UnThreaded | Threaded | Whole Thread (27) | Ignore Thread Prev | Next
Author: brwhiz Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75402  
Subject: Re: How low do I let it go? Date: 6/15/2002 5:39 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Sorry, I missed a category of investor for whom index funds might be a good bet.

How about EVERYONE??


Sorry, they aren't a good bet for EVERYONE. Anyone with enough intelligence to use the tools available to them can pick funds and stocks that CONSISTENTLY beat the S&P 500. Anyone who believes that ANY index fund is the BEST that you can do deserves the mediocre returns that their money is providing.

To repeat my original point, index funds are OK for some categories of investors, and those categories have been pretty clearly spelled out. The rest of us (and I know that I'm just one of thousands) are doing much better than the results obtainable by blindly following the roller coaster of an index fund.

As far as getting a fund added by your plan administrator, it is the fiducial responsibility of plan administrators to serve the members of the plan. I have been able to get 2 funds added to our 403(b) plan already and 3 others are on request and under evaluation by the administrator. If you DON'T ASK I can pretty much guarantee it WON'T HAPPEN.

I failed to mention that the 18 funds that return better than 20% CONSISTENTLY were selected from a universe of only 5977 funds that excluded specialty, sector, bond, or international funds so the percentage of funds that have CONSISTENTLE done this is actually 0.3%. I did make one mistake in my statement. I said the results were over 1, 3, and 5 years when actually they were YTD, 1 year, and 3 years. Many of these 18 funds don't have a 5 year history. A recent statistical evaluation of funds found that future performance of a fund only has significant correlation with the previous years results. Beyond that the correlation is pretty insignificant. It also found little correlation with manager's tenure.

There are, of course, those who are so completely biased toward index funds that no argument will make a dent in their reasoning. Those people have all the right in the world to keep investing in a way that satisfies them. But they have no right to attempt to negatively influence those who want to learn more about alternatives, when those attempts involve distortions and exageration in a misguided attempt to prove a point. These have no place in a learning environment.

You don't have to pick the rare stock that returns over 2100% to realize returns in excess of 20% CONSISTENTLY, although it is nice to get in on one of the skyrockets at the bootom of its climb. There are hundreds of stocks that give such results, and I am glad to own a portfolio of them. Is it as easy as blindly picking an index stock? No way!! I expend hours in research before investing in a company and then I keep an eagle eye on all my holdings to forstall any major losses. I sometimes make mistakes and lose some money, but never very much. And I occasionally miss out on a real winner that does a head fake downward before starting a rapid upward climb. But I learn from my mistakes and constantly try to improve my investing skills and the returns that I am getting. I have an open mind toward anyone else's opinion, rationally presented. But I reserve the right to determine the validity of that opinion with respect toward my own investing decisions.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (27) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
TMFDeej's CAPS Blog

Name of the Game: Tax Avoidance
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement