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Contest To Be Measured Each Quarter

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Actually DFA just instituted a fee waiver which will bring the expense ratio down to .44% on the DGEIX.

 

The fund are indexes created by DFA academic research.

 

The fund includes the S & P 500 index (Large Cap) as well as an International Small Cap.

 

This is about as good a global index as you can surmise in just one fund. A better return can probably be had at a lower cost by splitting out the asset classes and weighting them different, but for the purposes of this exercise it will be interesting to see if any portfolio submitted matches this fund over a ten year period.

 

ScottyD

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Hi Scotty,

 

I guess that the large cap value series is the s&p 500.

 

I believe, as you, that over time that this portfolio will beat the majority of other funds because of the low expenses and great asset alocation; however none of know where various markets will be in 10 years, and which asset will do best, so success can depend on the weight that participants place on asset(s) in their portfolios, and luck. Also, we have very sophisticated investors who post to this site and will enter the contest.

 

I hopefully wonder, "is there a way to get into this fund at DFA" without an investment advisor.

 

Ira

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HI IRA,

 

I am one of those "sophisticated investors"!!!

 

Currently there isn't a way for individual investors to get in, at least through a 403b, but I am working on that. Unfortunately even if I am successful the 90-24 transfer losswill end up eliminating it as a possibility for most people.

 

ScottyD

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DGEIX looks like a great fund. Is it available for 403(b)? Morningstar shows the minumum investment to be $2,000,000.00. This contest should be limited to products where the average 403(b) participant could actually open an account and account would take monthly payroll contributions.

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If the fund is in a plan the minimum is waived, however it is not in many 403b plans at this point.

 

Now, if this contest can only include funds that are likely to be on approved providers lists we will have to exclude Vanguard, Fidelity, T. Rowe Price, TIAA, and the list goes on. I think the point of the contest is to see different management styles and compare them and to point out that some management styles that SHOULD be available are successful, DESPITE the fact that they are not available.

 

ScottyD

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French teacher brought up the subject of how long the contest will last. OUr portfolios can differ based on the time of the contest. I propose 5 years, some might agree while others may have different viewpoints. Any comments?

 

Ira

 

 

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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.

 

Five years sounds fine...though we could just as easily make it ten, with 9 1/2 years of "bragging rights" preceding. :-)

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DGEIX looks like a great fund. Is it available for 403(b)? Morningstar shows the minumum investment to be $2,000,000.00. This contest should be limited to products where the average 403(b) participant could actually open an account and account would take monthly payroll contributions.

 

I'm assuming that the contest encompasses the ACTUAL 403(b) plans that people have available to them, no? Or at least, plans that should be available in a semi-perfect world? I have no problem with Fidelity, Vanguard et all being included, seeing as they are widely available where I am (and SHOULD be widely available elsewhere). But to pick a mutual fund with a $2 million minimum contribution is not quite in the spirit of the contest. I could probably research a few local hedge funds with great returns, too, but that takes us way out of the realm of 403(b) accounts.

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FT,

 

I have addressed this issue in a previous post. If the fund was available in a 403(b), which if I am successful it should be soon there is no $2,000,000 minimum and it will not have to be purchased through an advisor.

 

Regardless, a hedge cannot be in a 403b, a mutual fund can. The purpose is to compare plans and how plans should look. Why exclude a fund that would be great for 403b plans?

 

ScottyD

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Hi All.........Simply bring the thread back to the top again.

 

As benchmarks, I suggest that we can have two different ones:

 

DFA Global Equity Fund (DGEIX whcih Scotty proposed, and the Fidelity Spartan Total Market Index.

 

Ira

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So far I see only three portfolios for this challenge and lots of talk...let's have some competition here! I think these could easily be tracked by setting up portfolios in Morningstars portfolio section (as of October 1) and seeing the growth/decline of the initial $50,000 at 1 year, 3 years, 5, years, etc...with ongoing crowing, angsting, etc, about "1 year doesn't mean anything and neither does 5"... Since it is supposed to be fun, maybe more of you could risk a leap by putting your hypothetical 50K where your mouths are...I am not afraid to possibly have the worst portfolio, but I am wondering where the agents portfolios are, and what about somebody simply proposing an index or two. How about a T-C portfolio?..please don't give me a one-third chance to chastize yall for not following my wonderful advice, my head will burst...note too, that while someone will "win", the important thing is the comparisons to the market as a whole, and subsequent discussions...and the analysis which we may learn from. Dan

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Hi Dan,

 

You said, "Since it is supposed to be fun, maybe more of you could risk a leap by putting your hypothetical 50K where your mouths are"

 

What do you mean "hypothetical". Winner take all.

 

I have one picked out. I simply need to look up the symbols so it can be posted with Morningstar as you suggested. Dan, can we post all of the portfolios at one place say under the name "403bwise" Do you know if dividents, and additional shares earned during the quarter show up automatically at rhe Morningstar portfolio site?

 

Hopefully we will have submissions with different type portfolios, active, index, socially responsible, load, no load, those who market time and those who do not, as well as other types.

 

Ira

 

 

 

 

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Hi........here's my portfolio based on a five year contest.

 

Fidelity Spartan Total Market Index (FSTMX) $11,500

 

Fidelity Spartan Ext Market Index (FSEMX) 11,500

 

Vanguard Total Int Stk Market Index(VGTSX) 8,000

 

Vanguard REIT Index (VGSIX) 2,000

 

Vanguard Short Term Invest Grade(VFSTX) 12,000

 

Vanguard Inflation Protected(VIPSX) 5,000

_______

 

Oct. 1, 2005 - TOTAL $50,000

=======

 

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