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Contest To Be Measured Each Quarter

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Hi,

 

In a different thread FR and I discussed the possiblity of measuring how well various portfolios do (say versus no load fund indexes). We both agreed(believe it or not) that this would be worth pursuing. FR is willing to develop a portfolio, I guess from Ing.

 

Several years ago, this had been done via the NY Times with various top advisors at that time who, had different viewpoints of investing.

 

Below is a proposal that can instituted Oct 1, 2005, the start of the next quarter. We hope that others may wish to have portfolios that will be measured.

 

 

We welcome comments on the best way to set this up. Here is a first suggestion.

 

Make a portfolio of funds from the company that you represent if you are a sales advisor, or think highly of if you are not. I will provide no load index funds from Vanguard that match the ones you choose, or if there are a prohibitive amount of portfolios to measure, then I can develop a portfolio of index funds that will be used against all the portfolios. Let's see how these portfolios do over time. I guess that we can make the initial amount of the portfolio equal to $50,000, and you can make fund changes for each quarter. We can see the progress of the funds for the qtr and total time period that we are looking at; which portfolios shine, and which do not.

 

Ira

 

 

 

 

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IRA..A great idea! How do we proceed? Are there limits to the number of funds in a portfolio?, say 5, including cash/bonds/indexed/managed/foreign? or all 5 could be bonds..I am ready: here are my 5 (subject to change since the deadline is Oct. 1): Dodge and Cox Stock, Balanced, International, Vanguard Primecap Core, and Vanguard Emerging Markets..This little investement will blow everybody out of the water. They will be afraid to join the challenge when they see my lineup. Imagine T.Creff doing anything good, in spite of their new Wall Street bottom line honcho...or ING, what a joke! Come on you yella bellies...Dan

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Hi Dan, OK, your in.

 

It's my opinion that participants can have as many funds as they wish (although, I agree the fewer the better). As far as measuring performance, I think that each participant can measure their own protfolio each month, quarter, and total to date, with any comments if they wish.

 

There may be a better way of measuring, if one of us has a program in place that can measure all of the performances.

 

In the similar contest that the NY TIMes sponsored, participants were not able to enter closed funds, only funds that were open at the time. I tink that this should include funds that are limited to minimim size of start up, for example Vanguard Precious Metal at 10K mimimum.

 

Ira

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I would be interested if this contest is limited to product ( VA, fund family, or mutual fund platform) that is available to 403 (b) participants and not the whole universe of funds.

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I am game. I am a FA and my wife has a 403B as well through her school.

 

For those needing growth, I often use what is called the Founding Funds Strategy with Franklin Templeton.

 

34% Templeton Growth TEPLX

33% Franklin Income Fund FKINX

33% Mutual Shares Fund TESIX

 

(all part of the Franklin Templeton Family of Funds)

 

At 50K, the front load on A shares would be:

 

17K of TEPLX @ 4.5% = $765

16.5K of FKINX @ 4.25% = $701.25

16.5K of TESIX @ 4.5% = $742.50

 

Total sales charge of $2208.75

 

$16235 invested in TEPLX

$15789.75 invested in FKINX

#15757.50 invested in TESIX

 

 

For those needing income (but for this challenge we will show it with dividends and capital gains reinvested), I often use Income Foundation Strategy by American Funds.

 

34% Capital Income Builder CAIBX

33% The Bond Fund of America ABNDX

33% The Income Fund of America AMECX

 

(all part of American Funds - American Funds also have excellent growth funds)

 

At 50K, the front load on A shares would be:

 

17K of CAIBX @ 3.75% = $637.50

16.5K of ABNDX @ 4.5% = $742.50

16.5K of AMECX @ 4.5% = $742.50

 

Total sales charge of $2122.50

 

$16362.50 invested in CAIBX

$15757.50 invested in ABNDX

$15757.50 invested in AMECX

 

Note: You can reduce the overall sales chages by buying funds with lower sales charges and then exchanging the funds. You can also rebalance the funds back to 34/33/33%, if desired, to offset the effect the the different sales charges have on the percentages.

 

Pick whatever date you like for the competition to begin. 8/2 would be a good date.

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Guest Sierra

I assume FA means you are a financial analyst. Please confirm. Are the funds you list your wife's 403(b)?

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Financial Advisor. No, the funds are some that I often recommend as part of my practice. My wife is stuck with mediocre investment options (and high expenses) like most of you in her 403(b).

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Typically, my compensation is transaction-based (sell a fund, bond, stock, annuity). I also receive small trails (.25%) on the funds I have sold, typically starting in the 13th month. I do have a few wrap accounts (no charge for transaction but a small annual fee, typically around 1%, for managing the account).

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Hi.........I am also looking forward to entering the challenge which starts, Oct. 1, 2005. This date is picked because of the start of a new quarter, which provides ease of measuring our performances.

 

I propose that the benchmark that we use is simply the Wilshire 5000( a representation of the U.S, Total Stock Market) ; the Vanguard Total Stock Market Index or the Fidelity Spartan Total Market Index tracks this index.

 

We will also be competing versus each other, and see what our cumulative gains are each quarter to date. We start with $50,000. Who ever has the most at the end wins.

 

Any changes in our portfolio for the next quarter needs to be entered before the quarter starts, or we stay with the allocation that we have.

 

Ira

 

 

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Hi..............I moved this contest thread up before it disappeares in internet land....................time to start thinking about your portfolio.............Best of luck..........Ira

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We start with $50,000. Who ever has the most at the end wins.

 

 

Here's a really interesting question: when is "the end"? Given that investing is usually a long-range endeavor, seems like this might go on a while. If anyone trumpets victory after only a year, they're sure to get pasted by those who will remind them that investing success isn't judged over a one-year period.

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I'm ready.

 

My portfolio consists of one fund:

 

DFA Global Equity Fund - DGEIX.

 

BTW - this fund really should be the benchmark as it is made up of global indexes.

 

ScottyD

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Scotty

 

I didn't know about dgeix. It's a looks like a great fund with lots of legs, and very, very hard to beat. Someone who is an expert on asset allocation probably built this one. I saw that the expense rate is 0.67. Are the various funds llisted below for dgeix index funds?

I notice that there are no large cap growth or (mid cap?).

I think that this fund will preform better than overall indexes for the market, so perhaps there is a better market representative fund out there. Comments from other participants appreciated.

 

Dimensional U.S. Large Cap Value Series N/A 39.90 N/A

Dimensional U.S. Small Cap Series N/A 28.87 N/A

Dimensional International Value Series N/A 16.01 N/A

Dimensional Large Cap International N/A 8.01 N/A

Dimensional Emerging Markets Value N/A 3.29 N/A

Dimensional Real Estate Securities N/A 3.20

 

 

French teacher,

 

How does a five year time period sound? Only people who start October 1, 2005 can be in the contest. Comments from other participants appreciated.

 

Ira

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