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the etf model is now negative 20k with international and commodities taking the biggest hits pulling the model south.. DBC(COMMODITY ETF) IS DOWN 17K AND VXUS (international) HAS FALLEN 15K doing the lions share of damages.
the managed fund fidelity insight model is still up 40k . at the highs the etf model was up 67k and the fidelity model up 73k. they both began life with equal amounts.
this is why i say over and over your own entrance and exit points coupled with market action trumps lowest expenses and indexing by far.
in the real world there is a time indexing does better and a time managed funds do better and rarely does the comparison work out like in the static lab comparisons.
well on to next month.
Last edited by mathjak107; 10-02-2014 at 02:58 AM..
So, would you say that either method has produced better results than a similarly weighted and long term strategy of index funds and a good multisector bond fund? If so, by what percentage?
it is hard to say because you can never compare apples to apples because the portfolios are all different. a lot depends on your entrance timing.
as you see the more conservative holdings in the fidelity model i use is blowing away the etf model . but if we were in the early stages of the bull market results would be different i am sure.
but i can say and document that the last 26 years have seen the fidelity insight growth model beat a s&p500/ total market fund by around 500k with an initial investment of 100k, 1.9 million to about 1.4 million.
of course the insight model has a lot more diversificatiion and types of funds so putting together an equal mix of etf's and comparing is very difficult and many funds used have no equals to compare against.
exploiting a fund like fidelity export and multinational at times of a weak dollar and swapping it for a fidelity fund weighted more for a strong dollar when the big picture changes has no etf equals as an example and while neither fund beat its index ,working together they surpassed it.
there really is not a good way to compare what would have been.
Last edited by mathjak107; 10-02-2014 at 03:54 AM..
I'll have to look into something like fidelity insight. From what I can tell I have been doing something similar myself for the past 20 years, but I am sure they could do better and there are times I am simply frozen and not sure what to do next. At present, I am mostly index with a few specialty funds (healthcare, midcap growth) for added octane and some multi-sector bond funds. I have been avoiding international since 2009, but know there must be some good plays there.
As the stakes get higher (age and balances) it makes sense to start paying someone to do what they (as a team) do best.
Plus, the whole issue with the stronger dollar is something to be considered seriously. This years weakness in growth and small caps
has had an adverse affect on my portfolio. One of my 80/20 portfolios is only at 4.44% YTD and I feel I could have done better.
I need the discipline. I need someone to take calling the shots off my shoulders . All i would do is plot my next move or 2nd guess the moves i did. I know better and leave it to a 3rd party.
the managed fund fidelity insight model is still up 40k . at the highs the etf model was up 67k and the fidelity model up 73k. they both began life with equal amounts.
this is why i say over and over your own entrance and exit points coupled with market action trumps lowest expenses and indexing by far.
You DO say that over and over , but I don't think any knowledgeable investor disagrees with that, as it's a pretty obvious point, IMO. However, the argument for indexing & lower expenses has never been that it's MORE IMPORTANT than timing or allocation--I don't believe I've heard anyone here suggest that. Rather, it gives you an additional edge that can end up being very significant over the long term, regardless of whatever else you do. Sure, an investor can screw up those other things, and the impact of that will likely be too much for lower expenses to make up for, but he likely would have made the same bad moves investing in more expensive (actively-managed) funds ANYWAY--so he STILL comes out ahead of where he would have been by going with the lower-cost funds. (In general, on average, based on the historical outperformance of index funds vs. managed funds, yada, yada, yada.)
If you're a race car driver, the outcome of the race will mostly depend upon your driving skill--OF COURSE--but you're still going to want the car that's a little faster than the others, right? What driver is going to eschew the faster car "because he won't win anyway if he drives a poor race?"
Also, I don't think in this thread you're really comparing apples to apples, and I would say that the disparity in returns to this point likely has more to do with simple ALLOCATION than being an example of superior "timing and market action." (Yes, I realize that allocation and the other two are related.)
Also, part deux, if you're going to do this exercise, I personally think it would be much more meaningful to report PERCENTAGE gains/losses than dollar amounts. I have no idea whether "up 40K" means up 5% or 50%, so it doesn't tell me much.
Don't mean to sound like I'm picking on you, Math. You do a lot of good work.
nope not at all and that is why the comparison between the two is something i am very interested in watching.
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, but I don't think any knowledgeable investor disagrees with that, as it's a pretty obvious point, IMO. However, the argument for indexing & lower expenses has never been that it's MORE IMPORTANT than timing or allocation--I don't believe I've heard anyone here suggest that. Rather, it gives you an additional edge that can end up being very significant over the long term, regardless of whatever else you do. Sure, an investor can screw up those other things, and the impact of that will likely be too much for lower expenses to make up for, but he likely would have made the same bad moves investing in more expensive (actively-managed) funds ANYWAY--so he STILL comes out ahead of where he would have been by going with the lower-cost funds. (In general, on average, based on the historical outperformance of index funds vs. managed funds, yada, yada, yada.)
