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Fund Fees Barely Budge

On 10/31/2011, in Investment Strategies, by Jordan Wilson

I am a proponent of passive investing.

That means investing in passively managed index funds that track a specific market sector. Primarily, exchange traded (ETF) or open ended mutual index funds.

Research indicates that actively managed portfolios tend not to perform better than passive portfolios. And actively run portfolios cost investors more money in fees and expenses than passive.

So why take an active approach? 

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For most individual investors, I believe that a passively managed, well diversified investment portfolio is the best approach for long term success.

I do not believe that paying higher fees for active management brings superior results over the long run. Instead, minimize investment costs and stick to index funds for the majority of investments. Let portfolio returns compound in your investment account, not in the pocket of an investment advisor or financial institution.

I have written extensively as to why I believe in this strategy.

Today, a little more evidence that a passive approach outperforms an active one. 

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Another Case for Passive Investing

On 07/11/2011, in Investment Strategies, by Jordan Wilson

Everyday I see reminders of why investors should passively invest their wealth.

Today it comes from this Bloomberg story, Economists Cite Seasonal Variations for Jobs MissThe key takeway for me in the article is:

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One Way to Beat the Market

On 06/09/2011, in Investment Concepts, by Jordan Wilson

I have previously written that it is questionable whether professional asset managers can consistently beat their markets.

As such, I normally recommend passive investing for most individuals.

But I did recently read of one way to beat the market. 

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Money Making Mistakes

On 06/01/2011, in Investment Strategies, by Jordan Wilson

Some interesting examples of money making mistakes courtesy of CNNMoney.

Superficially, they each provide decent advice for individuals.

But they also provide deeper lessons for investors.

And an overall moral that applies to all examples. 

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Buy and Hold with Individual Stocks

On 04/17/2011, in Investment Strategies, by Jordan Wilson

A long-term buy and hold strategy can work with individual, non-diversified assets. For example, shares of Cisco or Swiss Re. Or General Electric Capital bonds. Or the Japanese Yen.

But I would not recommend it.

Here is why. 

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Protection From Volatile Markets

On 04/12/2011, in Investment Strategies, by Jordan Wilson

A potentially legitimate concern about buy and hold investing is that it underperforms active management during fluctuating and bear markets.

Today we will review how to protect your wealth during periods of market volatility when using buy and hold.

A few points come from my general long-term investment philosophy. One that attempts to build such safeguards automatically into one’s portfolio.

A few other thoughts will involve tweaks to the traditional buy and hold methodology. Tweaks that hopefully will improve on its performance. 

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Defending Buy and Hold

On 04/08/2011, in Investment Strategies, by Jordan Wilson

In my last post, I listed three legitimate concerns about the buy and hold strategy.

Buy and hold will not allow for the maximum possible returns, it does not protect one’s wealth in down markets, and it does not work for short to medium holding periods.

Definitely areas to watch out for, but less of a problem than some articles state.

I will explain why below. 

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Legitimate Buy and Hold Concerns

On 04/05/2011, in Investment Strategies, by Jordan Wilson

In our last post, we looked at a few commonly perceived negatives on the buy and hold investment strategy.

Some of the minor complaints.

Today we will review more legitimate concerns. 

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Actively Managed ETFs

On 12/06/2010, in Exchange Traded Funds, by Jordan Wilson

To date, we have focussed on passively managed exchange traded funds (ETFs).

But ETFs may also be actively managed.

Quite a new development, but some investors consider them a sexy investment.

You can decide by the end of this post how attractive they are for your portfolio.

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