Vanguard Investment Funds

I like Vanguard investment funds for long term individual investors.

Especially investors who follow a passive management style.

As I am not directly or indirectly compensated in any way by Vanguard I recommend them based solely on their merits.

That is not to say that other funds are poorer choices. I recommend a wide variety depending on a client’s investment objectives, desires, and available offering in their home jurisdiction. I believe in a “best of breed” approach for clients, not what is best for my revenue. And within the “best of breed” options, Vanguard funds pop up with regularity.

Why is this so?   (more…)

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.  (more…)

Index benchmarks for passive investment management are an ideal fit.

And quite easy to implement.

After all, with passive investing you are simply trying to replicate the market (as represented by the relevant index). So it is simple to find an index for comparative purposes.

But there are a few things to remember when benchmarking under a passive approach.  (more…)

Life Cycle ETFs

Today we will look at life cycle or target date funds.

In this post we will focus on exchange traded funds (ETFs). But be aware that there are also life cycle mutual funds.

Some technical differences between the two, but the fundamental principles are the same. (more…)

Actively Managed ETFs

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. (more…)

A goal of passive investing is to match the market return as closely as possible.

However, it is not a given that a passively structured investment will match the market. In fact, there may be material variations between different investments and the benchmark index.

Index funds (both mutual and exchange traded) are typical passive investments. Here is why they do not normally match their benchmarks. (more…)

The Keys to Passive Investing

Okay, so hopefully we agree that passive investing is generally the best route for individuals wanting to invest over the long term.

This post outlines the steps to build a passively managed portfolio that meets your needs.

We will flesh out some of these steps in November.

There are three keys to passive investing.   (more…)

Passive and Active Investing

We will look at the active versus passive management debate.

Today we shall differentiate the two strategies.

Then we shall shall see if one strategy is preferable when investing.   (more…)

Squeezing the Lemon

Apologies to anyone expecting a post about my favourite beverage, the Caipirinha.

Yes, that would be a good post. But it would require limes, not lemons.

Rather, this follows on from How to Become a Billionaire. In that post, I mentioned how “squeezing the lemon” could reduce costs, thereby improving profitability.

Now I want to provide a simple example of the relationship between cost, revenue, and profitability. (more…)

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