Re: Anyone see Scott Burns column yesterday ?
Yes, I had read the TAM Asset Management article previously as well. I think several points mentioned above, by Ted and various responders, are quite appropriate:
It is written by a paid investor advisor firm; however they tout both DFA and Vanguard. I think that the article is somewhat tongue in cheek, about the 'problem' with index funds. While it does mention a problem, the author asserts he still favors of index funds and asset allocation over managed funds. In fact from their 'investments page':
There are several reason why we use index funds to implement our asset class strategies:
* "active" money managers consistently fail to beat unmanaged indexes
The article is more about the pitfalls that go with a fund that is tracking a 'transparent' index, vs. the advantage DFA has in creating their own asset class index. Go ahead and read the article. I think the points about composition of an index and about the ability of investors to trade off of changes in the index are quite valid. However he fails to mention the flipside - what are the disadvantages of a proprietary index? I'm sure we can think of some!
However DFA seems to be well respected as an indexing/asset allocation/passive investing set of funds. In spite of my adversion to 'trust me', they sound reasonable. Swedrowe also mentions them in his books, and I like his (and Bogle's) approach.
I don't use a CFP, or management company, but if I were to plan on using one, this is one I would investigate more carefully. For now, I like reading their newsletters - maybe I'm becoming a newletter junkie....I've sure been reading a lot lately. (not the infomercial ones though!)
wabmaster - way to get the thread going!
Wayne