I just bought VFINX today

[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]

Originally Posted by REWahoo!

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]

Originally Posted by tricky88

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]

Originally Posted by AirJordan

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]

Originally Posted by 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 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]

Originally Posted by AirJordan

NYL, here's a good primer on them

http://www.thestreet.com/funds/mutua.../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]

Originally Posted by 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.

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!]

Originally Posted by saluki9

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]

Originally Posted by LOL!

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]

Originally Posted by 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?

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

[LOL!]

Originally Posted by Spanky

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]

Originally Posted by 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?

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.