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  1. <?xml version='1.0' encoding='UTF-8'?><?xml-stylesheet href="http://www.blogger.com/styles/atom.css" type="text/css"?><feed xmlns='http://www.w3.org/2005/Atom' xmlns:openSearch='http://a9.com/-/spec/opensearchrss/1.0/' xmlns:blogger='http://schemas.google.com/blogger/2008' xmlns:georss='http://www.georss.org/georss' xmlns:gd="http://schemas.google.com/g/2005" xmlns:thr='http://purl.org/syndication/thread/1.0'><id>tag:blogger.com,1999:blog-1458095903302674663</id><updated>2024-04-20T04:00:51.983-05:00</updated><category term="investing strategies"/><category term="retirement"/><category term="Vanguard"/><category term="asset allocation"/><category term="book review"/><category term="Schwab"/><category term="Fidelity"/><category term="articles"/><category term="bond investing"/><category term="investing tools"/><category term="market conditions"/><category term="fund offerings"/><category term="market timing"/><category term="personal finance"/><category term="Q and A"/><category term="TD Ameritrade"/><category term="brokerage firms"/><category term="business"/><category term="marketing"/><category term="sector assessments"/><category term="sector investing"/><category term="stock picking"/><title type='text'>Investing Guy</title><subtitle type='html'>Tips, Analysis, and Ramblings About Individual Investing and Personal Finance</subtitle><link rel='http://schemas.google.com/g/2005#feed' type='application/atom+xml' href='http://investingguy.blogspot.com/feeds/posts/default'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/'/><link rel='hub' href='http://pubsubhubbub.appspot.com/'/><link rel='next' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default?start-index=26&amp;max-results=25'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><generator version='7.00' uri='http://www.blogger.com'>Blogger</generator><openSearch:totalResults>47</openSearch:totalResults><openSearch:startIndex>1</openSearch:startIndex><openSearch:itemsPerPage>25</openSearch:itemsPerPage><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-8776359365895901985</id><published>2011-01-06T13:11:00.004-06:00</published><updated>2011-01-06T16:25:48.224-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="business"/><category scheme="http://www.blogger.com/atom/ns#" term="marketing"/><title type='text'>Branding and Starbucks&#39; New Logo</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Starbucks recently &lt;a href=&quot;http://blogs.wsj.com/deals/2011/01/05/jolt-starbucks-shares-like-gap-dump-the-new-logo/&quot;&gt;decided to modify&lt;/a&gt; their well-known logo, dropping the Starbucks Coffee border, enlarging the emblematic siren/mermaid, and making it all Starbucks green.&amp;nbsp; They&#39;re attempting to &quot;modernize&quot; the image and allow for the possibility of introducing non-coffee items in the future under the Starbucks brand as well as providing more emphasis on the fact that their products can be found in supermarkets and other settings besides its own retail stores.&lt;/span&gt;&lt;/div&gt;&lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;http://i2.cdn.turner.com/money/2011/01/05/news/companies/starbucks_new_logo/starbucks_new_logo.top.jpg&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;272&quot; src=&quot;http://i2.cdn.turner.com/money/2011/01/05/news/companies/starbucks_new_logo/starbucks_new_logo.top.jpg&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  3. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Source: CNN Money, courtesy of Starbucks&lt;/td&gt;&lt;/tr&gt;
  4. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt; &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  5. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;There has been a &lt;a href=&quot;http://money.cnn.com/2011/01/05/news/companies/starbucks_new_logo/index.htm&quot;&gt;backlash &lt;/a&gt;from some Starbucks aficionados as some are hesitant to change, especially when it has remained the same for the past 20 years.&amp;nbsp; Some like the new design, though, and the backlash is nothing compared to Gap&#39;s similar &lt;a href=&quot;http://money.cnn.com/2010/10/12/news/companies/gap_logo/index.htm?iid=EAL&quot;&gt;decision &lt;/a&gt;a few months ago, wherein they eventually stripped the new logo and reverted back to their original.&amp;nbsp; In the case of Gap, however, they completed abandoned their brand with the new logo, in my mind.&amp;nbsp; It was terrible business decision although some &lt;a href=&quot;http://blogs.wsj.com/deals/2011/01/05/jolt-starbucks-shares-like-gap-dump-the-new-logo/&quot;&gt;speculate &lt;/a&gt;it was publicity stunt to simply gain attention and the new logo was never intended to be adopted - to which Gap denies this conspiracy theory.&amp;nbsp; &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  6. &lt;/div&gt;&lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  7. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;http://i2.cdn.turner.com/money/2010/10/12/news/companies/gap_logo/gap_logo.top.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;205&quot; src=&quot;http://i2.cdn.turner.com/money/2010/10/12/news/companies/gap_logo/gap_logo.top.gif&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  8. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Source: CNN Money&lt;/td&gt;&lt;/tr&gt;
  9. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Gap&#39;s stock performance up to the date of the logo unveiling was down 12% for the year.&amp;nbsp;&amp;nbsp; A week later, they announced they were dropping it, and its stock has been up 21% since that point through 1/5/2011 (GPS is down a whopping 8% today, by the way).&amp;nbsp; Obviously, its reversion back to its old logo isn&#39;t necessarily why the stock has performed well (correlation and causation are not nearly the same), especially considering competitors like Abercrombie, Urban Outfitters, and J Crew are up similarly over the same period (although American Eagle hasn&#39;t been so fortunate).&amp;nbsp; However, it&#39;s always a good thing when you get consumers to think about your brand and its identity (assuming it has been a positive one).&amp;nbsp; Perhaps bringing the possibility of the change to the forefront in the minds of many individuals, Gap consumers sought to seek out the brand again once it symbolically rededicated itself to its core principles.&amp;nbsp; While the backlash may have hurt sentiment from a managerial and marketing confidence standpoint, simply getting into the discussion again does seem to reap positive rewards.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  10. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Gap&#39;s  main downfall in the logo decision, in my opinion, was attempting to almost rebuke their old identity.&amp;nbsp; Changing the font, the color of the font, and the style  completely seemed to disregard its existing brand rather then building upon it for the future.&amp;nbsp; They abandoned the classic identity and thus would  potentially alienate existing consumers.&amp;nbsp; If you have a decently strong  brand following, that&#39;s the worst thing you can do.&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt; &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  11. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Some argue that the &quot;Starbucks Coffee&quot; text amounted to millions of dollars in free advertising as consumers walk around with drinks in hand - while true, the new logo is readily identifiable (perhaps moreso due to the enlarging of the image) to their intended audience so I don&#39;t think the &quot;losing free advertising&quot; argument holds that much water.&amp;nbsp; Starbucks really doesn&#39;t advertise through any &lt;i&gt;paid &lt;/i&gt;means (print, TV, etc.) and they don&#39;t need to because of the army of consumers that walk around with their easily recognizable products in hand.&amp;nbsp; Some firms branding is not dependent on being plastered on TV and billboards - much like Five Guys has recently exploded despite not advertising.&amp;nbsp; Five Guys delivers a product that fulfills a niche - all natural thick Idaho potato french fries and all-beef patties made to order that satisfies the gap in the marketplace between super fast-food fries and burgers and more upscale sit-down restaurants.&amp;nbsp; They have simply found the neglected niche, made a good product, and delivered results.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  12. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Starbucks new logo is similar to Gatorade dropping the full &quot;Gatorade&quot; text on the lighting bolt. Gatorade now simply has a &quot;G&quot; with the lightning bolt, sticking to their identifiable past with the lightning bolt with a simpler G identifying the brand.&amp;nbsp; (Although I&#39;m not too sure about their branding themselves as &quot;G&quot; when talking about the product in ads - it&#39;s a simply a letter, but that&#39;s another topic all together as it&#39;s unrelated to the logo change).&amp;nbsp; Starbucks likewise stays true to their roots with the same stylized mermaid, in the same green color, while expanding their markets to possible non-coffee ventures, enlarging the image further to make it even more visible (since there is no longer a border taking up space).&amp;nbsp; I think the new Starbucks logo will stick for these reasons unlike the Gap one.&amp;nbsp; Whether the logo change is better than leaving it alone from a business standpoint is certainly up for debate &lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;and only time will tell if it stands the test of public scrutiny.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  13. &lt;/span&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://img442.imageshack.us/img442/7131/gatoradeoldandnew.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;197&quot; src=&quot;http://img442.imageshack.us/img442/7131/gatoradeoldandnew.jpg&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  14. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;This   post isn&#39;t investing-related exactly, but relates to business and   company branding and marketing.&amp;nbsp; Obviously, such decisions can have an   impact of stock price and public perception so I thought it&#39;d be  interesting to mention it.&amp;nbsp; Plus, I never promised all posts would be  directly about investing.&amp;nbsp; While I still think the vast majority of  individual investors are best served by investing in low-cost index  funds, those with the desire or inclination to augment their holdings  with individual stocks need to pay attention to company reputation,  which is certainly affected by branding.&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  15. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  16. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;A  company&#39;s brand is perhaps its most valuable commodity.&amp;nbsp; While it  certainly must provide a product or service consumers desire - and  Starbucks did that by revolutionizing the American coffee house and  offering items previously unheard of to the American consumer - the  reputation of the brand propels a good business with a good product into  a great business.&amp;nbsp; If Nike all of a sudden developed a new line of Air  Jordans that had a defective sole that wore out in less than a month, it  would still sell like hotcakes initially simply due to the Nike and Air  Jordan brands.&amp;nbsp; Nike has widespread appeal to their intended  (widespread) demographic and have developed a product that has  consistently exceeded consumers&#39; expectations.&amp;nbsp; It also has a &quot;cool&quot;  factor, which doesn&#39;t hurt one bit.&amp;nbsp; Based on this historical data,  consumers assume the brand will continue to deliver exceptional  results.&amp;nbsp; Eventually, however, a poor product will catch up to the brand  and its reputation would subsequently suffer.&amp;nbsp; That&#39;s why maintaining a  positive reputation is essential to a good business model as it  delivers repeat customers and referrals. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  17. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;On  this note, if you do intend to choose individual companies to invest  in, not only must they have a product that others desire, but having a  good brand and reputation is key to continued financial and stock price  success.&amp;nbsp; That&#39;s why I encourage people to seek &quot;best of breed&quot;  companies.&amp;nbsp; If you&#39;re interested in a particular sector - say fast-food  industry - one must not only look at the financial statements and  valuation metrics, but its general perception among the intended  demographic.&amp;nbsp; If McDonald&#39;s and Burger King had the same fundamentals,  I&#39;d rather own MCD - its brand is simply stronger at this point in time  in my mind.&lt;/span&gt;&lt;br /&gt;
  18. &lt;br /&gt;
