Comments on: Index Fund Investors Earn More From Investments

By: fessormojo

fessormojo — Fri, 04 Jan 2008 22:27:52 +0000

I would humbly suggest that the fair comparison is not the five-year track record but the 21st Century track record of returns since 12/31/1999 which would include the full cycle including the three years of 2000-2002 when S&P 500 index funds (I assume that is what you are talking about) which wiped out a lot of retirement savings.

If you had to withdraw during that period you could have wiped out much of your savings in a short time. If you “stayed the course” you might have enjoyed buying at the bottom but not the route there.

Index funds like “actively-managed funds” did nothing to go to cash or sell securities short to protect investors money over a three-year period. That’s what they promissed to do and what they did.

Markets are too volatile not to diversify among the strongest sectors or to invest only domestically and overlook foreign stocks enjoying real growth as China drives the world economy. Think about it.

I don’t want to pick a fight, simply suggest that there is nothing wrong with a prudent proactive management program unless you are lazy or refuse to entertain the possibility and acknowledge that some have made it work.

After all this is investment management, not investment storage.

Bill Donoghue

By: Sun

Sun — Sat, 29 Dec 2007 06:08:30 +0000

That AIVSX example is quite misleading IMO. There are plenty of funds out there returned quite well but don’t carry a load. I can give you an example of CGMFX, an actively managed fund whose 5-year annualized return is 37.16% according to Morningstar. Though the fund has a 1.02% ER, I won’t replace it with an index fund.

By: Online Savings Blog

Online Savings Blog — Fri, 28 Dec 2007 19:58:53 +0000

Money Management is Simple: Don't Listen to the Noise…

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By: Mrs. Micah

Mrs. Micah — Fri, 28 Dec 2007 18:25:52 +0000

I *heart* VFINX.

I don’t understand why more people don’t buy it or something similar. Or even simple target retirement funds. I’ve met a fair number of people who are reluctant to sell their employer’s in their 401(k)s and thus have strangely-weighted portfolios. Or who buy a few big stocks they think will do well. *sigh*

By: The Saving Freak

The Saving Freak — Fri, 28 Dec 2007 14:52:35 +0000

So you can trust your money to an “expert” or you can just invest in capitalism. I think I will take capitalism.