I just bought VFINX today

[laurence]

Sorry sarcasm is a bit hard to portray over the internets

Yawn - you're still posting here? Do you understand why this board has such a loyal following that shuns M* and those other boards of tripe? Everybody is asking you tough questions, and you just ignore the ones you can't answer. Since you lied about your alum, everything you say is suspect. If you are really invested in the funds you say you are in, 10 years from now you will underperform the market. But the thing is, guys like you convince yourself you didn't. You fudge the numbers and selectively include data. You compare funds to the wrong benchmarks. What I feel bad about is you probably won't suffer from your delusion, since you are (allegedly) putting away enough per year that you will have a comfortable retirement. I feel bad for those who earn less (allegedly) per year who need to be more prudent with their investements who might get tempted with your BS.

Motley Fool has come out with all sorts of "rules" for beating the market - what, market makers and market "breakers" and the like. All of their little games busted in the long run, and I got tired of reading their excuses. If you are so much smarter than the multitude of early retired people on this board, what do you need this board for? All of your "you guys are hopeless" comments make it very clear you are here to troll. You are on a short leash. Contribute something and regain some credibility, or you'll find yourself bounced from the site.

 

[Texas Proud]

According to the Dodge & Cox website, DODFX is compared to the MSCI EAFE Index. The fund started in 2001 and beat the index at the 1,3 and 5 year points.

http://www.dodgeandcox.com/performance/index.shtml

Thanks... but that is a comparison to an index that is not that close to the holdings.... and again.. how much risk are they taking??

And if you look... they have about 15% in emerging markets where the index has zero.. so not completly the same... again, it has a great return... let's look at it in 5 years and see where it is...

 

[AirJordan]

What is your criteria for choosing this suite of funds? You mentioned past performance in a couple of previous posts, how much past performance did you consider? Are there other criteria?

Do you anticipate holding these same funds for the rest of your life? for several decades? for 5 years? Whatever your timeframe, if you go back that many years and apply the same criteria, would have chosen the exact same suite of funds? If not, what is going to be your trigger to trade these funds for others?

First Q, my criteria is a tenured manager, a good fund family, investment principles that I believe in, tax efficiency, and of course outperformance of the benchmark.

As for the funds I plan to hold forever, I'd say VPCCX, DODFX, FAIRX, FBRVX, and RYVPX. Going back in that time frame, yes I would choose the same funds. And what triggers a sell off, 1.5 years of underperformance, that's how long I give a fund to get its act back together. I don't just blindly follow, like people who blindly stuck by Ron Muhlenhkamp, as he drove them into the pavement.

 

[FinanceDude]

So, you don't want to trade, but you like to buy mutual funds that do a lot of trading?

 

[wildcat]

Just one more hilarious point among many others for you AJ. You are touting DFA funds, no? Well, DFA is made of hard core Phds who rely strictly on indexing. The fund's metrics (based on their academic research) are only slightly different from good old Vanguards - for example, the value funds are a little more tilted on the value side - and they offer more options.

So that means you do like the idea of indexing. We knew you would warm up to it skippy.

 

[newyorklady]

really wildcat? that is very interesting. i am going to have to keep researching all of this. i have the sneaking suspicion that while i am not ready to do away with a financial consultant quite yet, i am really going to have to listen to you guys and do a test run... of 10% of my portfolio once i get all of this figured out and see if i have been bamboozled. this forum really has made me see just how ignorant i am. but my problem is that i get scared easily but instead of paying for a financial consultant someone could offer a service that when i want to take all my money out and run for the hills with gold and guns in hand, i could be talked out of it. before that i need to get allocation down, tax ramifications, etc.

 

[wildcat]

Yep, it is true. The U of Chicago guys. AJ should have done a little homework before he just looked at the performance of their funds. Many astute writers, such as Berstein, recommend DFA but again, you have to pay the advisor to gain access to them. Saluki is the guy you should really ask about how/where to get them. He knows his sh!t.

 

[tricky88]

According to the Dodge & Cox website, DODFX is compared to the MSCI EAFE Index. The fund started in 2001 and beat the index at the 1,3 and 5 year points.

http://www.dodgeandcox.com/performance/index.shtml

Don't forget the fine print:
"The Funds' total returns include the reinvestment of dividend and capital gain distributions, but have not been adjusted for any income taxes payable by shareholders on these distributions."