  19. While I&#39;m certainly not a marketing or advertising expert, I find such  business decisions intriguing, and if you invest in individual  companies, you probably want to pay attention to how the company is  perceived &lt;i&gt;by its intended clients&lt;/i&gt;.&amp;nbsp; I want to emphasize that last  point.&amp;nbsp; A company like McDonald&#39;s needs to market its brand to appeal  to the masses, in particular to demographics where fast-food consumers  are more readily available.&amp;nbsp; On the other hand, while public perception  of a company like Goldman Sachs can have an effect on its stock price,  its financial well-being and long-term stock price will definitely be  more affected by its financial bottom line and perception of the firm  from its more high-rolling clientele.&amp;nbsp; Goldman Sachs doesn&#39;t need to  appeal to a 17-year old making minimum wage.&amp;nbsp;&lt;span style=&quot;font-size: small;&quot;&gt; &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  20. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Of  course, a logo is not the only marketing and branding a company does.&amp;nbsp;  But its importance cannot be understated as it&#39;s truly the identifier of  the firm.&amp;nbsp; Starbucks gets a ridiculous amount of free advertising  simply by consumers being on-to-go with a cup saying &quot;Starbucks Coffee&quot;  on the side.&amp;nbsp; While removing the company name gets rid of this free  by-name advertising, the Starbucks mermaid/siren has become so ubiquitous and  well-known that Starbucks can pull it off without any adverse affects,  in my opinion.&amp;nbsp;&amp;nbsp; Much like Nike&#39;s swoosh - it has a simply elegance where  the name is not needed.&amp;nbsp; People just know the swoosh and that leads to even more  allure perhaps.&lt;/span&gt;&lt;/div&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  21. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;On a somewhat different topic, I recall an engineering dean talking about reputational surveys and rankings.&amp;nbsp; She was saying that Georgia Tech could essentially eliminate half of its labs and faculty and people would &lt;i&gt;still &lt;/i&gt;rank it highly because of its perceived level of historical excellence over the long-term.&amp;nbsp; While cutting corners might eventually cost Georgia Tech its reputation as an engineering powerhouse, in the short-term administrators and students would give it the benefit of the doubt due to its established brand.&amp;nbsp;&amp;nbsp; Brand significance spans beyond the corporate marketing world.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  22. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;A company&#39;s reputation and brand is perhaps its most significant commodity to continued success and growth.&amp;nbsp; While quantitatively analyzing such a variable proves extremely difficult, I thought it would be an interesting topic to explore in this post.&amp;nbsp; While financials of a company tell an important story, the public perception of the firm cannot be overemphasized.&amp;nbsp; If a firm has a bad quarter, but perhaps its due to the recession or in a cyclical sector, as long as its brand is widely recognizable or positioned in such a manner to become that way, I would select it over another competitor all else being equal.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  23. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;There is no substitute for a positive reputation and brand.&amp;nbsp; Building one is key for a company&#39;s long-term success.&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8776359365895901985'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8776359365895901985'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2011/01/branding-and-starbucks-new-logo.html' title='Branding and Starbucks&#39; New Logo'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-2863883416427751960</id><published>2011-01-05T13:13:00.000-06:00</published><updated>2011-01-05T13:13:11.767-06:00</updated><title type='text'>Daniel Solin at Google</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Following is a nice video of Dan Solin, author of &lt;i&gt;The Smartest Investment Book You&#39;ll Ever Read, &lt;/i&gt;talking to Google employees about individual investing from a few years ago.&amp;nbsp; It&#39;s quite long, but certainly worthwhile if you&#39;re just starting out.&amp;nbsp; Nothing revolutionary, but provides a good framework for those coming up with an asset allocation plan; and keeps it very simple.&amp;nbsp; I came across it when checking out the &lt;a href=&quot;http://rwinvesting.blogspot.com/2010/11/how-to-become-diy-investor.html&quot;&gt;Do-It-Yourself (DIY) Investor&lt;/a&gt; blog.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  24. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;object height=&quot;385&quot; width=&quot;480&quot;&gt;&lt;param name=&quot;movie&quot; value=&quot;http://www.youtube.com/v/Y0LSG2omvEg?fs=1&amp;amp;hl=en_US&quot;&gt;&lt;/param&gt;&lt;param name=&quot;allowFullScreen&quot; value=&quot;true&quot;&gt;&lt;/param&gt;&lt;param name=&quot;allowscriptaccess&quot; value=&quot;always&quot;&gt;&lt;/param&gt;&lt;embed src=&quot;http://www.youtube.com/v/Y0LSG2omvEg?fs=1&amp;amp;hl=en_US&quot; type=&quot;application/x-shockwave-flash&quot; allowscriptaccess=&quot;always&quot; allowfullscreen=&quot;true&quot; width=&quot;480&quot; height=&quot;385&quot;&gt;&lt;/embed&gt;&lt;/object&gt;&amp;nbsp; &lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/2863883416427751960'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/2863883416427751960'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2011/01/daniel-solin-at-google.html' title='Daniel Solin at Google'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-8082987912618954561</id><published>2011-01-05T11:44:00.000-06:00</published><updated>2011-01-05T11:44:42.281-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Vanguard"/><title type='text'>Jack Bogle Interview</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Check out this &lt;a href=&quot;http://money.cnn.com/2010/12/31/pf/investing/jack_bogle.moneymag/index.htm&quot;&gt;interview &lt;/a&gt;with the founder of Vanguard, Jack Bogle, courtesy of &lt;i&gt;Money Magazine.&amp;nbsp; &lt;/i&gt;Nothing unprecedented, but interesting nonetheless.&amp;nbsp; He says it&#39;s the most difficult time to invest in his career right now.&amp;nbsp; Here are two interesting excerpts of Bogle&#39;s thoughts.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  25. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;On the bond bubble:&lt;/span&gt;&lt;/div&gt;&lt;blockquote style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Bond yields at roughly 3% are so poor it&#39;s hard to believe. I wouldn&#39;t  call it a bubble, though, because if you hold for 10 years you will get  that 3%. &lt;/blockquote&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  26. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;Why indexing works&lt;/span&gt;:&lt;/div&gt;&lt;blockquote style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt; Indexing wins whether markets are efficient or inefficient. In an  inefficient market, a good manager may be able to win by five percentage  points a year over a decade. But  by definition, a bad manager must lose by the same amount. It all has  to average out. So even if the market is very inefficient, the index  will still capture your share of the market return.&amp;nbsp; So I don&#39;t  rely on the efficient-markets hypothesis. I go by the &quot;cost matters&quot;  hypothesis: Whatever the market returns, on average you will beat your  rivals if you lower your costs. And that&#39;s what index funds do.&lt;/blockquote&gt;&amp;nbsp;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Here&#39;s a video of Bogle talking about his inspiration: &lt;/span&gt;&lt;br /&gt;
  27. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  28. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;object classid=&quot;clsid:D27CDB6E-AE6D-11cf-96B8-444553540000&quot; height=&quot;356&quot; id=&quot;ep&quot; width=&quot;384&quot;&gt;&lt;param name=&quot;allowfullscreen&quot; value=&quot;true&quot; /&gt;&lt;param name=&quot;allowscriptaccess&quot; value=&quot;always&quot; /&gt;&lt;param name=&quot;wmode&quot; value=&quot;transparent&quot; /&gt;&lt;param name=&quot;movie&quot; value=&quot;http://i.cdn.turner.com/money/.element/apps/cvp/4.0/swf/cnn_money_384x216_embed.swf?context=embed&amp;videoId=/video/news/2010/11/09/n_vis_john_bogle.fortune&quot; /&gt;&lt;param name=&quot;bgcolor&quot; value=&quot;#000000&quot; /&gt;&lt;embed src=&quot;http://i.cdn.turner.com/money/.element/apps/cvp/4.0/swf/cnn_money_384x216_embed.swf?context=embed&amp;videoId=/video/news/2010/11/09/n_vis_john_bogle.fortune&quot; type=&quot;application/x-shockwave-flash&quot; bgcolor=&quot;#000000&quot; allowfullscreen=&quot;true&quot; allowscriptaccess=&quot;always&quot; width=&quot;384&quot; wmode=&quot;transparent&quot; height=&quot;356&quot;&gt;&lt;/embed&gt;&lt;/object&gt;&lt;/span&gt;&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8082987912618954561'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8082987912618954561'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2011/01/jack-bogle-interview.html' title='Jack Bogle Interview'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-1971357770528080512</id><published>2010-12-21T13:02:00.001-06:00</published><updated>2010-12-21T13:03:23.312-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="articles"/><title type='text'>Article: The Evolution of an Investor</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;This article is over three years old, but its story is quite interesting and its message profound so I thought I&#39;d link to it now.&amp;nbsp; It&#39;s the story of Blaine Lourd, who got rich as a stock bro&lt;span style=&quot;font-size: small;&quot;&gt;ker, but later changed hi&lt;/span&gt;s tune when he realized he was nothing more than a salesman pushing companies for no particular reason other than making money for himself.&amp;nbsp; He wasn&#39;t serving the best interest of his clients.&amp;nbsp; Eventually, he decided to take action and now only recommends Dimensional Fund Advisors&#39; index funds to his clients.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  29. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;It&#39;s a fairly lengthy piece, but definitely worth the read.&amp;nbsp; Check out &lt;a href=&quot;http://www.portfolio.com/executives/features/2007/11/19/Blaine-Lourd-Profile&quot;&gt;The Evoluation of an Investor&lt;/a&gt; by Michael Lewis, the financial journalist who has written for &lt;i&gt;Vanity Fair&lt;/i&gt; and &lt;i&gt;The New York Times Magazine&lt;/i&gt; as well as published several best-selling books, on portfolio.com.&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1971357770528080512'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1971357770528080512'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/12/article-evolution-of-investor.html' title='Article: The Evolution of an Investor'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-8794632260007464975</id><published>2010-12-14T15:14:00.002-06:00</published><updated>2010-12-14T15:20:22.223-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="bond investing"/><category scheme="http://www.blogger.com/atom/ns#" term="market conditions"/><title type='text'>Bond Bubble?  My Thoughts</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;http://www.masternewmedia.org/images/big_bubbles_blossom.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;136&quot; src=&quot;http://www.masternewmedia.org/images/big_bubbles_blossom.jpg&quot; style=&quot;height: 136px; width: 200px;&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;Somebody posed a question regarding the bond market in the comments section of another post, so I thought I&#39;d also clarify my thoughts on that matter in this post as well.  There has been a lot of talk about a bond bubble and investors are wary and seeking alternative investments.  Is that a wise course of action?&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  30. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;First, I think having the proper perspective on this issue is in order. Even in a doomsday scenario for bonds, the losses would pale into comparison to the potential losses and risk involved with investing in stocks.  To further illustrate this point, check out the Growth of $10,000 chart of Vanguard Total Bond Market (VBMFX) courtesy of Morningstar since 1986.&amp;nbsp; The blue line is VBMFX, while the orange is the average intermediate term bond fund, and the green line is the BarCap US Aggregate Bond Index.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  31. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Growth of $10,000 since 1986&lt;/span&gt;&lt;/div&gt;&lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  32. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;http://globalquote.morningstar.com/globalcomponent/GenerateFundChart.ashx?chart=quote&amp;amp;w=565&amp;amp;h=266&amp;amp;lan=en-US&amp;amp;reg=USA&amp;amp;tc=CU$$$$$USD&amp;amp;d=false&amp;amp;r=false&amp;amp;p=false&amp;amp;win=3&amp;amp;period=custom&amp;amp;range=1986-12-31%7C2010-12-14&amp;amp;cfg=scale:1%7CGF:7&amp;amp;ma=&amp;amp;ids=FOUSA00FQH:0P00002SXS:CU$$$$$USD:1:1:FO:1986-12-10:::B:USA%7C$FOCA$CI$$:$FOCA$CI$$:CU$$$$$USD:1:1:CA::::B:USA%7CXIUSA000MC:0P00001G5L:CU$$$$$USD:1:1:XI::::B:USA&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;300&quot; src=&quot;http://globalquote.morningstar.com/globalcomponent/GenerateFundChart.ashx?chart=quote&amp;amp;w=565&amp;amp;h=266&amp;amp;lan=en-US&amp;amp;reg=USA&amp;amp;tc=CU$$$$$USD&amp;amp;d=false&amp;amp;r=false&amp;amp;p=false&amp;amp;win=3&amp;amp;period=custom&amp;amp;range=1986-12-31%7C2010-12-14&amp;amp;cfg=scale:1%7CGF:7&amp;amp;ma=&amp;amp;ids=FOUSA00FQH:0P00002SXS:CU$$$$$USD:1:1:FO:1986-12-10:::B:USA%7C$FOCA$CI$$:$FOCA$CI$$:CU$$$$$USD:1:1:CA::::B:USA%7CXIUSA000MC:0P00001G5L:CU$$$$$USD:1:1:XI::::B:USA&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  33. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Source: Morningstar, Inc.&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  34. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;As you can see, it&#39;s been pretty smooth sailing and the volatility of such high-quality bonds is not that grave.&amp;nbsp; The most severe pullback was the big &quot;bubble&quot; of 1994, which produced a maximum loss of about 4%.&amp;nbsp;&amp;nbsp; Google Finance reports VBMFX&#39;s worst three-month return as -3.00%.&amp;nbsp; While we certainly could have a historic pullback, previous measures of risk and volatility are indeed helpful.&amp;nbsp; (Note that the average intermediate-term bond fund pulled back nearly 9% in late 2008 after the MBS mess.&amp;nbsp; Yet another illustration as to why high-quality index funds are the way to go.&amp;nbsp; Clearly, too many bond managers took unnecessary risk in the effort to reach for yield).&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  35. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Compare this total bond fund (blue line) to VFINX (Vanguard S&amp;amp;P 500; orange line) for even more perspective.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  36. