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Author: joelxwil Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75700  
Subject: Keeping Customers Date: 9/18/2008 9:17 AM
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http://biz.yahoo.com/usnews/080916/16_vanguard_ceo_index_inv...

Rationalizations to keep customers long their funds, when the smart ones sold some time ago.

Ten years is no longer long term - you have to look longer:

markets tend to revert to their long-term averages. But how you think about long term, I think, has to be stretched further. And that really leads you to, I think, by far the most important thing: the power of diversification. I'm looking at 10-year numbers for stocks--[which have returned] roughly 4.5 percent .... Think about every period for last 25 years that we've gone through and how much better the diversified investor is than somebody who had all of his or her eggs in one asset class ....

Sure, diversification is wonderful. The most diverse fund ever, VTSMX, is up 3.86% annualized with distributions re-invested over the last 10 years. That is a whopping 0.33% better than their money market fund.

OK: 10 years is no longer "long term". And what is the difinition of "is"? Should we work on that too?
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Author: ejonesx One star, 50 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63873 of 75700
Subject: Re: Keeping Customers Date: 9/18/2008 6:17 PM
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Sure, diversification is wonderful. The most diverse fund ever, VTSMX, is up 3.86% annualized with distributions re-invested over the last 10 years. That is a whopping 0.33% better than their money market fund.

OK: 10 years is no longer "long term". And what is the difinition of "is"? Should we work on that too?


I'm probably not going to do the math myself, but I am curious. What would the annualized return have been if over those 10 years one had invested an equal amount monthly? Anyone have the time to figure that one out?

My long term investing plan includes investing regularly.

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Author: joelxwil Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63874 of 75700
Subject: Re: Keeping Customers Date: 9/18/2008 7:07 PM
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I did that once for something else, and it is a bit tedious, so I won't do it again.

Download the adjusted close figures from Yahoo into a spread sheet. From that you can make the calculation you need. You can see your return for each period, and your total return since inception.

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