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Guest Sierra

TR: So are you saying that the fixed annuity holder is guaranteed future annuity income rates for free? Just answer yes or no and then you can finish cutting the grass.

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Guest TR1982

I already finished cutting the grass. It looks wonderful and my wife is really happy.

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Guest TR1982
I have no freakin' idea one way or the other. But I'll concede that Bogle was an independent researcher that reached different conclusions from TR's two PhD's, if you'll concede the possibility that TR's two PhD's were independent researchers who simply reached different conclusions from Bogle.

 

Also, if you produce EVIDENCE that TR's cited researchers were simply preordained to reach the conclusions that they did, and that therefore the article they wrote was nothing more than a bag job, then I'm all ears. But the simple fact that it was published in the Journal of Financial Planning is hardly "evidence." Indeed, given their screening procedures, it's very much evidence to the contrary.

 

FT,

Thought you might want to see what one of the gods (William Bernstein) of indexing is admitting at the current time.

 

 

Efficient Frontier

 

William J. Bernstein

 

When Indexing Fails

When an asset class does relatively well, an index fund in that class does even better. ­ "Dunn's Law"

 

 

"Yea, the wise Prophet Bogle brought knowledge to the masses, and they saw that it was good. In fact, better than good. S&P indexing has done so well that sometime this year, failing apostasy or Armageddon, the Vanguard 500 Index Fund (VFINX) will surpass Fidelity Magellan as the planet's biggest mutual fund.

 

The reason is simple. VFINX has beaten 83, 93, 95, 89, and 92 percent of all mutual funds in its Morningstar class over the past 1, 3, 5, 10, and 15 year periods, respectively.

 

Unfortunately, the news for indexing is not that sunny elsewhere. Consider that the same numbers for the granddaddy of all small cap index funds, the DFA 9-10 US Small Company Portfolio (DFSCX), are 31, 29, 70, 57, and 43 percent, respectively. And for foreign funds the data are all over the place: 86, 46, 71, 9, and 100 percent, respectively.

 

What are we to make of this? Is indexing really that good for domestic large cap stocks? And is it that bad for small cap stocks? And just how good is it, really, for foreign stocks?"

 

Just food for thought.

 

http://www.efficientfrontier.com/ef/499/indexing.htm

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Guest Sierra
I already finished cutting the grass. It looks wonderful and my wife is really happy.

Your Honor: Please instruct the witness to be more responsive!

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Guest TR1982
TR: So are you saying that the fixed annuity holder is guaranteed future annuity income rates for free? Just answer yes or no and then you can finish cutting the grass.

 

I already finished cutting the grass.

 

What do you mean? Are you referring to future annuity payout rates (not interest rates) in a deferred annuity? If this is what you mean (payout rates) are never guaranteed in a (except for a guaranteed minimum rate) fixed annuity contract. The payout rate is set each year by the insurance company.

 

It would be impossible and unsound for an insurance company to guarantee a future payout rate when future interest rates are unknown. At the time of annuitization, the current interest rate is known and so the the underlying fixed income investment is purchased to pay the income for the annuitant.

 

I am sorry to be so wordy but your question is ambiguous to me. I am also trying to be a good sport and not annoy you to much.

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FT,

Thought you might want to see what one of the gods (William Bernstein) of indexing is admitting at the current time.

When Indexing Fails

When an asset class does relatively well, an index fund in that class does even better. ­ "Dunn's Law"

 

 

"Yea, the wise Prophet Bogle brought knowledge to the masses, and they saw that it was good. In fact, better than good. S&P indexing has done so well that sometime this year, failing apostasy or Armageddon, the Vanguard 500 Index Fund (VFINX) will surpass Fidelity Magellan as the planet's biggest mutual fund.

 

The reason is simple. VFINX has beaten 83, 93, 95, 89, and 92 percent of all mutual funds in its Morningstar class over the past 1, 3, 5, 10, and 15 year periods, respectively.

 

Unfortunately, the news for indexing is not that sunny elsewhere. Consider that the same numbers for the granddaddy of all small cap index funds, the DFA 9-10 US Small Company Portfolio (DFSCX), are 31, 29, 70, 57, and 43 percent, respectively. And for foreign funds the data are all over the place: 86, 46, 71, 9, and 100 percent, respectively.

 

What are we to make of this? Is indexing really that good for domestic large cap stocks? And is it that bad for small cap stocks? And just how good is it, really, for foreign stocks?"

 

Just food for thought.

 

http://www.efficientfrontier.com/ef/499/indexing.htm

 

So indexing works well for large-cap stocks, but far less so for small-caps and foreign stocks. And given the historic performance of the asset classes, wherein small-cap stocks historically outperform mid-cap stocks which historically outperform large-caps, is everyone STILL unwilling to admit there's a place for active management?

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Guest Sierra

......is everyone STILL unwilling to admit there's a place for active management?

================================================

Who on this thread or any other thread ever said that there is never a place for active management?

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Guest TR1982

Scottyd said:

 

"The research into indexing goes much further than just Bogle, the research is extensive and quite telling - active management just doesn't stack up."

 

There you go.

 

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Guest Sierra

......is everyone STILL unwilling to admit there's a place for active management?

===========================================

Scotty is but one poster you specifically used the word "everyone"

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Guest TR1982

 

"Who on this thread or any other thread ever said that there is never a place for active management?"

 

I just responded to your question.

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......is everyone STILL unwilling to admit there's a place for active management?

===========================================

Scotty is but one poster you specifically used the word "everyone"

 

Actually, that was me, not TR, that used the word "everyone." I take it, Joel, that you are a proponent of actively managed mutual funds in certain circumstances? Would you care to tell us when you feel actively managed funds are suitable?

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Guest TR1982

I guess since Sierra didn't respond he's the other guy that doesn't think there's any use for actively managed funds. Oh well.

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