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Growth of $10,000 since 1986&lt;/span&gt;&lt;/div&gt;&lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  37. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;http://globalquote.morningstar.com/globalcomponent/GenerateFundChart.ashx?chart=quote&amp;amp;w=955&amp;amp;h=266&amp;amp;lan=en-US&amp;amp;reg=USA&amp;amp;tc=CU$$$$$USD&amp;amp;d=false&amp;amp;r=false&amp;amp;p=false&amp;amp;win=3&amp;amp;period=custom&amp;amp;range=1986-12-31%7C2010-12-13&amp;amp;cfg=scale:1%7CGF:7&amp;amp;ma=&amp;amp;ids=FOUSA00FQH:0P00002SXS:CU$$$$$USD:1:1:FO:1986-12-10:::B:USA%7CFOUSA00FS1:0P00002SZH:CU$$$$$USD:1:1:FO:1976-8-31:::B:USA&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;177&quot; src=&quot;http://globalquote.morningstar.com/globalcomponent/GenerateFundChart.ashx?chart=quote&amp;amp;w=955&amp;amp;h=266&amp;amp;lan=en-US&amp;amp;reg=USA&amp;amp;tc=CU$$$$$USD&amp;amp;d=false&amp;amp;r=false&amp;amp;p=false&amp;amp;win=3&amp;amp;period=custom&amp;amp;range=1986-12-31%7C2010-12-13&amp;amp;cfg=scale:1%7CGF:7&amp;amp;ma=&amp;amp;ids=FOUSA00FQH:0P00002SXS:CU$$$$$USD:1:1:FO:1986-12-10:::B:USA%7CFOUSA00FS1:0P00002SZH:CU$$$$$USD:1:1:FO:1976-8-31:::B:USA&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  38. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Source: Morningstar, Inc.&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  39. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The decreases that were more apparent on the first graph have all but vanished when you compare it to the volatility of equities.&amp;nbsp; The bumps are nothing but small pebbles on the bond side.&amp;nbsp; So, while there is definitely risk involved in the bond market (I&#39;m not saying it always goes up), it&#39;s important to have the understanding that the risk is still paltry compared to stocks &lt;i&gt;even &lt;/i&gt;in this time of low interest rates.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  40. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Having said all that, I don&#39;t think investors&#39; concerns about the bond market are without merit.&amp;nbsp; We live in unusual times and find ourselves in unusual circumstances - on the surface, the cautionary tales about bonds at this point in time do seem to have some valid points as we have somewhat &quot;the perfect storm&quot; of conditions that would signal a bond bear market.&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  41. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;When interest rates rise (and they will undoubtedly rise unless we fall into a similar situation to Japan in the 1990s with low interest rates for a long period), your bond funds will take a hit in the short-term.&amp;nbsp;  The longer duration of the fund, the bigger the hit.&amp;nbsp;&amp;nbsp; However, as long as you hold your bond fund longer than the average duration, you should still end up ahead of the game and not have to really worry that you&#39;ll end up with a loss in the position over the long-term.&amp;nbsp; In this &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/bonds-rates-reality-headlines-01292010%20&quot;&gt;article &lt;/a&gt;from Vanguard, it is suggested that rising interest rates actually benefit investors over the long-term as long as you reinvest your interest income (&lt;a href=&quot;https://personal.vanguard.com/us/insights/article/bonds-rates-reality-headlines-01292010%20&quot;&gt;Bonds and rates: The reality behind the headlines&lt;/a&gt;, February 2010).&amp;nbsp; They provide the following data:&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  42. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Bond Fund Total Returns (annualized) &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt; &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; Change in yield&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; Year 1&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; Year 3&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; Year 5&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &amp;nbsp; &amp;nbsp; &amp;nbsp; &amp;nbsp; Year 7&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &amp;nbsp; &amp;nbsp; &amp;nbsp; &amp;nbsp; Year 10&lt;/span&gt;  &lt;/div&gt;&lt;table align=&quot;left&quot; border=&quot;1&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;MsoTableGrid&quot; style=&quot;border-collapse: collapse; border: medium none; margin-left: 6.75pt; margin-right: 6.75pt;&quot;&gt;&lt;tbody&gt;
  43. &lt;tr&gt;   &lt;td style=&quot;border: 1pt solid windowtext; padding: 0in 5.4pt; width: 1.7in;&quot; valign=&quot;top&quot; width=&quot;163&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Rising Interest Rates&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 63pt;&quot; valign=&quot;top&quot; width=&quot;84&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;-0.8%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 0.75in;&quot; valign=&quot;top&quot; width=&quot;72&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;1.8%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 55.8pt;&quot; valign=&quot;top&quot; width=&quot;74&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;3.5% &lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 52.2pt;&quot; valign=&quot;top&quot; width=&quot;70&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;4.2%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 0.75in;&quot; valign=&quot;top&quot; width=&quot;72&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;4.7% &lt;/span&gt;&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  44. &lt;tr&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 1.7in;&quot; valign=&quot;top&quot; width=&quot;163&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Constant Interest Rates&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 63pt;&quot; valign=&quot;top&quot; width=&quot;84&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;4.0%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 0.75in;&quot; valign=&quot;top&quot; width=&quot;72&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;4.0% &lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 55.8pt;&quot; valign=&quot;top&quot; width=&quot;74&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;4.0% &lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 52.2pt;&quot; valign=&quot;top&quot; width=&quot;70&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;4.0% &lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 0.75in;&quot; valign=&quot;top&quot; width=&quot;72&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;4.0% &lt;/span&gt;&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  45. &lt;tr&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; padding: 0in 5.4pt; width: 1.7in;&quot; valign=&quot;top&quot; width=&quot;163&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Falling Interest Rates&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 63pt;&quot; valign=&quot;top&quot; width=&quot;84&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;8.8%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 0.75in;&quot; valign=&quot;top&quot; width=&quot;72&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;6.2% &lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 55.8pt;&quot; valign=&quot;top&quot; width=&quot;74&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;4.5%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 52.2pt;&quot; valign=&quot;top&quot; width=&quot;70&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;3.8%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 0.75in;&quot; valign=&quot;top&quot; width=&quot;72&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;3.2%&lt;/span&gt;&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  46. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  47. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  48. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  49. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  50. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;i&gt;Source: Vanguard&lt;/i&gt;&lt;/span&gt; &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  51. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;You can read their assumptions in the attached article.&amp;nbsp; Essentially, though, they conclude that while falling interest rates lead to better performance in the short-term, consistently rising rates are actually better for long-term performance (7+ years) assuming investors stay the course and reinvest interest income.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  52. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;They conclude: &quot;[I]f you&#39;re holding bond funds as part of your long-term asset allocation, a rise in rates probably shouldn&#39;t prompt you to make any changes. Indeed, you can benefit by sticking with the bond allocation that&#39;s right for you.&quot;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  53. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Here are two more Vanguard articles with similar messages and talking about the current bond environment: &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/bond-bubble-08032010&quot;&gt;Should you beware of a bond bubble?&lt;/a&gt; (August 2010) and &lt;a href=&quot;http://www.vanguard.com/pdf/icrrol.pdf&quot;&gt;Risk of loss: Should investors shift from bonds because of the prospect of rising rates?&lt;/a&gt; (July 2010).&amp;nbsp; They have much the same message - don&#39;t fret about a bond bubble due to rising interest rates since over the long-term the small decrease will be more than compensated for.&amp;nbsp; They believe that i&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;ndividual investors are best served by maintaining their asset allocation and holding for the long-term, since reinvesting interest income will put you ahead.  This is undoubtedly true.  If you&#39;re a long-term investor, shouldn&#39;t you only be concerned with the long-term performance?&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  54. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;I&#39;ll provide a contrarian viewpoint courtesy of the Finance Buff&#39;s blog entry &lt;a href=&quot;http://thefinancebuff.com/2010/08/you-should-still-beware-of-a-bond-bubble.html&quot;&gt;You Should Still Beware of A Bond Bubble &lt;/a&gt;(August 2010).&amp;nbsp; He posits that if interest rates go up as expected, bond values will go down.  It doesn&#39;t matter that the losses are small compared to the potential losses in equities - it&#39;s still a loss.&amp;nbsp;  Shouldn&#39;t investors actively avoid such obvious potential losses?&amp;nbsp; And while it&#39;s true that reinvesting interest income in your bond funds over the long-term will benefit you in a rising interest rate environment, the Finance Buff argues that the returns would have been even better if you sidestepped the short-term rise in interest rates and invested in bonds at a slightly later time.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  55. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;I think both perspectives have a valid point.&amp;nbsp;  Interest rates are going to go up; it&#39;s just a matter of when.  When that occurs, your bond fund&#39;s NAV will take a hit.  The longer-term duration funds will take a larger hit than the shorter-term ones.  Over the long-term, this temporary hit will be compensated by reinvesting interest income at higher rates and you&#39;ll end up ahead if you stay the course.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  56. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Bonds are held as part of an individual&#39;s portfolio to moderate volatility and increase diversification.&amp;nbsp;  Thus, you shouldn&#39;t completely abandon your bond holdings nor switch to equities with that allocation under any circumstance. Nevertheless, if you are uncomfortable with potential for short-term losses in the bond portion of your portfolio, I think there are a couple viable alternatives.&amp;nbsp;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  57. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;First, you may elect to shorten the duration of your bond holdings.&amp;nbsp;  Instead of selecting a Total Bond Market Index fund (VBMFX has an average duration of 4.7 yrs), choose a short-term index like VBISX (2.6 yrs).  This will cut the potential for short-term losses in about half.&amp;nbsp; &lt;/span&gt;(Obviously this comes at the expense of expected  returns. There is no free lunch.)&lt;/div&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;&lt;br /&gt;
  58. For more information on how bond prices interact with interest rates, see this bogleheads article: &lt;a href=&quot;http://www.bogleheads.org/wiki/Bonds:_Advanced_Topics#Duration&quot;&gt;Bonds: Advanced Topics - Duration&lt;/a&gt;&lt;br /&gt;
  59. &lt;br /&gt;
  60. &quot;For  example, a bond with a duration value of 5 years would be expected to  lose 5% of its market value if interest rates rose by 1% (100 basis  points).&quot;&amp;nbsp; Thus, while the total bond fund might lose 5% of its value, the short-term index would lose only 2.5%.&amp;nbsp; These figures are not exact and for illustrative purposes as there are other factors that can affect such an outcome.&lt;br /&gt;
  61. &amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  62. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;Secondly, you may choose to use CDs as an alternative to your bond position. This is what the Finance Buff suggests.&amp;nbsp; You could also use a combination of short-term bonds and CDs.&amp;nbsp; I think that&#39;s a reasonable course of action. &amp;nbsp; Or even  all three positions if it&#39;s a significant sum of money - keep a total bond, short  term, and CDs.&amp;nbsp; Spread your money across the strategies.&lt;br /&gt;
  63. &lt;br /&gt;
  64. In the  end, while the above two options will probably reduce the chance for a  significant short-term pullback and you&#39;ll be less affected by the  potential &quot;bubble,&quot; you will &lt;i&gt;not &lt;/i&gt;be able to time it perfectly as to when  to get back in the bond market. Thus, you&#39;ll miss some opportunity and  whether you come out ahead (when compared to simply sticking with your previous asset allocation to total bond) will largely be determined by luck.&lt;br /&gt;
