DFA funds are good if you absolutely have to have an actively managed component, but you need to find an adviser who sells them. Firms like Vanguard and Fidelity make it so easy to DIY that I wouldn't bother unless I needed the adviser for other purposes.

Yes index outperform almost every time. Trust me, if you were that good to pick actively managed manager for your money to always beat the market, you wouldn't be on DCUMD.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why all the Vanguard boosters?

Because unless you know something the market doesn't, index funds are the way forward. And if you choose index funds, lowest fees are the most important factor in determining returns over the long term. Of all the financial services firms, Vanguard have the lowest cost structure and hence the lowest fees.

As I noted above, index funds are very good but can have serious downsides in a down market (you are diversified but not protected) ... if you can find a decent advisory source some actively managed funds can help you do better than index funds with no more risk, and you don't have to become a genius. I mentioned the one I use, which has done very well as finding alternatives/analogs to the diversification in the index funds, with better return and less risk in many cases.

But if you want to set & forget and understand that index funds can still have some real downside risk, too, they are a worthwhile choice.

This sounds like gobbledygook to me. Index funds track the market. The market goes up and down. At any given point there will be a managed fund that loses less (or more) or gains more (or less) than an index fund, but the point is that there is no way of identifying those funds in advance. The research I am aware of shows that index funds outperform 80% or more of managed funds-- consistently in up and down markets.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why all the Vanguard boosters?

Because unless you know something the market doesn't, index funds are the way forward. And if you choose index funds, lowest fees are the most important factor in determining returns over the long term. Of all the financial services firms, Vanguard have the lowest cost structure and hence the lowest fees.

As I noted above, index funds are very good but can have serious downsides in a down market (you are diversified but not protected) ... if you can find a decent advisory source some actively managed funds can help you do better than index funds with no more risk, and you don't have to become a genius. I mentioned the one I use, which has done very well as finding alternatives/analogs to the diversification in the index funds, with better return and less risk in many cases.

But if you want to set & forget and understand that index funds can still have some real downside risk, too, they are a worthwhile choice.

I disagree completely. There are always downside risks in a down market. The best way to protect yourself is by having an appropriate mix of bonds and stocks - treasuries tend to do well when the stock market falls.

Actively managed funds do not do better than index funds with no more risk. They may do better in the short term, but over the long term their returns will revert to the mean, and as a result of their higher fees you will be worse off.

http://www.forbes.com/sites/rickferri/2013/04/04/index-fund-returns-get-better-with-age/

Anonymous wrote:

Anonymous wrote:Why all the Vanguard boosters?

Because unless you know something the market doesn't, index funds are the way forward. And if you choose index funds, lowest fees are the most important factor in determining returns over the long term. Of all the financial services firms, Vanguard have the lowest cost structure and hence the lowest fees.

As I noted above, index funds are very good but can have serious downsides in a down market (you are diversified but not protected) ... if you can find a decent advisory source some actively managed funds can help you do better than index funds with no more risk, and you don't have to become a genius. I mentioned the one I use, which has done very well as finding alternatives/analogs to the diversification in the index funds, with better return and less risk in many cases.

But if you want to set & forget and understand that index funds can still have some real downside risk, too, they are a worthwhile choice.

Anonymous wrote:Why all the Vanguard boosters?

Because unless you know something the market doesn't, index funds are the way forward. And if you choose index funds, lowest fees are the most important factor in determining returns over the long term. Of all the financial services firms, Vanguard have the lowest cost structure and hence the lowest fees.

Anonymous wrote:Why all the Vanguard boosters?

I have accounts there but am not a fanboi or "booster."

I'm a satisfied customer. In general their funds are well managed and they keep expense ratios low (more money for you). That said, however, many rely on their index funds when there is some good evidence that judicious selection of actively managed funds there can do even better and protect your downside (many index funds got hit hard in the latest slide).

I use Dan Weiner's Vanguard Advisor reports to help select allocations within Vanguard. I have no connection with him or it, I just have subscribed for about 10 yrs. He suggests a variety of funds & portfolios that can try to maximize your return and also insulate from some of the downsides of index funds. He's more than made me the cost of the subscription over time (I pay full price, he doesn't know me from Adam, etc.).

Investing is not easy, if it ever was. He seems to have some good perspectives on how to select the top rank of the many Vanguard funds, depending on your investment goals.

You may not be as diversified as you think, you may have overlapping redundancies among different firms or even different funds within a firm. Some companies like Fidelity and Vanguard have a tool where you can see how much overlap there is between their different funds.

I have a federal TSP retirement account that I'll soon roll over into my IRA; that IRA; an inherited IRA from my father, and a small Roth IRA, plus 3 investment accounts. DW has an IRA/SEP, a 401k, and an investment account.

Why all the Vanguard boosters?

We used to have a bunch but we made an effort to consolidate several IRAs at Vanguard (although we still have one IRA at T Rowe and a taxable account at Schwab).

Email only at Vanguard saves you a twenty buck fee a year, IIRC. Fidelity is good, too, if you want to maintain a little provider diversity or Schwab if you need good brokerage options.

I rolled the old 401ks and also inherited IRAs over to Vanguard, where I already had a Roth. Also if you go email only with Vanguard you get some sort of discount, I forget exactly. Call them and they are very helpful.

My husband and I had separate old 401(k)s from previous jobs, as well as a brokerage account, all with different firms. After a dispute with the broker who held the brokerage account, we met with a financial planner last year who rolled the 401Ks over into IRAs and transferred the brokerage account so they are now all with the same firm. You obviously have to find someone you trust if you're going to do this, and our financial planner/brokers have a decades-long track record. It really simplifies everything to have all of it on one statement, and you can choose different funds/equities according to risk level for the different accounts if you need to be diversified.

Call Vanguard and let them help you consolidate all the old 401Ks. Then go green and end the paper statements.

So I was doing some filing last night and realized that between my husband and I, we have some sort of retirement or investment accounts at 9 different firms (in addition to checking and savings at two other banks). Most of these are old 401(k)s, but it got me wondering what others do?

My husband points out "well, at least we've diversified!"

We've talked about consolidating all of this, but I haven't really looked into the issue and the paperwork and hassle seems daunting. So, if this is a really dumb situation (aside from the environmental impact of all those paper statements), please let me know, it might just be the kick in the pants I need to do something about it.