes for that one. The reason is that the value of information is essentially zero, so the value of active management is as well.
Posted on 2/9/09 at 7:49 pm to foshizzle
sometimes when I post with you guys it feels like when Peter fights the giant chicken
Posted on 2/9/09 at 8:21 pm to foshizzle
quote:
My point of view exactly. Given that there are many times more actively managed than index funds, it is virtually impossible that the best index fund will beat the best actively managed fund *in hindsight*. If you choose from a universe of a couple of hundred, versus another choice from a universe of several thousand, and on average they're all fairly close, then it is virtually impossible for the overall winner to come from the first group.
The test is to pick an actively managed fund today and stick with it for ten years. I will side with the indexes for that one. The reason is that the value of information is essentially zero, so the value of active management is as well.
Look I am trying to be objective. Would you settle if a fund beat the index on rolling 10 yr periods a majority of the time?
Posted on 2/9/09 at 10:29 pm to amsterdam
Is this a joke? If you are looking back in time, of course you can find some particular mutual fund that beat the Vanduard Total Stock, or the Vanguard 500, or any other index fund. The point is that looking forward, your chances of doing so decrease dramatically.
Posted on 2/10/09 at 7:32 am to Zilla
Look I say this all the time. All mutual funds are designed to beat the index. The overwhelming majority do not.
What Im getting at, and if you do the research, you will find that... the funds that beat the index in the past are usually coming from the Same group of funds, and point to being able to do so in the future.
Likewise, the funds that get trounced by the index are again... the same group of losing funds that have been beat by them in the past.
A majority of the funds I posted have beat their index a majority of the time periods since inception.
Now of course you will have exceptions, but this statement you will find to be generally true
What Im getting at, and if you do the research, you will find that... the funds that beat the index in the past are usually coming from the Same group of funds, and point to being able to do so in the future.
Likewise, the funds that get trounced by the index are again... the same group of losing funds that have been beat by them in the past.
A majority of the funds I posted have beat their index a majority of the time periods since inception.
Now of course you will have exceptions, but this statement you will find to be generally true
Posted on 2/10/09 at 8:57 am to amsterdam
AMECX - This fund is down 20% since Jan 2000. I'm not understanding where your numbers are coming from?
In Jan 2000 it was priced at 15.76
At end of Jan 2009 it was priced at 12.23
In Jan 2000 it was priced at 15.76
At end of Jan 2009 it was priced at 12.23
Posted on 2/10/09 at 9:43 am to T Ba Doe Tiger
quote:
Look I am trying to be objective. Would you settle if a fund beat the index on rolling 10 yr periods a majority of the time?
You are still missing the overwhelming point. If the active fund is allowed to invest in other sectors beyond the target index it has more opportunities to gain. An open minded person views this as what it is. If the active manager was limited to pick stocks from only the subset equities contained in say the 500, it would be worth comparing manager skill, luck, and alpha generated if any, compared to a static index allocation.
You brokers still fail to understand that investors using index/ETF securities use multiple indexes to construct a domestic or global portfolio, ie Total domestic, total international, small cap domestic, small international, emerging markets, fixed income, commodities, etc. They don't buy one index fund and that's their entire portfolio holding, although with Vanguards new all world you just about could do it with one equity fund.
Therefore index investors don't need one actively managed fund, no matter whether it beats the total domestic market or 500 index in your limited way of thinking. I am saving over $7k a year using ETF's and indexes compared to actively managed fund costs, the savings adds up quickly, and indexes are inherently easier to use to set and maintain portfolio allocations.
I recall short term gurus at Putnam and Janus with hot funds that blew up years ago and never regained any type of positive track record. For years people have talked about how good Dodge and Cox is, shite their balanced fund took a beating last year, it is laughable that a balanced fund could lose almost 34% in 2008 (and was down over 44% at one point) when most direct competitors lost 17%-24%.
Posted on 2/10/09 at 4:07 pm to tirebiter
If you put all those American Funds into one Portfolio you will have about 35-40% overlap in stocks, so you will not be nearly as diversified as you think, see Edward Jones investing. 85% of money managers did not beat their indexes last year.
Posted on 2/10/09 at 4:27 pm to amsterdam
quote:
What Im getting at, and if you do the research, you will find that... the funds that beat the index in the past are usually coming from the Same group of funds, and point to being able to do so in the future.
bullshite. Absolute, unadulterated 100% total bullshite.
Posted on 2/10/09 at 4:30 pm to ewilliams20
quote:
Is this a joke? If you are looking back in time, of course you can find some particular mutual fund that beat the Vanduard Total Stock, or the Vanguard 500, or any other index fund. The point is that looking forward, your chances of doing so decrease dramatically.
My thoughts exactly. I still don't even understand what the argument is. Can you find out results, and then go back with the benefit of hindsight and pick out the lucky funds? Sure you could. Chimps could even do that. Can you make any sort of positive prediction about the future or expect any sort of persistent outperformance? Of course you cannot. And you are a dishonest charlatan if you are claiming that you can.
Posted on 2/10/09 at 4:36 pm to Tiger JJ
quote:
bullshite. Absolute, unadulterated 100% total bullshite.
Jersey its not BS. Some money managers do a better job of managing money. They have a process being used to ensure better than market returns MOST, but admittedly not all the time.
I am constantly being told on here to back what I say. Now its your turn. If you think this is B.S. then back it up.
Its easy to cry BS, but I know for a fact Im right when you look at trailing 10 year returns or longer
Page 2 of 7
Back to top
Follow TigerDroppings for LSU Football News