Not exact matches
«If you invested in a very low - cost
index fund — where you don't put the money in at one
time, but average in over 10 years — you'll do better
than 90 percent of people who start investing at the same
time,» Buffett said at the 2004 Berkshire Hathaway annual meeting.
More
than just tempering Gross's anti-equity remarks, the longtime advocate of buying and holding equity - based
index funds and ETFs went so far as to say that «equities today are more attractive relative to bonds
than at any other
time in history.»
The gist of these studies is this: Over
time, investors who buy and hold long - term investments, and specifically low - cost
index funds, earn more money
than investors chasing the latest investment trend.
According to the complaint, an
index fund - based suite of target - date
funds offered by Fidelity Investments yielded, on average, more
than 4.5
times the returns of the suite of Intel TDPs.
As a result, actively managed
fund are seven and a half
times (on average) more costly
than index funds.
Mutual
funds have much higher management fees
than index funds and almost always will make you less money over longer periods of
time.
The most popular basket commodities
fund, the PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), has over $ 7 billion in assets under management — more than three times the assets of the iPath Dow Jones - UBS Commodity Total Return ETN (NYSEArca: DJP) and nearly six times the assets of the iShares S&P GSCI Commodity - Indexed Trust (NYSEArca: G
fund, the PowerShares DB Commodity
Index Tracking
Fund (NYSEArca: DBC), has over $ 7 billion in assets under management — more than three times the assets of the iPath Dow Jones - UBS Commodity Total Return ETN (NYSEArca: DJP) and nearly six times the assets of the iShares S&P GSCI Commodity - Indexed Trust (NYSEArca: G
Fund (NYSEArca: DBC), has over $ 7 billion in assets under management — more
than three
times the assets of the iPath Dow Jones - UBS Commodity Total Return ETN (NYSEArca: DJP) and nearly six
times the assets of the iShares S&P GSCI Commodity -
Indexed Trust (NYSEArca: GSG).
«But we're providing more of a managed - account product
than a classic
index -
fund product,» he said in a MarketWatch.com story at the
time.
Rather
than trying to
time the market or pick the right stock, Bernstein said, it makes more sense to put your money in boring, plain vanilla
index mutual
funds and ETFs.
A mutual
fund /
index fund likely has many
times more risk
than a simple guaranteed interest - earning investment.
An extremely overdiversified active
fund manager is called a closet indexer: he or she holds a portfolio that closely resembles the benchmark, while charging fees that can be 20
times higher
than an
index fund.
As long as we are not frequently buying and selling to try and
time the market, our turnover can remain as low, if not lower
than an
index fund.
How many
times have you been to a gathering where someone bragged that they're paying less
than 0.20 % for a total stock market
index fund?
This explains a good deal of the secret sauce of
index funds — the average actively managed
fund has an expense ratio 10 to 15
times higher
than that of a comparable
index fund.
The Prosper loans take a lot of
time to select and manage — at least more
than index funds do.
While he trails the Vanguard
fund above half the
time, the magnitude of his «wins» over the
index fund is far greater
than the size of his losses.
Yet while
index mutual
funds owned the same stocks in the same proportions as their ETF counterparts, what ETFs offered was the ability to trade those
fund shares in real
time on stock exchanges, rather
than having to wait until the end of the day to buy or sell.
Because the assets tracking cap - weighted
indexes are so much greater
than those tracking fundamental - weighted
indexes ($ 7 trillion vs. approximately $ 100 billion), the market impact model predicts that the costs of cap - weighted
index investing would be substantially greater, in fact, roughly 25
times greater,
than those of fundamental - weighted
index funds.
The Large Cap
Fund normally invests at least 80 % of its net assets in equity securities, consisting of domestic common and preferred stocks of large capitalization («large - cap») companies — a company, at
time of purchase by the
Fund, with a market capitalization greater
than or equal to the lesser of $ 10 billion or the median market capitalization of companies in the S&P 500
Index.
If one of the greatest investors of all
time, Warren Buffett suggests people go for low cost
index funds... then chances are that's better advice to follow
than the advice of some guy trying to sell you high fee mutual
funds.
You don't even need complicated science to conclude that investing in low - cost
index funds is almost certain to generate higher long - term returns
than investing in high - cost actively - managed mutual
funds (where the managers try to beat the market by stock selection or market
timing).
I am learning to like the stock market, although I was only limiting my investments to
index funds for a long
time, as I didn't want to take the
time to research investments well enough to make investing something other
than a casino gamble.
I've several
times repeated my advice on investing in individual stocks: do it if you enjoy it, but don't expect to do better
than index funds over the long haul.
Do - it - yourself individual investors buying individual securities rather
than investment
funds demonstrably under - perform passive
index fund benchmarks — especially as the
time period increases.