  65. &lt;br /&gt;
  66. Thus,  if you&#39;re simply interested in your long-term performance, it probably makes the most sense to stick to  your asset allocation plan. If you&#39;re concerned about short-term  volatility in the bond market and have discipline to jump back in, it&#39;s reasonable to shift to shorter  durations and/or CDs and then re-assess this position as time goes on.  Will you come out ahead of the other strategy? Maybe.&amp;nbsp; Will your short-term volatility be  decreased? Yes.&lt;/span&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8794632260007464975'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8794632260007464975'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/12/bond-bubble-my-thoughts.html' title='Bond Bubble?  My Thoughts'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-3241948104887877180</id><published>2010-10-08T12:24:00.001-05:00</published><updated>2010-10-19T15:55:47.074-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="brokerage firms"/><category scheme="http://www.blogger.com/atom/ns#" term="TD Ameritrade"/><title type='text'>TD Ameritrade Joins the Commission-Free ETF Train</title><content type='html'>&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/TK9TRd2p4TI/AAAAAAAAAg4/-M5NdViW3iY/s1600/TD-Ameritrade-logo.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: left; float: left; margin-bottom: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/TK9TRd2p4TI/AAAAAAAAAg4/-M5NdViW3iY/s1600/TD-Ameritrade-logo.png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;TD Ameritrade has &lt;/span&gt;&lt;a href=&quot;http://online.wsj.com/article/SB10001424052748704657304575539982015066398.html?mod=googlenews_wsj&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;followed&lt;/a&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt; the leads of &lt;a href=&quot;http://investingguy.blogspot.com/2009/12/schwab-now-offers-commission-free-etfs.html&quot;&gt;Charles Schwab&lt;/a&gt;, &lt;a href=&quot;http://investingguy.blogspot.com/2010/02/fidelity-strikes-back-reduces.html&quot;&gt;Fidelity&lt;/a&gt;, and &lt;a href=&quot;http://investingguy.blogspot.com/2010/05/vanguard-joins-price-war-free-vg-etf.html&quot;&gt;Vanguard &lt;/a&gt;to offer commission-free ETFs to its customers.&amp;nbsp; The firm will now offer over 100 ETFs commission free if held for at least 30 days.&amp;nbsp; These include the following:&lt;/span&gt;&lt;span class=&quot;postbody&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt; 47 iShare funds, 32 Vanguard funds, 12 State Street Global Advisors funds, 3 PowerShares funds, 2 Van Eck funds, 2 iPath funds, 1 WisdomTree fund, &lt;/span&gt;&lt;span class=&quot;postbody&quot;&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;1 Barclays Bank PLC fund, and 1 Deutsche Bank AG fund.&amp;nbsp; If held for less than 30 days (which should not happen for long-term investors anyways), TD Ameritrade will charge $19.99.&amp;nbsp; Competitive pressures are really getting to these firms!&amp;nbsp; This marks the only of the aforementioned four that is offering investors more than just funds from one particular family.&amp;nbsp; (You should have ample selection from the other three to create a low-cost diversified portfolio, so I wouldn&#39;t fret.)&amp;nbsp; Although &lt;a href=&quot;https://www.wellsfargo.com/investing/styles/wt/&quot;&gt;WellsTrade &lt;/a&gt;has done this for the past few years - offering 100 commission-free online trades (any stock or ETF) as long as it&#39;s linked to a PMA package (requires a $25,000 minimum).&amp;nbsp; Lots of great choices of brokerage firms now for the low-cost ETF investor.&lt;/span&gt;&lt;br /&gt;
  67. &lt;/span&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/3241948104887877180'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/3241948104887877180'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/10/td-ameritrade-joins-commission-free-etf.html' title='TD Ameritrade Joins the Commission-Free ETF Train'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://3.bp.blogspot.com/_a9FNMR19fkk/TK9TRd2p4TI/AAAAAAAAAg4/-M5NdViW3iY/s72-c/TD-Ameritrade-logo.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-2916237282182865929</id><published>2010-10-06T13:27:00.005-05:00</published><updated>2010-11-01T23:09:10.170-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Vanguard"/><title type='text'>Vanguard Reduces Minimum Required for Admiral Shares</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/TK9UItC6LVI/AAAAAAAAAg8/roEEBZnDsn0/s1600/vanguard-investments-tm-with-ship-logo.gif&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/TK9UItC6LVI/AAAAAAAAAg8/roEEBZnDsn0/s1600/vanguard-investments-tm-with-ship-logo.gif&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;span style=&quot;font-size: small;&quot;&gt;In yet another aggressive move, Vanguard has &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/fund-announcement-10062010&quot;&gt;announced &lt;/a&gt;that they&#39;re reducing the minimum amount required to qualify for Admiral shares.&amp;nbsp; Admiral shares are a separate share class included for more than 50 funds that hold the same investments as the investor shares, but charge significantly lower expenses - typically about the same as the ETF class (in some cases even lower though).&amp;nbsp; The minimums are now as follows:&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  68. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;$10,000 for most broad-market index funds;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;$50,000 for actively managed funds &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  69. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;Previously, to qualify for this share class required a $100,000 investment, so this is quite a substantial change.&amp;nbsp; This move makes sense in light of the fact that Vanguard ETFs now trade commission free through VBS, so those with smaller investments could previously get a lower expense by converting to the ETF class without any tax ramifications (due to Vanguard&#39;s unique fund/ETF structure).&amp;nbsp; Now, that conversion may not be necessary since one can acquire Admiral shares for basically the same cost as the ETF.&amp;nbsp; You can easily change the share class of your funds online by clicking on &quot;Convert an Account&quot; on the righthand side.&amp;nbsp; The cost basis information from your investor shares are transferred automatically, so you don&#39;t have to worry about tax ramifications.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;&amp;nbsp; &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Vanguard&#39;s mutual funds may be more appealing than ETFs to those who want to set up an automatic investing plan, don&#39;t want to place limit orders during the work day, and want to purchase at the NAV.&amp;nbsp; ETFs may appeal more to those who want the flexibility of intra-day trading and large lump-sum investors.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  70. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;This is great news!&amp;nbsp; The brokerage firms have really been pushing each other to improve their offerings with aggressive cost-cutting measures in the last couple years.&amp;nbsp; In the end, it&#39;s the individual investor who wins.&lt;/span&gt;&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/2916237282182865929'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/2916237282182865929'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/10/vanguard-reduces-minimum-required-for.html' title='Vanguard Reduces Minimum Required for Admiral Shares'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://3.bp.blogspot.com/_a9FNMR19fkk/TK9UItC6LVI/AAAAAAAAAg8/roEEBZnDsn0/s72-c/vanguard-investments-tm-with-ship-logo.gif" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-798646726797750647</id><published>2010-09-27T14:36:00.005-05:00</published><updated>2010-10-29T23:11:58.288-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Vanguard"/><title type='text'>Vanguard Adjusts International Equity in Target Retirement and Other Balanced Funds</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/TK9VbfxwnKI/AAAAAAAAAhI/ks9z1CFfowo/s1600/vanguard.GIF&quot; imageanchor=&quot;1&quot; style=&quot;clear: left; float: left; margin-bottom: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/TK9VbfxwnKI/AAAAAAAAAhI/ks9z1CFfowo/s1600/vanguard.GIF&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Vanguard has &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/fund-announcement-09272010&quot;&gt;announced &lt;/a&gt;that they&#39;re increasing international equity exposure of Target Retirement, LifeStrategy Funds, and the STAR Fund from about 20% of equities to approximately 30% of equities.&amp;nbsp;&amp;nbsp;&amp;nbsp; This is addition to the &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/announcement-QA-09272010&quot;&gt;move &lt;/a&gt;of holding Vanguard Total International Stock Index Fund (VGTSX) instead of &lt;span class=&quot;comp-Div&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;Vanguard European Stock Index Fund, Vanguard Pacific Stock Index Fund, and Vanguard Emerging Markets Stock Index Fund in the funds in an effort to simplify the holdings.&amp;nbsp; Lastly, this is all in conjunction with the &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/fund-announcement-09242010&quot;&gt;changes &lt;/a&gt;to the International Stock fund&#39;s change from tracking the &lt;/span&gt;&lt;span class=&quot;comp-Div&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;MSCI® EAFE + Emerging Markets Index to now tracking the MSCI All Country World ex USA Investable Market Index&lt;/span&gt;&lt;span class=&quot;comp-Div&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;.&amp;nbsp; The new index covers 98% of the world&#39;s non-US markets and includes small-capitalization companies as well as Canada and Israel unlike before.&amp;nbsp; Not only that but Vanguard plans to introduce 5 share classes of the fund, including an ETF (with a 0.20% ER).&amp;nbsp; Previously, one had to invest in&lt;/span&gt; FTSE All-World ex-US to get access to the ETF VEU (0.25% ER).&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  71. &lt;span style=&quot;font-size: small;&quot;&gt;Personally, I like the changes.&amp;nbsp; I always thought 20% international exposure was a bit low, especially considering Vanguard&#39;s own recommendation of 20-40%.&amp;nbsp; Here is Vanguard&#39;s rational courtesy of &lt;span class=&quot;postbody&quot;&gt;John Ameriks, &lt;/span&gt;&lt;span class=&quot;comp-Div&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;a Vanguard principal and head of Vanguard Investment Counseling&amp;nbsp;&amp;amp; Research&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;:&lt;/span&gt;&lt;/div&gt;&lt;blockquote style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;First, a  detailed quantitative analysis suggested that U.S. investors obtain  maximum diversification benefits when non-U.S. stocks make up 20% to 40%  of their equity portfolios. Related to that is the growth of non-U.S.  stocks as a percentage of the global equity market and the declining  costs of implementing and managing non-U.S. equity positions.&lt;/span&gt;&lt;br /&gt;
  72. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  73. &lt;/span&gt;&lt;br /&gt;
  74. &lt;span style=&quot;font-size: small;&quot;&gt;In addition, it is our view that we will be able to make  this change with minimal transaction costs to investors at this time.  Fundamentally, we believe that a modestly higher allocation to  international equities has the potential to improve diversification and  reduce volatility in these portfolios over the long term. Since 2006,  Vanguard has advocated that U.S. investors hold 20% to 40% of their  equity portfolios in non-U.S. stocks. We continue to hold that view, and  this change places these funds firmly in the middle of that range.&lt;/span&gt;&lt;/blockquote&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;While&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt; some may argue this is performance chasing (international markets have performed much better than US markets in the past decade), I would&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt; argue that their previous allocation was out of tune with their own research and the steadily increasing market capitalization of foreign markets (now 56% of the world market; if you want to track that, simply invest in VT).&amp;nbsp; In my mind, 30% is more reasonable to offer the &lt;i&gt;potential &lt;/i&gt;of greater returns and increased diversification (nothing is guaranteed, of course).&amp;nbsp; I personally hold about 40% of my equities in international funds.&amp;nbsp; It&#39;s also a nice addition that this index will now include small-caps (much like the difference between the S&amp;amp;P 500 and the Wilshire 5000).&amp;nbsp; It is now not imperative to have a separate small-cap foreign holding unless you purposefully want to overweight.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  75. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Previously, while the single Target Retirement fund offered a great simple solution for investors who want to set it and forget it, it notably lacked foreign small-caps and it&#39;s exposure to international markets was a bit low. Now it seems to be a more viable all-in-one solution.&amp;nbsp; That comes with a couple of caveats.&amp;nbsp; Firstly, the stock/bond allocation hasn&#39;t changed so one should look at those when determining which fund best suits his or her objectives rather than looking at the end date.&amp;nbsp; Others do not find the shift from stocks to bonds to be appropriate, and rather shift from equities to bonds earlier in their lives.&amp;nbsp; Finally, I personally like some exposure to REITs and that still is not included in the fund.&amp;nbsp; However, you could do much worse than the Target Retirement Funds.