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tony

Index Funds Are Not For Everyone!

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Thanks, Tony. Here's my favorite excerpt:

 

 

Still, there are a few people -- the Happy Few -- who can do better than index funds. You and I, to name just two. And that fellow out in Omaha -- what's his name?

 

Solin actually invokes Warren Buffett -- to argue for index funds!

 

That's like invoking Copernicus to make a case that the sun revolves around the Earth.

 

The author refers to index-fund investors as Smart Investors. Other investors are presumably Dumb Investors. Actually, Buffett has said -- in effect -- that DUMB investors should invest in index funds.

 

It's just not cricket to suggest that Buffett is an adherent of the BOIF [buy Only Index Funds] strategy.

 

 

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Hi Tony,

Here are some more favorites. I like them all.

Steve

 

 

"Investing all of your assets in any one sector of the market--especially a volatile sector--is foolhardy."

 

"The average compensation of brokers is upwards of $150,000 per year.--Not bad for someone who ignores the basic principles of finance and is selling a hope and a dream, with precious little to back it up."

 

"It was Bogel and Vanguard who created the opportunity for all investors to invest for market returns."

 

"You should ignore everything you read in the magazines and newspapers, everything you see and hear on the television and everything that you pay to have pumped into your Palm Pilot or BlackBerry that indicates that they can tell you where the markets are headed or whether or not a particuular stock or fund should be bought or sold."

 

"'Financial ######ography' refers to the endless predictions made in the financial media. -- These predictions are intended to sell books, magazines and newspapers, or to garner viewers and thus sell television advertising time."

 

"Jonathan Clements is the rare exception to those financial journalists who routinely peddle 'financial ######ography.'"

 

"In November 2000, the venerable Fortune magazine set forth 'top picks' from its panelists of 'top' stock analysts. Between November 2000 and November 2003, here is how those predictions fared: S&P 500, (-22%); NASDAQ, (-41%); Fortune picks, (-80%)."

 

"Many investors who have been victimized by broker misconduct are victimized a second time when they attempt to recover their losses from one of these industry-administered arbitration panels."

 

"Standing alone, the existence of the mandatory arbitration system is reason enough to avoid hyperactive brokers."

 

"If you decide to use an advisor, you should be wary of anyone who does not consider the lowest-cost options to implementing investment portfolios."

 

"Both Fidelity and the Vanguard Group are well-known and highly reputable firms."

 

"As a practical matter, it really does not make a difference whether you go the ETFs route or use index mutual funds."

 

"Rebalance your portfolio. Nothing is more important that your allocation remains where you want it to be."

 

"Rebalancing can also be necessary because some life event has changed your need for income from your portfolio or your sense of how much risk you can assume in your portfolio."

 

"If you don't want to carry out your own rebalancing, you can simply invest your retirement savings in one of the Vanguard target funds."

 

"Wall Street's favorite scam is pretending that luck is skill." (Ron Ross quote)

 

"Brokers and advisors have a vested interest in convincing you that investing is terribly complex and certainly not something you can undertake on your own. -- This is not true."

 

"Smart investing takes less time than brunch."

 

"For the 10-year period ending October 2004, only 2.4% of the 1,446 funds that had as a goal beating the S&P 500 index succeeded in doing so."

 

"The quest for the outperforming '###### funds' is obviously counterproductive."

 

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Great quotes

 

 

Steve

 

I totally agree with the quotations and I like Jonathon Clements who writes in the WSJ !!

 

 

 

 

Hi Tony,

Here are some more favorites. I like them all.

Steve

 

 

"Investing all of your assets in any one sector of the market--especially a volatile sector--is foolhardy."

 

"The average compensation of brokers is upwards of $150,000 per year.--Not bad for someone who ignores the basic principles of finance and is selling a hope and a dream, with precious little to back it up."

 

"It was Bogel and Vanguard who created the opportunity for all investors to invest for market returns."

 

"You should ignore everything you read in the magazines and newspapers, everything you see and hear on the television and everything that you pay to have pumped into your Palm Pilot or BlackBerry that indicates that they can tell you where the markets are headed or whether or not a particuular stock or fund should be bought or sold."

 

"'Financial ######ography' refers to the endless predictions made in the financial media. -- These predictions are intended to sell books, magazines and newspapers, or to garner viewers and thus sell television advertising time."

 

"Jonathan Clements is the rare exception to those financial journalists who routinely peddle 'financial ######ography.'"

 

"In November 2000, the venerable Fortune magazine set forth 'top picks' from its panelists of 'top' stock analysts. Between November 2000 and November 2003, here is how those predictions fared: S&P 500, (-22%); NASDAQ, (-41%); Fortune picks, (-80%)."

 

"Many investors who have been victimized by broker misconduct are victimized a second time when they attempt to recover their losses from one of these industry-administered arbitration panels."

 

"Standing alone, the existence of the mandatory arbitration system is reason enough to avoid hyperactive brokers."

 

"If you decide to use an advisor, you should be wary of anyone who does not consider the lowest-cost options to implementing investment portfolios."

 

"Both Fidelity and the Vanguard Group are well-known and highly reputable firms."

 

"As a practical matter, it really does not make a difference whether you go the ETFs route or use index mutual funds."

 

"Rebalance your portfolio. Nothing is more important that your allocation remains where you want it to be."

 

"Rebalancing can also be necessary because some life event has changed your need for income from your portfolio or your sense of how much risk you can assume in your portfolio."

 

"If you don't want to carry out your own rebalancing, you can simply invest your retirement savings in one of the Vanguard target funds."

 

"Wall Street's favorite scam is pretending that luck is skill." (Ron Ross quote)

 

"Brokers and advisors have a vested interest in convincing you that investing is terribly complex and certainly not something you can undertake on your own. -- This is not true."

 

"Smart investing takes less time than brunch."

 

"For the 10-year period ending October 2004, only 2.4% of the 1,446 funds that had as a goal beating the S&P 500 index succeeded in doing so."

 

"The quest for the outperforming '###### funds' is obviously counterproductive."

 

 

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