 

[justin]

New York Lady,

You probably would do pretty well in a Vanguard Lifestrategy Growth Fund or Moderate Growth Fund. Comes as a pre-rolled diversified package of fixed income, domestic, international and actively managed funds, all with a tiny expense ratio of something like 0.25%.

Also, if you put $250,000 w/ Vanguard, I think they give you a free financial plan and talk time with a real financial planner (to hold your hand). They'll set you up with an asset allocation and recommend specific funds.

 

[newyorklady]

Don't forget the fine print:
"The Funds' total returns include the reinvestment of dividend and capital gain distributions, but have not been adjusted for any income taxes payable by shareholders on these distributions."

thanks this is just the sort of info that i need to properly evaluate this debate.

 

[sgeeeee]

First Q, my criteria is a tenured manager, a good fund family, investment principles that I believe in, tax efficiency, and of course outperformance of the benchmark.

AJ, you provide no real information that can be used to advantage or tested. You simply attack people who's investment style you find threatening to your own unfounded beliefs.

If this is your criteria, provide us with the data you have collected on the tenure of the managers of these funds vs. all others. How much tenure is required for you to consider the fund? How many funds did you actually eliminate with this requirement? What makes a good fund family? How did the funds you chose beat all other funds in this requirement? How did you measure tax efficiency? How did your funds rank in comparison to others in tax efficiency? How long do you require overperformance of the benchmark to occur before you select? Based on your timeframe answers, it had better be over 30 years or you are assuming the future will be dramatically different than the past. Finally, how did you weight the various criteria listed above against each other? Which were most important, etc.? AJ, you are full of bravado and possibly something else, but you are displaying a great deal of ignorance about investing.

Further, you do not mention risk, diversification, or correlation in your list of criteria. That strikes most seasoned investors as either wildly reckless or ignorant -- certainly not a reasonable position for most investors to take.

As for the funds I plan to hold forever, I'd say VPCCX, DODFX, FAIRX, FBRVX, and RYVPX. Going back in that time frame, yes I would choose the same funds. And what triggers a sell off, 1.5 years of underperformance, that's how long I give a fund to get its act back together. I don't just blindly follow, like people who blindly stuck by Ron Muhlenhkamp, as he drove them into the pavement.

Really? So you are likely to live another 50 or 60 years. If you go back 50 or 60 years, you would find that the same funds met all of the same criteria at that time? And that none of them ever exhibited sub-index performance for more than 1.5 years during that time?

Making a decision about a fund you intend to keep for 50 years based on 1.5 years of performance without any consideration of diversity, correlation, or risk seems naive and misguided to informed investors. The fundamental principle that determines value for all investments is the risk-reward relationship. If you don't understand that relationship, you can't really claim superior knowledge about investments. Since you don't even seem conversant on these issues, I struggle to understand what you can possibly offer serious investors.

You look more and more like an internet troll every day.

 

[donheff]

Yep, it is true. The U of Chicago guys. AJ should have done a little homework before he just looked at the performance of their funds. Many astute writers such as Berstein recommends DFA but again, you have to pay the advisor to gain access to them. Saluki is the guy you should really ask about how/where to get them. He knows his sh!t.

Now that is interesting. I have heard that DFA funds are good but since I don't want to pay an advisor I never looked into any of them. I had no idea they were structured along the line of index funds. Does anyone have a link to their site or a site that describes them? I am curious to read more.

Edit: Nevermind I found the DFA site

 

[AirJordan]

NYL, here's a good primer on them

http://www.thestreet.com/funds/mutualfundmondaybg/10038756.html

With the millions you have, DFA would be happy to take your money, and you wouldn't even have to lose the 1% to an advisor. IMHO, other than Dodge and Cox, DFA is the best fund family out there

 

[wildcat]

http://www.dfaus.com/

 

[Alex]

DFA funds are great index funds. The problem is the fact that you must either have a minimum of $1,000,000 to buy direct (that is for each fund!) or use an advisor. Fortunately, there are a few advisors that charge very reasonable fees. Such as Cardiff Park Advisors- http://www.cardiffpark.com/ that charge a flat fee not a percentage. If you are convinced that DFA is for you, I believe that is the best way to go. Personally, I'm pretty happy with Vanguard.