&amp;nbsp; They are simple all-in-solutions that are inexpensive and highly diversified.&amp;nbsp; I am glad Vanguard made the changes to not only increase the foreign allocation, but also including small-caps, Canada, and Israel by following a different index for the international fund.&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  76. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Good job Vanguard!&lt;/span&gt;&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/798646726797750647'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/798646726797750647'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/09/vanguard-adjusts-international-equity.html' title='Vanguard Adjusts International Equity in Target Retirement and Other Balanced Funds'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://4.bp.blogspot.com/_a9FNMR19fkk/TK9VbfxwnKI/AAAAAAAAAhI/ks9z1CFfowo/s72-c/vanguard.GIF" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-5936309345820602185</id><published>2010-08-03T16:53:00.007-05:00</published><updated>2010-10-29T23:12:28.351-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="book review"/><title type='text'>Book Review: A Random Walk Down Wall Street</title><content type='html'>&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/TK9V7hfRzDI/AAAAAAAAAhM/tgVpc9rV69c/s1600/RandomWalkDownWS.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/TK9V7hfRzDI/AAAAAAAAAhM/tgVpc9rV69c/s1600/RandomWalkDownWS.jpg&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;I recently re-read the classic investing text &lt;a href=&quot;http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338/ref=sr_1_1?ie=UTF8&amp;amp;s=books&amp;amp;qid=1280339905&amp;amp;sr=8-1&quot;&gt;&lt;i&gt;A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing&lt;/i&gt;&lt;/a&gt; (&lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;W. W. Norton &amp;amp; Company, 464 pp) &lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;by Princeton Professor Burton Malkiel&lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;.&amp;nbsp; In my opinion&lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt; (and many others), this is the single best investing book ever written.&amp;nbsp; Malkiel covers a wide array of topics including stock valuation theories, bubbles, technical and fundamental analysis (even explicitly covering individual technical strategies and debunking the conclusions of repeated outperformance), &lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;modern portfolio theory, behavioral finance (a particularly interesting topic in my mind), efficient-market theory, and then a guide to come up with a portfolio that will challenge those on Wall Street.&amp;nbsp; Before creating a portfolio for the first time, get this book.&lt;/span&gt;&lt;br /&gt;
  77. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  78. &lt;/span&gt;&lt;/div&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;There are certainly easier texts to read for beginners.&amp;nbsp; Thus, if you&#39;re just starting and want a more simplified approach than a 450+ page text, you might look elsewhere.&amp;nbsp; However, Malkiel writes in a very accessible manner such that even neophytes can understand more complex theories.&lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;&amp;nbsp; I&#39;d say that the average investor would be able to follow &lt;i&gt;A Random Walk Down Wall Street &lt;/i&gt;more easily than &lt;i&gt;The Intelligent Investor&lt;/i&gt;, for instance.&amp;nbsp; There&#39;s a reason that the book has been repeatedly updated over the course of 35 years and has sold over a million copies.&lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;&amp;nbsp; What I especially enjoy about this book is not only the broadness of topics covered, but also how Malkiel methodically analyzes various strategies and supports his conclusions with ironclad findings.&amp;nbsp; He doesn&#39;t dismiss other points of views simply by saying &quot;trust me,&quot; but rather provides ample evidence to backup his viewpoint.&amp;nbsp; Malkiel worked in the financial industry for several years and has been in academia for quite some time, churning out economic studies.&lt;/span&gt;&lt;br /&gt;
  79. &lt;br /&gt;
  80. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;The first portion of the text covers stocks and their value.&amp;nbsp; Malkiel divides each section clearly to explain various topics in a concise manner.&amp;nbsp; This also provides a simplified manner in which to jump around a bit, if so desired.&amp;nbsp; One doesn&#39;t need to read the text from page 1 to page 464 in order to gain great insight.&amp;nbsp; Rather, it&#39;s certainly doable to skip to the section that most interests you.&lt;/span&gt;&lt;br /&gt;
  81. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;Near the beginning, Malkiel posits the two main theories and approaches to asset evalution: the firm-foundation theory and the castle-in-the-air theory.&amp;nbsp; Down to their most basic premise, the former simply argues that each investment derives its value from the analysis of present company metrics and market conditions as well as future prospects.&amp;nbsp; That is, the stock&#39;s trading price is tied to the firm&#39;s earnings and growth patterns; when the price becomes at odds with those fundamentals, the market corrects itself.&amp;nbsp; One would consider Benjamin Graham, Warren Buffett, and David Dodd to subscribe to this perspective.&lt;/span&gt;&lt;br /&gt;
  82. &lt;br /&gt;
  83. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;On the other hand, the castle-in-the-air theory posits that stock prices are determined simply by what other people are willing to pay for it.&amp;nbsp; That is, how will the crowd react to various reports and news of the firm. &amp;nbsp; Will the crowd view the stock in an optimistic and favorable light?&amp;nbsp; That will cause the price to increase, and the castle-in-the-air specialist seeks to make the move prior to most others.&amp;nbsp; John Keynes is the most famous economist to hold this view.&lt;/span&gt;&lt;br /&gt;
  84. &lt;br /&gt;
  85. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;Malkiel then goes on to describe &quot;the madness of crowds,&quot; illustrated perfectly with the tulip bulb craze in Holland in the late 16th century when prices spiraled out of control.&amp;nbsp; The book then gives a brief history of stock evaluations from the 60s to the 90s, giving a great historical look at investing and the market.&amp;nbsp; To conclude part one, the author discusses bubbles, specifically highlighting surfing on the internet.&lt;/span&gt;&lt;br /&gt;
  86. &lt;br /&gt;
  87. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;Part two is the big debunking of Wall Street (my words) section.&amp;nbsp; Essentially, Malkiel describes how various contenders such as fundamentalists and technical analysts play the game and why such strategies fall short.&amp;nbsp; In part three, he describes the modern portfolio theory in a clear manner that defines risk and how diversification works in practice.&amp;nbsp; He then covers behavioral finance, giving space to overconfidence, herding, and loss aversion among other topics.&amp;nbsp; Finally, Malkiel head-on addresses various beliefs as to why the efficient-market theory doesn&#39;t hold true.&lt;/span&gt;&lt;br /&gt;
  88. &lt;br /&gt;
  89. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;Finally, at part four, Malkiel gives real-world advice for individual investors and how to make one&#39;s portfolio better.&amp;nbsp; This is really the meat and potatoes of the text and if you simply want guidance to your individual portfolio and asset allocation, I&#39;d skip to this section.&amp;nbsp; Malkiel recognizes that many investors cannot accept the indexing model, and thus offers four rules on picking individual stocks, while emphasizing the odds are stacked against outperformance when choosing individual companies to invest in.&lt;/span&gt;&lt;br /&gt;
  90. &lt;br /&gt;
  91. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;In the end, Malkiel shuns Wall Street&#39;s antics and its rampant marketing that the pros always win.&amp;nbsp; He credits the majority of the outperformance of the select few fund managers to dumb luck saying that very few individuals actually possess the capabilities and foresight to continually pick winners.&amp;nbsp; After eliminating the selection bias of surviving funds, you&#39;ll see how poorly Wall Street truly performs and that the fees they charge you are excessive.&amp;nbsp; Malkiel professes to a low-cost diversified set of index funds that gradually grow more conservative as you near retirement.&amp;nbsp; As he concludes, &quot;The indexing strategy is the one I most highly recommend [...] Investing is a bit like lovemaking.&amp;nbsp; Ultimately, it is really an art requiring a certain talent and the presence of a mysterious force called luck.&amp;nbsp; Indeed, luck may be 99 percent responsible for the success of the every few people who have beaten the averages [...] If you know you will either win or at least not lose too much, and if you index at least the core of your portfolio, you will be able to play the game with more satisfaction.&quot;&lt;/span&gt;&lt;br /&gt;
  92. &lt;br /&gt;
  93. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;Rating: 5 out of 5 &lt;/span&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/5936309345820602185'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/5936309345820602185'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/08/book-review-random-walk-down-wall.html' title='Book Review: A Random Walk Down Wall Street'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://1.bp.blogspot.com/_a9FNMR19fkk/TK9V7hfRzDI/AAAAAAAAAhM/tgVpc9rV69c/s72-c/RandomWalkDownWS.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-6884669768123340439</id><published>2010-06-26T23:04:00.019-05:00</published><updated>2011-04-28T09:55:43.274-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="investing strategies"/><category scheme="http://www.blogger.com/atom/ns#" term="retirement"/><title type='text'>The Importance of Asset Location</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TCbVa6VehLI/AAAAAAAAAQQ/WopiigHpQhE/s1600/location+graphic.PNG&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;99&quot; src=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TCbVa6VehLI/AAAAAAAAAQQ/WopiigHpQhE/s200/location+graphic.PNG&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;There are certain factors in investing in which we have little to no control.&amp;nbsp; With this fact in mind, we have to give ourselves the best chance for success by strategically pinpointing the factors that we &lt;i&gt;can &lt;/i&gt;control, and effectively utilize them to our advantage.&amp;nbsp; The first and most important of these is asset allocation, which has been discussed on this blog and articles on the web, newspapers, and magazines ad nauseum.&amp;nbsp; That is, stocks vs. bonds, value vs. growth, US vs. foreign, etc.&amp;nbsp; Certainly, the propensity for articles to address these issues is with merit as asset allocation has, according to published studies,&amp;nbsp; been responsible for nearly 90% of a portfolio&#39;s performance over the long-term (signifying the insignificance of market timing among other decisions).&amp;nbsp;&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  94. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;The second key factor within our control that indexers love to stress is the ability to control fees - both fees with your financial advisor and fees within a fund as measured by its net expense ratio.&amp;nbsp; Studies have shown that minimizing fees maximizes returns; even seemingly small differences (such as 0.4%) add up over the course of several years and you should do everything in your power to get the lowest cost investment to fulfill your asset allocation. &amp;nbsp; The third significant decision within our control is the actual security &lt;i&gt;selection&lt;/i&gt;.&amp;nbsp; Although for indexers this point is not terribly interesting as we simply choose a fund that offers one of the lowest fees and fulfills the particular asset class we desire.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  95. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;That brings me the fourth and final aspect of investments in which he have control over - minimizing taxes in our investments.&amp;nbsp; We can do this by having a logical asset location - that is, which investments we choose to hold in taxable accounts and which we hold in tax-advantaged (401k, Roth IRA, etc.) accounts.&amp;nbsp; While we certainly can&#39;t control what the government will do in the future to tax rates (and it would be a futile affair to attempt to predict such decisions), we &lt;i&gt;can &lt;/i&gt;exploit how Uncle Sam deals with long-term capital gains and things of that nature to&lt;i&gt; &lt;/i&gt;minimize the amount the US government takes from our investment gains.&amp;nbsp; Small differences in taxes can compound in huge figures over the long-term and investors would be wise to consider the tax efficiency and placement of their investments to reduce their tax burden.&amp;nbsp; Avoiding (or at least minimizing) certain taxes is one of the most important strategies to maximize long-term growth of one&#39;s investments, but is a topic that is, unfortunately, frequently glossed over in articles and discussions on portfolio management.&amp;nbsp; As will be evidenced in this post with evaluations of after-tax final portfolio values based on asset location, the difference can be stark.&amp;nbsp; This is a topic that shouldn&#39;t be brushed aside.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  96. &lt;b&gt;A Basic Primer on the Rationale&lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  97. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Your tax burden varies largely based on the type of investment as well as the investment style and turnover of the particular fund in question.&amp;nbsp; In essence, the taxes you&#39;re responsible for depends on the taxable distributions and the rate on those.