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Your comment is way off topic but I still want to bring to your attention how naive you are - fund managers fee's eliminate most of the value in consumer investments and most will do far better using very low cost Vanguard funds.
Justin Urquhart Stewart, from stockbroker Seven Investment Management, says: 'People are not aware how much is being leeched away. When returns are high, these charges don't sound much, but they stick out like rocks through water when returns are low. 'Investors are being seriously misled about the range of costs and charges.'
Vanguard, for those who did not know, has a few actively managed mutual funds, tax advantaged funds, and even a few sector specific funds. All have varying fees/expense ratios, a few of them have very high investment minimums ($250,000 plus), and yes, even a few are closed off to new investors.
I realize that speaking out against index funds — like one Jim Cramer last week — is black sheep territory (been there, done that), but I came across an interesting observation tonight.
When I compared the 10 year performance of Vanguard’s actively managed funds versus their flagship index fund, S&P 500 index (VFINX), over the last 10 years, 20 actively managed funds have outperformed the S&P 500.
Don’t believe me… see Vanguard’s own data below (captured via a screen shot).
By the way, the current 10 year return for Vanguard’s S&P 500 index fund is a negative 3.08% (–3.08%).
The above is from the link
This is dated but the thought is still there.
The beauty is we each have our choice to buy or sell and what to buy or sell and whom to buy or sell from. That is the beauty of the market. Naive? Nah!
The above includes a chart depicting the ten year performance of the Vanguard S&P Index fund. I believe a 10K investment in 2000 is now worth how much? Yeah good for them it is a low fee fund.
The importance of all of this as it relates to the topic is that investment banking, Investing, personal finances/retirement planning all have major skin in how the foreclosure process plays out. How many with mutual funds are looking at fund holdings to see how much skin their fund has in financial, real estate etc related companies. This all comes back to consumer confidence and if folks feel their portfolio's are at risk that is one more reason not to buy a house. If they see growth in their portfolio that becomes a greater reason to buy. Folks with assets might see now as a good time to move into the market if they want to play cash. Makes for a very clean transaction with no worry about a mortgage being sold. Folks who paid cash for their current homes can sleep clean knowing the paper trail that begins with them is probably as clean as normal if they purchase new. Wouldn't folks feel more comfortable buying a house that the seller paid cash for and never had a mortgage? Folks who can pay cash don't have to worry about bank fears to lend or lending being put on hold. Long term investment gives you more options at times like this if you have the assets.
That's the worst thing about this whole situation - everything is on hold and that will impact right through the economy. Some people have already had offers accepted on foreclosed properties and are now in limbo whilst the documentation is reviewed. When people move into a new home they spend money with local tradesmen and shops to get the home to how they want it to look. All of that expenditure will be on hold as well, and for some businesses it maybe the straw that breaks the camels back.
In the meantime I saw on the Today show earlier this week that Wall Street Bankers are expecting record bonus payments of $14.4 Billion this year
To bring my previous comments squarely on to your OP question. It might be to early to call the impact direct or indirect of the foreclosure crisis on the Triangle housing market. Consumer confidence relates directly to willingness to purchase a house. The wealth effect or lack of can motivate or discourage a would be home buyer. The September run up in the market was a positive for the wealth effect for some and a foreclosure driven downturn (especially led by financial's) might drive down that wealth effect and as a result cause folks to continue to delay buying. Additionally if it makes selling a home more difficult elsewhere that will diminish the number of transplants especially retiree's to the Triangle.
Vanguard, for those who did not know, has a few actively managed mutual funds, tax advantaged funds, and even a few sector specific funds. All have varying fees/expense ratios, a few of them have very high investment minimums ($250,000 plus), and yes, even a few are closed off to new investors.
I realize that speaking out against index funds — like one Jim Cramer last week — is black sheep territory (been there, done that), but I came across an interesting observation tonight.
When I compared the 10 year performance of Vanguard’s actively managed funds versus their flagship index fund, S&P 500 index (VFINX), over the last 10 years, 20 actively managed funds have outperformed the S&P 500.
Don’t believe me… see Vanguard’s own data below (captured via a screen shot).
By the way, the current 10 year return for Vanguard’s S&P 500 index fund is a negative 3.08% (–3.08%).
The above is from the link
This is dated but the thought is still there.
The beauty is we each have our choice to buy or sell and what to buy or sell and whom to buy or sell from. That is the beauty of the market. Naive? Nah!
The above includes a chart depicting the ten year performance of the Vanguard S&P Index fund. I believe a 10K investment in 2000 is now worth how much? Yeah good for them it is a low fee fund.
The importance of all of this as it relates to the topic is that investment banking, Investing, personal finances/retirement planning all have major skin in how the foreclosure process plays out. How many with mutual funds are looking at fund holdings to see how much skin their fund has in financial, real estate etc related companies. This all comes back to consumer confidence and if folks feel their portfolio's are at risk that is one more reason not to buy a house. If they see growth in their portfolio that becomes a greater reason to buy. Folks with assets might see now as a good time to move into the market if they want to play cash. Makes for a very clean transaction with no worry about a mortgage being sold. Folks who paid cash for their current homes can sleep clean knowing the paper trail that begins with them is probably as clean as normal if they purchase new. Wouldn't folks feel more comfortable buying a house that the seller paid cash for and never had a mortgage? Folks who can pay cash don't have to worry about bank fears to lend or lending being put on hold. Long term investment gives you more options at times like this if you have the assets.
ugh... ugh!