In other words, after two volatile days — up 10 % one day, down 10 % the next — your losses are four
times greater
than the losses incurred by an investor in an ordinary
index fund (he lost $ 1; you've lost $ 4).
The safest, most reliable way to ensure good returns over
time is to try to match the market returns — through low - cost
index funds — rather
than attempting to beat the market.
For large one -
time purchases (as opposed to smaller monthly purchases), I really like ETFs due to their slightly lower expense ratios
than traditional open - end
index funds.
This is particularly true for large investors such as the Principal CITs (which at all relevant
times had over $ 2 billion invested in
index fund investments), that can leverage their billions in investable assets to negotiate lower fees
than what is available to the vast majority of investors.
As we've covered in the past, actively managed stock portfolios where «experts» try to
time the ups and downs of individual stocks get lower returns
than passive
index funds.
Mutual
funds are 6 -10
times more expensive
than ETFs because they hire pros who try to select a few stocks within the
index that will «beat» it.
For many of us, it is best buy a low cost
index fund and stick with it through good and tough
times (something that 401k plans are designed to do better
than a brokerage account).
Another option for low cost
index funds is Altimera — last
time I checked they had a Precision series which had mers of less
than 1 % — You will pay a bit more in mer but I'm positive they can handle the extra grants.
Stock
funds average expenses are.90 %, considerably higher
than indexed funds and if you buy
funds with front end loads you could pay as high as 5 % or more just for this one
time charge.
The Vanguard Total Stock Market
Index Admiral
fund, a fund that simply invests in the broad US stock market, has an expense ratio of 0.05 %, almost four times less than the Target F
fund, a
fund that simply invests in the broad US stock market, has an expense ratio of 0.05 %, almost four times less than the Target F
fund that simply invests in the broad US stock market, has an expense ratio of 0.05 %, almost four
times less
than the Target
FundFund.
I would contend that it would take more
time to do due diligence on
funds than it does on broad based
index ETFs (or low cost
index funds).
Indexed funds typically have the lowest management fees and in the private sector they average.15 % or $ 1.50 per $ 1,000 invested according to a recent article in Money Magazine; five
times more
than what the TSP charges.
Some of those retail mutual
funds that are trying to
time the market will have a higher cost
than, say, a lot of
index funds, and ETFs, which are basically buying just an
index, if you will, and not really trying to buy and sell to
time the market.
In fact, a recent Fidelity survey found that many investors think
index funds, which attempt to match a market benchmark like the S&P 500 (before fees), are less risky
than active
funds, which attempt to outperform a benchmark.1 That may help explain why during 11 weeks of heightened market volatility in 2015, investors bought
index funds but sold active
funds at seven
times the average rate during nonvolatile weeks.2
I began saving in 2001 and I've done better
than that with mutual
fund /
index fund investing through my employer's
funds for most of that
time.
Because short - term capital gains are taxed at your ordinary income tax rate (as opposed to long - term capital gains, which are currently taxed at a maximum rate of 20 %), you'll end up paying more taxes with actively managed
funds than you would with
index funds, which typically hold their investments for longer periods of
time.
Editorially, Kiplinger's magazine has championed over the decades a number of personal finance strategies and investment products that later became popular «conventional wisdom»: the superiority of systematic investing (dollar cost averaging) over market
timing; growth stocks that paid little or no dividends but invested in new technologies; mutual
funds, especially no - load
funds; stock
index funds; term life insurance, rather
than whole - life; and global investing.
I'd rather pay 100 bps for an S&P 500
index fund trading at 12
times normalized earnings
than 5 basis points for the same market trading at 25
times earnings, which it does as of March 2016.
But seg
funds impose very high fees — as much as 4 % a year, which is substantially more
than the 2 % to 2.5 % that most mutual
funds charge, and four to 10
times what
index funds bill you.
At least your
index fund won't get so easily gamed, and given the small cap effect over
time, you'll probably do better
than the S&P 500, even excluding the effects of gaming.
Clearly an
index fund has a much lower MER, but if you have a large portfolio, then even a 0.5 % MER can be more
than a one -
time transaction fee.
Stock portfolios should thus do better
than index funds if you can just let your System 2 do the thinking, and individual stocks give you other advantages such as better control over
timing of realizing gains & losses, etc..
So joining the market with
index funds would generate better yields over
time than any financial wizard could.
The companies and money managers who run actively managed mutual
funds — and charge fees and management expenses many
times higher
than those for
index funds — have often argued that one - year returns aren't a fair snapshot of their long - term performance.
One may argue that holding cash is safer
than buying an
index fund (or stock, ETF, mutual
fund, etc), and financially that may be true over a given period of
time (for instance, the USD beat the SPY for the year of 2008).
There are
times when gold does much better
than gold mining stocks, but in the long run you're much better off buying precious - metal mining stocks — and in Canada, you've already got that if you own a broad - market
index fund.»