&amp;nbsp; This can vary based on if dividends are qualified, how often a fund distributes capital gains, and other factors.&amp;nbsp; The basic premise behind tax-efficient investing is to place your efficient investments in taxable accounts (and thus you won&#39;t lose as much to taxes) and your inefficient investments in tax-advantaged accounts (since you have no tax liability until distributions, or not at all if we&#39;re talking about Roth accounts).&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  98. As a general rule, bond funds are tax-inefficient because the gains they generate are all taxed as ordinary income and are subject to your marginal income tax bracket.&amp;nbsp; (Although  municipal bonds have no such restriction, but typically offer lower  yields to compensate).&amp;nbsp; REITs, likewise, are required by law to distribute at least 90% of their income as dividends, which is overwhelming at the non-qualified divided rate.&amp;nbsp; Thus, although REITs are traded as stocks, they too are extremely tax-inefficient.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  99. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;While stock funds are generally efficient, if they are actively managed and have a high turnover rate, it may be possible that they generate a lot of short-term capital gains.&amp;nbsp; Likewise, a fund that pays high dividends (like many value funds do) may not be as efficient.&amp;nbsp; Foreign funds typically are quite tax efficient since they are eligible for the foreign tax credit.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  100. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;Hypothetical Scenarios&lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  101. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;While the general feeling for indexers is &quot;stocks in taxable, bonds in tax-advantaged&quot; that is not always the case as Rande Spiegelman for the Schwab Center for Investment Research explains in his report &quot;&lt;a href=&quot;http://a15.g.akamai.net/f/15/5616/5s/schwab.download.akamai.com/5616/report/location.pdf&quot;&gt;Location, Location, Location: Dividing Your Portfolio between Taxable and Tax-Advantaged Accounts&lt;/a&gt;.&quot;&amp;nbsp; He summarizes his findings in table form as follows:&lt;br /&gt;
  102. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TCa0qwIcsYI/AAAAAAAAAQA/AJSDxxPMFws/s1600/asset+location+Schwab+report.PNG&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;267&quot; src=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TCa0qwIcsYI/AAAAAAAAAQA/AJSDxxPMFws/s640/asset+location+Schwab+report.PNG&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/TCa0qwIcsYI/AAAAAAAAAQA/AJSDxxPMFws/s1600/asset+location+Schwab+report.PNG&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;/a&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Spiegelman poses two hypothetical scenarios for two different investors.&amp;nbsp; You can rea&lt;span style=&quot;font-size: small;&quot;&gt;d his assumption on page 2 of the report, but &lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;the first case involves &quot;Tishana&quot; who is in the 40% combined marginal bracket and has a portfolio value starting at $200,000 (50% in taxable, 50% in tax-advantaged).&amp;nbsp; In the first portfolio (Portfolio A), Tishana places her highly efficient stocks in her taxable accounts and her bonds in tax-advantaged accounts.&amp;nbsp;&amp;nbsp;&amp;nbsp; In the second portfolio (Portfolio B), Tishana places her bonds in taxable and highly efficient stocks in tax-advantaged.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  103. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt; &lt;/span&gt;&lt;/div&gt;&lt;table border=&quot;1&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;MsoTableGrid&quot; style=&quot;border-collapse: collapse; border: medium none; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; margin-left: auto; margin-right: auto; text-align: left;&quot;&gt;&lt;tbody&gt;
  104. &lt;tr&gt;   &lt;td style=&quot;border: 1pt solid windowtext; padding: 0in 5.4pt; text-align: center; width: 41.4pt;&quot; valign=&quot;top&quot; width=&quot;55&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;Years&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;Total Portfolio A&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;Total Portfolio B&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: windowtext windowtext windowtext -moz-use-text-color; border-style: solid solid solid none; border-width: 1pt 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;Advantage (Disadvantage) of Portfolio A&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  105. &lt;tr&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; padding: 0in 5.4pt; text-align: center; width: 41.4pt;&quot; valign=&quot;top&quot; width=&quot;55&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;5&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$216,232&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$204,087&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$12,145&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  106. &lt;tr&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; padding: 0in 5.4pt; text-align: center; width: 41.4pt;&quot; valign=&quot;top&quot; width=&quot;55&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;15&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$387,030&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$346,127&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$40,903&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  107. &lt;tr&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; padding: 0in 5.4pt; text-align: center; width: 41.4pt;&quot; valign=&quot;top&quot; width=&quot;55&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;30&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$975,188&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$846,486&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$128,702&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  108. &lt;tr&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext; border-style: none solid solid; border-width: medium 1pt 1pt; padding: 0in 5.4pt; text-align: center; width: 41.4pt;&quot; valign=&quot;top&quot; width=&quot;55&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;40&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$1,841,668&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$1,629,675&lt;/div&gt;&lt;/td&gt;   &lt;td style=&quot;border-color: -moz-use-text-color windowtext windowtext -moz-use-text-color; border-style: none solid solid none; border-width: medium 1pt 1pt medium; padding: 0in 5.4pt; text-align: center; width: 99pt;&quot; valign=&quot;top&quot; width=&quot;132&quot;&gt;&lt;div class=&quot;MsoNormal&quot;&gt;$211,993&lt;/div&gt;&lt;/td&gt;  &lt;/tr&gt;
  109. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  110. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;As you can see in the above, Tishana would have more than $210,000 more in her final portfolio value after 40 years of investing if she practice tax-efficient placement of her investments.&amp;nbsp; $210,000!&amp;nbsp; That&#39;s certainly not an insignificant amount of money; it&#39;s more than her beginning portfolio value and more than 10% of her final portfolio value.&amp;nbsp; Would you want to pay $200,000 more in taxes over 40 years simply because you don&#39;t want to practice tax-efficient investing?&amp;nbsp; Of course not.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  111. Next in the article, Spiegelman proposes a situation in which Tishana instead invests in actively managed stock funds in taxable and bonds in tax-advantaged.&amp;nbsp; In that case, while Portfolio A outpaced Portfolio B in the 5, 15, and 30 year timelines, Portfolio B actually had the higher value after 40 years to the tune of $105,000.&amp;nbsp; By the way, Portfolio A when utilizing actively managed funds ended at $1,524,169, a full $317,499 less than if Tishana had used tax-efficient index funds.&amp;nbsp; And that&#39;s when assuming the actively managed fund performed identically to that of the index fund, something most actively managed funds fail to do.&amp;nbsp; Even giving the active managers&#39; the benefit of the doubt on that, the fund has to not only outperform the benchmark to break even because of higher fees, but also because of higher taxes.&amp;nbsp; Yet another reason to go the passive approach!&amp;nbsp; Again, such a decision could save you huge amounts over the long-term.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  112. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;The article then discusses Sam who has a lower 30% combined marginal bracket.&amp;nbsp; In Sam&#39;s case, the difference isn&#39;t as severe since he loses less to taxes in general so doesn&#39;t need to concern himself as much.&amp;nbsp; Still, the advantage for Portfolio A when using over 40 years is $96,621, which is a quite considerable sum.&amp;nbsp; In the case wherein Sam uses actively managed funds, Portfolio B outpaces Portfolio A after 30 years. Thus, if you absolutely insist on using actively managed funds (which I do not recommend), then you should consider the turnover and management strategy of the fund to determine the best placement, argues Spiegelman.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  113. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;Likewise, Vanguard has a nice report worth considering titled &quot;&lt;a href=&quot;https://institutional.vanguard.com/iip/pdf/WP_AssetAllocation.pdf&quot;&gt;Asset  Location for Taxable Investors&lt;/a&gt;&quot; written by Colleen M. Jaconetti in  2007.&amp;nbsp; Jaconetti concludes the following:&lt;/div&gt;&lt;blockquote style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div style=&quot;text-align: left;&quot;&gt;If an investor’s primary goal is to maximize  after-tax return, then, in general, an optimal portfolio, from an asset  location perspective, would hold broad-market index equity funds/ETFs or  tax-managed equity funds in taxable accounts and taxable bond funds in  tax deferred accounts. This assumes the investor is willing to forgo  owning active equity funds (or other tax-inefficient investments),  unless space in his or her tax-deferred registrations allows for it.&lt;/div&gt;&lt;/blockquote&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Jaconetti  also proposes hypothetical scenarios similar to the Schwab study above  to illustrate this point in real dollars.&amp;nbsp;&amp;nbsp; Such scenarios are helpful  to the average investor to actually associate such decisions with  real-dollar amounts as opposed to simply learning about these theoretical rules of thumb.&amp;nbsp; All the same assumptions are made for the first three scenarios as stated on page 2 of the report.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  114. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In the first scenario, highly efficient index equity funds are used in taxable account and taxable bond funds are in tax-deferred.&amp;nbsp;&amp;nbsp; The post-liquidation value after 10 years is $1,694,671.&amp;nbsp; In the second scenario, taxable bond funds are used in taxable accounts and index equity funds are used in tax-deferred accounts.&amp;nbsp; In this case, the portfolio grows to $1,531,413.&amp;nbsp; As you can see, this is considerably less than the first scenario.&amp;nbsp; In the third scenario, the investor utilized municipal bond funds in taxable accounts (which are tax-free) and index equity funds in tax-deferred.&amp;nbsp; Such an example grows to $1,583,088.&amp;nbsp; While this is better than the second option, it still lags the first scenario considerably.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  115. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In scenario four, there are a few different assumptions as stated on page 4.&amp;nbsp; In this case, the investor utilizes active equity funds in taxable and taxable bonds in tax-deferred accounts.&amp;nbsp; Such an account has a post-liquidation value of $1,623,108 after 10 years.&amp;nbsp; It is better than Scenarios 2 and 3 suggesting that even if you have actively managed funds, you should still place them in taxable.&amp;nbsp; This conclusion seemingly contradicts that from Schwab, but if you look at the actual Schwab report, he came to the same conclusion for the 15-year timeframe (closest to the 10-year that Vanguard considered).&amp;nbsp; It wasn&#39;t until 30 or even 40 years where the opposite conclusion was delivered.&amp;nbsp; While scenario 4 beat scenarios 2 and 3, it still lags the first one.&amp;nbsp; Yet another piece of evidence to support the idea of investing in index funds.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  116. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In the end, after ten years, Scenario 1 in which the investor utilizes tax-efficient index funds in taxable accounts and taxable bonds in tax-deferred performed the best after taking taxes into consideration.&amp;nbsp; Scenario 2 lagged by more than $163,000, while Scenario 3 trailed by $111,583, and 4 was $71,563 behind, suggesting that such a location decision is less important for those implementing actively managed funds.&amp;nbsp; As stated at the onset, scenario 1 optimizes returns.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  117. &lt;b&gt;Other Research Reports&lt;/b&gt; &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  118. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Dammon, Poterba, Spatt, and Zhang from CMU, MIT, CMU, and UT-Dallas reached the same conclusion as the Vanguard report utilizing arbitrage arguments in their 2004 TIAA-CREF Paul A. Samuelson Award-winning paper, which they discuss in a &lt;a href=&quot;http://www.tiaa-crefinstitute.org/pdf/research/research_dialogue/85.pdf&quot;&gt;research dialogue&lt;/a&gt;.&amp;nbsp; They conclude:&lt;/div&gt;&lt;blockquote style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Using arbitrage arguments, we showed that holding equities in taxable accounts&lt;br /&gt;