I want to offer some advice, but I fear it will go unheeded by someone who actually watches and listens to Jim Cramer.
Anyway, since you seem to be educating yourself on investing, here's some things you should be looking at and making your own analysis on... These are the things that Jim Cramer will never talk about:
- There have been 23 consecutive net outflows out of equities... For 23 weeks in a row (right up to this minute), more money is moving out of equities then into them. 23 weeks! The "smart" money is getting out of the market. $80B has left mutual funds YTD. yes, that's a B.
- Permanent Open Market Operations and The Fed... This is what is driving the S&P 500. In fact, it's the only feasible way for the market to continue in the green when every week more money is leaving then entering. The last operation was $2B alone.
- As an investor, you chase "yield". Yah? Look at the UST yields recently. Look at gold at an all time high - ever! Silver... precious metals in general.
I'm sorry, it's just hard for me not to speak out against the slant that many TV investors portray. Hedge yourself against the mutual funds and the S&P 500 game... don't put all your eggs in them, please.
I want to offer some advice, but I fear it will go unheeded by someone who actually watches and listens to Jim Cramer.
Anyway, since you seem to be educating yourself on investing, here's some things you should be looking at and making your own analysis on... These are the things that Jim Cramer will never talk about:
- There have been 23 consecutive net outflows out of equities... For 23 weeks in a row (right up to this minute), more money is moving out of equities then into them. 23 weeks! The "smart" money is getting out of the market. $80B has left mutual funds YTD. yes, that's a B.
- Permanent Open Market Operations and The Fed... This is what is driving the S&P 500. In fact, it's the only feasible way for the market to continue in the green when every week more money is leaving then entering. The last operation was $2B alone.
- As an investor, you chase "yield". Yah? Look at the UST yields recently. Look at gold at an all time high - ever! Silver... precious metals in general.
I'm sorry, it's just hard for me not to speak out against the slant that many TV investors portray. Hedge yourself against the mutual funds and the S&P 500 game... don't put all your eggs in them, please.
When and where did I mention Jim Cramer? Do you people just make things up? You know nothing about me. The very comments you made about money flowing out of equity funds I posted in another forum a few days ago. I am well aware of so don't try to frame my comments. Let me give you a clue. I retired at 59 1/2. Transplanted paid cash for a new house and just purchased a beach home. For me it is been there and done that. I don't need to be warned. I am well diversified in domestic and international equity and bond funds. I hold gold and am moving money out of domestic equity funds and am hedging inflation with funds that do well during periods of inflation. That doesn't alter my comments about fund managers as I know how to research fund managers and fund fees.
Read again that was part of a link I posted and I probably noted the above is from the link. That is what a third person reference and not a first person reference. Again I read a lot and link a lot and apply as appropriate. I often post after saying the above is from the link and any disagreement should be taken up with the author for just this reason. It like the general topic of the foreclosure mess. I will post differing links as food for thought for lurkers and they can apply as they want. Rarely do I take and apply anything I read that is the thought of a anonymous forum poster and would hope others don't. If they provide a link I will evaluate that and weigh it with other information.
......people are renting out their houses while in the foreclosure process and have a revenue flow coming in while they wait for their house to be taken.
Actually, quite common. Fraud is a cultural thing.
One other thing that's important to note... most of the fund managers (including pension funds) are heavily leveraged to Mortgage Backed Securities. oopsy!
They most certainly are but what does this have to do with chocolate cake?
Their portfolios are full of GNMA/FNMA/FHLMC. The former has always carried a full faith government guarantee. The latter GSEs had an implied guarantee that was demonstrated.
The investors in GNMA/FNMA/FHLMC passthrough securities do not bear the risk of default when Joe Blow stops paying his mortgage. Investors in these MBS incur prepayment of principal risks due to refinancing and home sales, whether traditional or foreclosures. And you can rest assured that if a short sale is negotiated on some of the underlying loans within these pools, the investor is not taking the hit.
Generally speaking, pension plans are in poor shape for many reasons, intentional underfunding, stock and other market losses, interest rates, corporate bankruptcies, mergers/ acquistions and court upheld defaults in favor of other creditors.
If you are going to quote something, then it is best to make that clear.
I had to look twice to notice that. It is still absolutely unclear where
your original text starts/stops and where the quoted text starts/stops.
You can always combine '[' 'quote' ']' quoted stuff here ending with '[' '/quote' ']'
Alternatively, you can put some sort of marker in the front of each line like a '#' or a '>'.
You can do that or let your readers guess where the attributions are and where the original text is.
Quote:
Originally Posted by middle-aged mom
Generally speaking, pension plans are in poor
shape for many reasons, intentional underfunding, ...
You left out:
(1) unrealistic expectations of investment returns ( ie. assuming 7-8% every single friggin' year )
... and ...
(2) ego ( ie. investment manager trying to be a hero with derivatives )
I think this thread is done for some of us as now we will have people jumping in and on us who don't know us as posters.
You should have listened to yourself then so do so now! Yup you are right. So now out of here as this is clearly no longer anything resembling a local discussion with people you normally discuss with. Let them do their thing and you should go on doing yours.
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