The best investment advice you'll never get

[jeffrey]

For 35 years, Bay Area finance revolutionaries have been pushing a personal investing strategy that brokers despise and hope you ignore. The story of a rebellion that's slowly but surely putting money into the pockets of millions of Americans, winning powerful converts, and making money managers from California Street to Wall Street squirm...

San Francisco magazine

[sweeps]

For 35 years, Bay Area finance revolutionaries have been pushing a personal investing strategy that brokers despise and hope you ignore. The story of a rebellion that's slowly but surely putting money into the pockets of millions of Americans, winning powerful converts, and making money managers from California Street to Wall Street squirm...

San Francisco magazine

Wow, that is a long article. Admittedly I didn't read the whole thing, but I agree with the thesis.

[jc3900]

Yeah definitely agree with the article. Very long, so I didn't bother reading the whole thing either. Being greedy, I always wonder if there is a way to enhance indexing and low cost mutual funds to beat the street. Does anyone know how portfolio re-balancing and dollar cost averaging affect your investment outcome. Is anyone out there greedy like me and searching for ways to make indexing more powerful than just getting the market return, even though that is in essence the goal of indexing.

[money2008]

Apparently there may be some strategies that use index options and can provide better than market returns in long run. Tristan Yates has written quite a bit about "Indexing on steroids" and can be found on "indexroll.com"

[Aleta]

Great article. That's why I like Vanguard's Total Stock Market Index Fund for the reasons mentioned in the article. You have a large diverification and low fees. Indexing is great for bonds as well.

[Broken Arrow]

Er, I haven't read the whole thing either (yet), but seriously, you have to read the Boglehead's Guide to Investing. I think it'll help a lot of people here.

[Joan.of.the.Arch]

Goodness, folks, the article isn't that long. The original font size was too small, so I just increased that for easier reading and then the article doesn't seem too long. But then, I'm not trying to squeeze it in on my break at work.

Okay: index funds. But ever more in my mind these days is the notion that no economy is an island unto itself. Thus while reading I kept wondering, "Yes, but how do we include investing in the rest of the world?" Investing in US stocks, funds, indexes will still reap some of the rises (and falls) of the rest of the world, but in this day and age, should we be looking to index the whole world?

A little philosophical bit that occurs to me is this question: Could it be that every American has a birthright to something like an indexed ownership of the markets? Our economic system is, after all, not only dependent on it, but set up to favor and enable capitalism, markets. But I like to think that the fundamental reason for that is for the benefit of the citizen. You know-- government of the people, by the people, for the people. How about if we make the "for the people" part a little more direct when it comes to governing the markets. Every citizen gets some sort of index fund just by virtue of being a citizen?

Maybe we could say that citizens already reap the benefits of the existence of the markets simply by living here in the midst of the economy they are part of. And by benefit of the taxes that are generated at all points along the line, taxes which then provide services to all.

[Aleta]

Joan.of.the.arch: I think that what the article is saying is that alot of times we pay absorbent fees to brokers who don't always do as well as the stock index's do. When you have a retirement fund, it normally contains, broad based index stock funds, a total bond fund index, a small % in the International stock fund index, and some have security inflation indexes. The idea is to have some exposure in the international commnunity as well as our country to take advantage of the different indexes.

Regardless of what was said in the article, there will be those that will always think that they can beat the market.

[Joan.of.the.Arch]

Ah, I got the point about managed investments costing more. I didn't think the article was necessarily comparing index funds to "retirement" investing alone....And then my thoughts just went riding some other little waves (ripples) anyway.

[Aleta]

You're right, it wasn't talking about retirement funds, but I used it as an example of the different index funds that are used even in a retirement fund. You really don't need to make those accounts retirements for 401 or IRA's. I was told by their reps that some people sign up for long term savings because they like the diversification and don't want to have to rebalance their funds constantly.

[LuxLiving]

Joan, I'm a little late to this party and I haven't gone to read the attached article yet, but there are global indexes on the market.

[Aleta]

LuxLiving: One of the things that I like about the Vanguard Retirement Fund is that they are all indexed and you have different exposures to international market indexes as well.