  119. and bonds in tax-deferred accounts is the optimal asset location strategy even if capital gains are realized and taxed on an annual basis, as long as the tax rate on capital gains is less than that on interest income. This implies that even actively-managed mutual funds that generate large capital gains (losses) each year should be held in taxable accounts and bonds in tax-deferred accounts. The asset location decision is a matter of indifference only if capital gains are fully taxed each year (i.e., no deferral) and dividends, capital gains, and interest are all taxed at the same rate.&lt;/blockquote&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;It appears that that Schwab came to a different conclusion as to where to place &lt;i&gt;actively &lt;/i&gt;managed funds (and that&#39;s the only significant difference) than Vanguard and the above academics due to different assumptions&lt;i&gt; &lt;/i&gt;&lt;i&gt;that you cannot predict.&amp;nbsp; &lt;/i&gt;(Although Schwab came to the same conclusion over shorter-time frames.&amp;nbsp; Just not the 40-year hypothetical growth scenario).&lt;i&gt;&amp;nbsp; &lt;/i&gt;This is yet another reason to hold index funds - you know what you are getting and can manage it in a way to confidently minimize taxes.&amp;nbsp; This much is sure, though - placing tax-efficient stock funds in taxable and bonds in tax-advantaged accounts is indisputable and can save you a boatload of cash.&amp;nbsp; These investors also single out REITs as stock investments that make the most sense in tax-advantaged accounts.&amp;nbsp; Of course, tax-exempt bonds should also be held in taxable accounts.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  120. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;William Reichenstein, the Pat and Thomas R. Powers Chair in Investment Management at the &lt;br /&gt;
  121. Hankamer School of Business at Baylor University, brings up yet another point in his paper &quot;&lt;a href=&quot;http://www.efficientfrontier.com/ef/704/REICHENSTEINJWMMarkOpt.pdf&quot;&gt;Asset Allocation and Asset Location Decisions Revisited&lt;/a&gt;.&quot;&amp;nbsp;&amp;nbsp; He concludes that not only is their an optimal asset locations as discussed above, but that the profession in general has been &quot;miscalculating an individual&#39;s asset allocation, and the measurement error can be substantial.&amp;nbsp; Asset allocation should reflect after-tax funds because goods and services are purchased with after-tax money.&quot;&amp;nbsp; This is quite an interesting point that will be revisited in the future post, but I think it&#39;s important to note that if your tax-advantaged accounts are largely bonds and your taxable accounts are filled with stocks, then your intended asset allocation may actually be out of whack with the after-tax value of such investments and a tax-adjustment may be prudent.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  122. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;To conduct such adjustment, simply multiple the pretax values in tax-deferred accounts (401k, Traditional IRA, etc. not Roth accounts) by 1 minus the expected tax rate during retirement.&amp;nbsp; Taxable accounts are also subject to capital gains taxes so an adjustment there may also be wise (such as adjusting for the 15% long-term capital gains tax for your stock gains).&amp;nbsp;&amp;nbsp; There is still some debate in investment circles about this approach, though, and many state that investments don&#39;t care where they are housed and thus calculating asset allocation percentages by adjusting for taxes is unnecessary.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  123. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;To get back to the main point of the post, Reichenstein holds somewhat of a morphed view of the Schwab report and TIAA-CREF award-winning paper above.&amp;nbsp; While he agrees that bonds should be tax-advantaged and stocks should be in taxable accounts, he also posits that such a decision is much more important for a passive investor than to an active investor.&amp;nbsp; He also concludes that if one absolutely insists on holding bonds in taxable accounts, then one should adjust his or her asset allocation to have a relatively large bond holding.&amp;nbsp; That is, such decisions should not be made in a vacuum and instead the optimal asset allocation and asset location decisions should be made jointly.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  124. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;In yet another paper published in February 2006, &quot;&lt;a href=&quot;http://www.tiaa-crefinstitute.org/pdf/research/trends_issues/tr020106b.pdf&quot;&gt;Trends and Issues: Tax-Efficient Saving and Investing&lt;/a&gt;,&quot; Reichenstein highlights a few key points.&amp;nbsp; The first being that individuals should maximize their contributions to tax-deferred and after-tax accounts as much as possible as they all &quot;allow for tax-exempt growth on their after-tax values.&quot;&amp;nbsp; He again brings up the point of miscalculating one&#39;s asset allocation by not adjusting for after-tax values and thus individuals &quot;overstate the allocation to the dominant asset class held in tax-deferred accounts.&quot;&amp;nbsp; This is the paper you should consult if you want a clear explanation as to how to calculate your &quot;true asset allocation&quot; as I briefly described above.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  125. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;For a more simplified description of the above including various investment choices, one can consult the Bogleheads wiki &lt;a href=&quot;http://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement&quot;&gt;article &lt;/a&gt;on this topic.&amp;nbsp; The wiki summarizes the strategy as follows:&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;/div&gt;&lt;ol style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;li&gt; Choose your basic asset allocation (stocks/bonds/cash) before  worrying about taxes. &lt;/li&gt;
  126. &lt;li&gt; If possible, put your most tax-inefficient funds in your  tax-advantaged accounts (IRA, Roth IRA, 401(k), 403(b), etc.).&amp;nbsp; &lt;/li&gt;
  127. &lt;li&gt; If you would have to hold a tax-inefficient fund in a taxable  account, consider a more tax-efficient alternative, such as a stock index fund rather than an active fund.&amp;nbsp;&lt;/li&gt;
  128. &lt;/ol&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;There is also a helpful graphical representation of how efficient various asset classes are as reproduced below.&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/TCbL2xCzjtI/AAAAAAAAAQI/vETWttnrnOg/s1600/bogleheads+tax+efficiency.PNG&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;391&quot; src=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/TCbL2xCzjtI/AAAAAAAAAQI/vETWttnrnOg/s400/bogleheads+tax+efficiency.PNG&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;That is certainly a helpful graphic to refer to when making asset location decisions.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  129. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;Conclusion&lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  130. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;While devising an investment plan, establishing a reasonable asset allocation based on your risk tolerance, objectives, and timeline is probably the single most investment decision you can make.&amp;nbsp; Security selection to minimize fees and optimize returns while fulfilling a particular asset class also is vital in your investment well-being.&amp;nbsp; In addition to those two factors, however, the decision to implement a tax-efficient investment plan to minimize taxes has proven to provide a significantly larger nest egg.&amp;nbsp; The effect of taxes on one&#39;s portfolio should not be understated and one must consider the tax-efficiency of their investments when considering asset location.&amp;nbsp; This is certainly an area that is often neglected but shouldn&#39;t be as the ramifications are profound.&amp;nbsp; Studies utilizing historical data on the distributions and capital gains of investments as well as the current tax laws in place lead to an overwhelming benefit to the investor to place taxable bonds in tax-advantaged accounts and highly efficient stock funds in taxable accounts.&amp;nbsp; Notable exceptions to the stocks in taxable accounts include REITs and actively managed funds with high turnover.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  131. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;The location of your investments is vital to minimize taxes and maximize your after-tax portfolio return.&amp;nbsp; I can assure you that you won&#39;t be sorry for considering tax-efficiency in your investment plan.&amp;nbsp; It could mean literally hundreds of thousands of dollars more in your name when all is said and done. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  132. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;Sources&lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  133. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Dammon RM, Poterba J, Spatt CS, Zhang HH. &quot;Maximizing Long-Term Wealth Accumulation: It&#39;s Not Just About &#39;What&#39; Investments To Make, But Also &#39;Where&#39; To Make Them,&quot; &lt;i&gt;TIAA-CREF Institute.&lt;/i&gt; 2005.&lt;br /&gt;
  134. &lt;br /&gt;
  135. Jaconetti, Colleen.&amp;nbsp; &quot;Asset Location for Taxable Investors,&quot; &lt;i&gt;Vanguard  Investment Counseling &amp;amp; Research&lt;/i&gt;.&amp;nbsp; September 12, 2007. &lt;br /&gt;
  136. &lt;br /&gt;
  137. &quot;Principles of Tax-Efficient Fund Placement,&quot; &lt;i&gt;Bogleheads Wiki&lt;/i&gt;.  2010.&lt;br /&gt;
  138. &lt;br /&gt;
  139. Reichenstein, William.&amp;nbsp; &quot;Asset Allocation and Asset Location Decisions Revisited,&quot; &lt;i&gt;The Journal of Wealth Management.&lt;/i&gt;&amp;nbsp; Summer 2001. &lt;br /&gt;
  140. &lt;br /&gt;
  141. Reichenstein, William.&amp;nbsp; &quot;Tax Efficient Saving and Investing,&quot; &lt;i&gt;TIAA-CREF Institute Trends and Issues&lt;/i&gt;.&amp;nbsp; February 2006.&lt;br /&gt;
  142. &lt;br /&gt;
  143. Spiegelman, Rande.&amp;nbsp; &quot;Location, Location, Location: Dividing Your  Portfolio between Taxable and Tax-Advantaged Accounts,&quot; &lt;i&gt;Schwab Center  for Investment Research.&amp;nbsp; &lt;/i&gt;June 2004. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;/div&gt;&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6884669768123340439'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6884669768123340439'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/06/importance-of-asset-location.html' title='The Importance of Asset Location'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://2.bp.blogspot.com/_a9FNMR19fkk/TCbVa6VehLI/AAAAAAAAAQQ/WopiigHpQhE/s72-c/location+graphic.PNG" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-7751567265190877297</id><published>2010-06-22T12:32:00.002-05:00</published><updated>2010-10-08T12:28:58.059-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Schwab"/><title type='text'>Schwab Reduces Expense Ratio on its ETFs; Bond ETFs in the works</title><content type='html'>&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/TK9Uxq4vy-I/AAAAAAAAAhE/aBW1AqkuL9E/s1600/schwabLogo.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/TK9Uxq4vy-I/AAAAAAAAAhE/aBW1AqkuL9E/s1600/schwabLogo.jpg&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Schwab has &lt;a href=&quot;http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&amp;amp;newsId=20100614005573&amp;amp;newsLang=en&quot;&gt;reduced &lt;/a&gt;the expense ratio on its commission-free ETF offerings (currently only eight).&amp;nbsp; Certainly the amounts we&#39;re talking about are not huge; it looks like Schwab is attempting to beat Vanguard by at least 0.01% on all its funds (which amounts to $1/yr for a $10,000 investment). The only fairly significant change is its emerging market ETF, which has been reduced to 0.25% from 0.35%.&amp;nbsp; The rest have decreased by 0.02%.&lt;/span&gt;&lt;br /&gt;
  144. &lt;br /&gt;
  145. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Following is an updated comparison of ETF offerings from Schwab, Vanguard, iShares/Fidelity, and SPRDs, courtesy of Schwab.&amp;nbsp; Obviously, they highlight their own offerings!&amp;nbsp; Recall that the Schwab, Vanguard, and Fidelity customers can trade these ETFs without paying transaction charges.&amp;nbsp; Schwab currently has 8 such offerings, Vanguard has 43, and Fidelity/iShares has 25:&lt;/span&gt;&lt;br /&gt;
  146. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  147. &lt;/span&gt;&lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; margin-left: auto; margin-right: auto; text-align: left; width: 506px;&quot;&gt;&lt;tbody&gt;
  148. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  149. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  150. &lt;/span&gt;&lt;/td&gt;     &lt;td align=&quot;left&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;Domestic  Equity ETFs&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;     &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  151. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#0064b1&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;Schwab&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;     &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  152. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;Vanguard&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;     &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  153. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;iShares&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;     &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  154. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;SPDRs&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;     &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  155. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  156. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  157. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  158. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  159. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  160. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;U.S.  BROAD MARKET&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  161. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#eef5fb&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.06%  &lt;br /&gt;
