Early Retirement & Financial Independence Community - View Single Post - Can anyone realistically generate long-term alpha?

jIMOh · 05-17-2007, 09:06 AM

I use active funds for most of my portfolio.

I believe I can generate above average returns with some intelligence and thought. All managed funds are NOT created equal.

I have several managed funds with expenses less than .75%... I realize this might be 4X the amount on VFINX (.18%), but I also did much better in 2000-2002, and the index still has not caught up. I am ahead of index this year, and was ahead of index last year... and one of my funds has beaten index for last 5-7 years.

My large cap funds own many of the same stocks as the S&P 500 index funds, but not all the stocks in the index, so I have some of the upside and avoid a significant amount of the downside.

Indexing to some is a religion... I will live or die broke based on my investment decisions... I choose to put a manager in charge of this... not some independant company (S&P) to choose my stocks for me.

I know my fund manager. Do you know anyone on the committee to choose which stocks are in the S&P 500?

I know how my fund manager picks stocks (based on his 10+ years tenure with T Rowe Price and record of investing). How does the committee mentioned above choose the 500 companies in the index. It is NOT the 500 biggest, it is NOT the 500 fastest growing. It has the "biggest of the big", but it is not the 500 largest, so I am skeptical of subjective criteria for an unknown committee to add stocks to the index.

For the record my two core fund are

PRFDX
PRWCX

I also own

PRNHX
PRIDX
PREMX
RPMGX

and my wife owns
TRIGX
TROSX

These are the core of our Roths- we have other funds in our 401ks.

05-17-2007, 09:06 AM	#6
jIMOh Thinks s/he gets paid by the post Join Date: Apr 2007 Location: Milford, OH Posts: 1,341	I use active funds for most of my portfolio. I believe I can generate above average returns with some intelligence and thought. All managed funds are NOT created equal. I have several managed funds with expenses less than .75%... I realize this might be 4X the amount on VFINX (.18%), but I also did much better in 2000-2002, and the index still has not caught up. I am ahead of index this year, and was ahead of index last year... and one of my funds has beaten index for last 5-7 years. My large cap funds own many of the same stocks as the S&P 500 index funds, but not all the stocks in the index, so I have some of the upside and avoid a significant amount of the downside. Indexing to some is a religion... I will live or die broke based on my investment decisions... I choose to put a manager in charge of this... not some independant company (S&P) to choose my stocks for me. I know my fund manager. Do you know anyone on the committee to choose which stocks are in the S&P 500? I know how my fund manager picks stocks (based on his 10+ years tenure with T Rowe Price and record of investing). How does the committee mentioned above choose the 500 companies in the index. It is NOT the 500 biggest, it is NOT the 500 fastest growing. It has the "biggest of the big", but it is not the 500 largest, so I am skeptical of subjective criteria for an unknown committee to add stocks to the index. For the record my two core fund are PRFDX PRWCX I also own PRNHX PRIDX PREMX RPMGX and my wife owns TRIGX TROSX These are the core of our Roths- we have other funds in our 401ks. __________________ Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.