 

[Olav23]

I also believe you will pay a commision on top of paying an advisor to get access to the DFA funds. If I remember correctly, you buy them through something like a schwab account, and get a special "permission slip" from DFA. Maybe certain advisors in bigger firms can create their own accounts and throw out the commision as part of the "advisor fee", but something else to keep in mind and ask.

 

[saluki9]

I also believe you will pay a commision on top of paying an advisor to get access to the DFA funds. If I remember correctly, you buy them through something like a schwab account, and get a special "permission slip" from DFA. Maybe certain advisors in bigger firms can create their own accounts and throw out the commision as part of the "advisor fee", but something else to keep in mind and ask.

You are correct that you buy them through Schwab. Some firms custody them at Fidelity (advisory side) not the retail.

Our firm uses Schwab for DFA funds. The client does pay a higher commisison to Schwab because unlike almost any other fund family DFA doesn't pay anything back to Schwab to be on their platform. Many larger firms will block trade the funds and then divy them up in house to client accounts minimizing these fees.

There are many good firms that will take a flat fee for Dimensional funds. IMHO the funds themself are worth the money.

 

[LOL!]

There are many good firms that will take a flat fee for Dimensional funds. IMHO the funds themself are worth the money.

I've always been attracted to DFA funds. I guess I noticed them first whenever I ran a screen to select funds. I usually look for a high Sharpe ratio, excellent performance, low expense ratio and good M* ratings. The top results are always polluted with DFA funds.

But I've never wanted in particular to pay 1% to an advisor to get into them. If the fee dropped to sub-0.5%, I would consider them, but I am left with the unpalatable tax bite of selling existing ETFs and Vanguard funds in my taxable accounts to make the switch.

Now when we quit our jobs, then our 401(k)s become available for this fund family without the tax hit. Also, the current average expense ratio on our qualified plans is larger than what DFA+advisor fees would be, so then the rollover to DFA is practically a no-brainer. Or should we just rollover to Vanguard?

 

[saluki9]

I've always been attracted to DFA funds. I guess I noticed them first whenever I ran a screen to select funds.

Now when we quit our jobs, then our 401(k)s become available for this fund family without the tax hit. Also, the current average expense ratio on our qualified plans is larger than what DFA+advisor fees would be, so then the rollover to DFA is practically a no-brainer. Or should we just rollover to Vanguard?

Depending on the size of your rollover, you may be better off with a flat fee. Some firms let you have the funds for a $1000 - $1500 flat fee per year. I've even heard of one that offers them for a one time flat fee.

 

[LOL!]

A few years ago, I contacted DFA directly. They gave me a list of advisors near my ZIP code that they worked with. I interviewed one of those folks and was unimpressed. They were not one of the low-fee firms.

So how would I find one of these firms?

 

[Spanky]

A few years ago, I contacted DFA directly. They gave me a list of advisors near my ZIP code that they worked with. I interviewed one of those folks and was unimpressed. They were not one of the low-fee firms.

So how would I find one of these firms?

Check out Evanson Asset Management. Their fee structure is reasonable. A recommended minimum is $1 million, but they consider exception.

 

[LOL!]

Check out Evanson Asset Management. Their fee structure is reasonable. A recommended minimum is $1 million, but they consider exception.

A million or three should be no problem.

 

[Alex]

A few years ago, I contacted DFA directly. They gave me a list of advisors near my ZIP code that they worked with. I interviewed one of those folks and was unimpressed. They were not one of the low-fee firms.

So how would I find one of these firms?

you could always read my previous post on this thread - I named (and provided a web site address) an advisor that charges an annual fee of $800-1600 per year billed quarterly. Or not.....

 

[LOL!]

alex, yep, thanks I saw that. I have three or four firms to choose from, but would like more and perhaps one in my neck of woods: Houston.

 

[haha]

you could always read my previous post on this thread - I named (and provided a web site address) an advisor that charges an annual fee of $800-1600 per year billed quarterly. Or not.....

The joy of giving must be found within the giver, not in the gratitude of the gifted.

Ha