Comments on: More picking on mutual funds http://www.madetostick.com/blog/2008/09/22/more-picking-on-mutual-funds/ Made to Stick Blog by Dan and Chip Heath Thu, 13 Nov 2008 05:22:57 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Hunter W http://www.madetostick.com/blog/2008/09/22/more-picking-on-mutual-funds/comment-page-1/#comment-17934 Hunter W Thu, 09 Oct 2008 16:03:46 +0000 http://www.madetostick.com/blog/2008/09/22/more-picking-on-mutual-funds/#comment-17934 Guys -- you still haven't addresssed how applying asset allocation theory to purchasing mutual funds out performs index funds. You're doing a great job of framing a small part of the issue and making it out to be the whole issue. You're using a "ring around the collar" arguement to make your point. Guys — you still haven’t addresssed how applying asset allocation theory to purchasing mutual funds out performs index funds. You’re doing a great job of framing a small part of the issue and making it out to be the whole issue. You’re using a “ring around the collar” arguement to make your point.

]]> By: matt m http://www.madetostick.com/blog/2008/09/22/more-picking-on-mutual-funds/comment-page-1/#comment-16248 matt m Tue, 23 Sep 2008 19:10:36 +0000 http://www.madetostick.com/blog/2008/09/22/more-picking-on-mutual-funds/#comment-16248 For me it's really simple. 1) Fidelity Contrafund, for example, has beat the S&P 500 over the past 10 years by a wide margin that exceeds the expense ratio. 2) The S&P 500 index doesn't provide access to the world markets where much growth is likely to occur over the next 25 years. 3) Keeping all of your money in stocks as you begin retirement is a bad idea as you are no longer buying during the down years. 4) Past performance is no indication of future gains. A stock only portfolio gives you no protection against this. 5) Excessive ownership of the index creates a market distortion (non fundamentals based ownership) that others can take advantage of. For me it’s really simple.

1) Fidelity Contrafund, for example, has beat the S&P 500 over the past 10 years by a wide margin that exceeds the expense ratio.
2) The S&P 500 index doesn’t provide access to the world markets where much growth is likely to occur over the next 25 years.
3) Keeping all of your money in stocks as you begin retirement is a bad idea as you are no longer buying during the down years.
4) Past performance is no indication of future gains. A stock only portfolio gives you no protection against this.
5) Excessive ownership of the index creates a market distortion (non fundamentals based ownership) that others can take advantage of.

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