  162. SCHB&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  163. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.07%  &lt;br /&gt;
  164. VTI&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  165. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.21%  &lt;br /&gt;
  166. IWV&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  167. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.21%  &lt;br /&gt;
  168. TMW&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  169. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  170. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  171. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  172. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  173. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  174. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;U.S.  LARGE-CAP&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  175. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#d4e7f7&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.08%  &lt;br /&gt;
  176. SCHX&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  177. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.12%  &lt;br /&gt;
  178. VV&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  179. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.09%  &lt;br /&gt;
  180. IVV&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  181. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.09%  &lt;br /&gt;
  182. SPY&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  183. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  184. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  185. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  186. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  187. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  188. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;U.S.  LARGE-CAP GROWTH&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  189. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#eef5fb&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.13%  &lt;br /&gt;
  190. SCHG&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  191. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.14%  &lt;br /&gt;
  192. VUG&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  193. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.18%  &lt;br /&gt;
  194. IVW&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  195. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.20%  &lt;br /&gt;
  196. ELG&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  197. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  198. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  199. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  200. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  201. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  202. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;U.S.  LARGE-CAP VALUE&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  203. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#d4e7f7&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.13%  &lt;br /&gt;
  204. SCHV&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  205. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.14%  &lt;br /&gt;
  206. VTV&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  207. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.18%  &lt;br /&gt;
  208. IVE&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  209. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.21%  &lt;br /&gt;
  210. ELV&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  211. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  212. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  213. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  214. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  215. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  216. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;U.S.  SMALL-CAP&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  217. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#eef5fb&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.13%  &lt;br /&gt;
  218. SCHA&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  219. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.14%  &lt;br /&gt;
  220. VB&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  221. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.20%  &lt;br /&gt;
  222. IJR&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  223. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.32%  &lt;br /&gt;
  224. DSC&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  225. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  226. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  227. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  228. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  229. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  230. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;International  Equity ETFs&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  231. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#0064b1&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;Schwab&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  232. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;Vanguard&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  233. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;iShares&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  234. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#009ddc&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: white; font-size: x-small;&quot;&gt;&lt;b&gt;SPDRs&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  235. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  236. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  237. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  238. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  239. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  240. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;INTERNATIONAL  EQUITY&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  241. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#eef5fb&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.13%  &lt;br /&gt;
  242. SCHF&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  243. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.15%  &lt;br /&gt;
  244. VEA&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  245. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.35%  &lt;br /&gt;
  246. EFA&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  247. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.34%  &lt;br /&gt;
  248. CWI&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  249. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  250. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  251. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  252. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  253. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  254. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;INTERNATIONAL  SMALL-CAP &lt;br /&gt;
  255. EQUITY&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  256. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#d4e7f7&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.35%  &lt;br /&gt;
  257. SCHC&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  258. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.40%  &lt;br /&gt;
  259. VSS&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  260. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.40%  &lt;br /&gt;
  261. SCZ&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  262. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ede8e3&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.59%  &lt;br /&gt;
  263. GWX&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  264. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  265. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  266. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  267. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  268. &lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;3&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  269. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;left&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;216&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;EMERGING  MARKETS EQUITY&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  270. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#eef5fb&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #0064b1; font-size: x-small;&quot;&gt;&lt;b&gt;0.25%  &lt;br /&gt;
  271. SCHE&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  272. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;71&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.27%  &lt;br /&gt;
  273. VWO&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  274. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.72%  &lt;br /&gt;
  275. EEM&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  276. &lt;/span&gt;&lt;/td&gt;             &lt;td align=&quot;center&quot; bgcolor=&quot;#ffffff&quot; height=&quot;40&quot; width=&quot;69&quot;&gt;&lt;span style=&quot;color: #998b7d; font-size: x-small;&quot;&gt;&lt;b&gt;0.59%  &lt;br /&gt;
  277. GMM&lt;/b&gt;&lt;/span&gt;&lt;/td&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; height=&quot;40&quot; width=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  278. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  279. &lt;tr&gt;             &lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  280. &lt;/span&gt;&lt;/td&gt;&lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  281. &lt;/span&gt;&lt;/td&gt;&lt;td bgcolor=&quot;#ded7cf&quot; colspan=&quot;12&quot; height=&quot;1&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  282. &lt;/span&gt;&lt;/td&gt;             &lt;/tr&gt;
  283. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;color: black; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;i&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;Source: &lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;Charles  Schwab &amp;amp; Co&lt;/span&gt;&lt;/i&gt;&lt;/div&gt;&lt;div style=&quot;color: black; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;br /&gt;
  284. &lt;/div&gt;&lt;div style=&quot;color: black; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: small;&quot;&gt;In the end,&lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt; all three brokerage firms have ample low-cost offerings and the differences are negligible.&amp;nbsp; I wouldn&#39;t move my money to Schwab simply because they currently have slightly lower expenses (which are subject to change and aren&#39;t significant to begin with, except for perhaps the SCHE / EEM difference).&amp;nbsp; But it&#39;s certainly good news that the firms are continually trying to get our business by providing more low-cost offerings.&amp;nbsp; The more competition, the better.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;color: black; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  285. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;span style=&quot;color: #333333; font-size: x-small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;color: black;&quot;&gt;The bigger news to me that dropped back in April is that three Schwab bond ETFs are &lt;a href=&quot;http://www.indexuniverse.com/sections/features/7492-schwab-files-to-offer-three-us-treasury-etfs.html&quot;&gt;in the works&lt;/a&gt;.&amp;nbsp; &lt;/span&gt;&lt;span style=&quot;color: black;&quot;&gt;Schwab&#39;s largest obstacle in my mind for getting individual investors to have the entirety of their portfolio with them was the lack of diversified and inexpensive bond funds.&amp;nbsp; Supposedly, they&#39;ll be offering a TIPS ETF, a short-term US Treasury fund, and an intermediate-term US Treasury fund.&amp;nbsp; While those three pale in comparison to what Vanguard offers, most people could make a decent portfolio with them.&amp;nbsp; You certainly could do much worse.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  286. &lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/7751567265190877297'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/7751567265190877297'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/06/schwab-reduces-expense-ratio-on-its.html' title='Schwab Reduces Expense Ratio on its ETFs; Bond ETFs in the works'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://1.bp.blogspot.com/_a9FNMR19fkk/TK9Uxq4vy-I/AAAAAAAAAhE/aBW1AqkuL9E/s72-c/schwabLogo.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-4769389070972046627</id><published>2010-06-14T15:57:00.007-05:00</published><updated>2010-10-29T23:14:32.550-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="sector investing"/><title type='text'>Jason Zweig: Using Sector Funds to Reduce Human Capital Risk</title><content type='html'>&lt;span style=&quot;font-family: Georgia,&amp;quot;,serif;&quot;&gt;I was surfing the web and came across Jason Zweig&#39;s personal &lt;a href=&quot;http://www.jasonzweig.com/&quot;&gt;website&lt;/a&gt;, which has a wealth of interesting articles and insights. &amp;nbsp; Zweig, a finance columnist for &lt;i&gt;The Wall Street Journal,&lt;/i&gt; former senior writer for &lt;i&gt;Money &lt;/i&gt;magazine, and the editor who added extensive commentary following each chapter in the 2003 revised version of Benjamin Graham&#39;s &lt;a href=&quot;http://www.amazon.com/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661/ref=sr_1_1?ie=UTF8&amp;amp;s=books&amp;amp;qid=1276546460&amp;amp;sr=8-1&quot;&gt;The Intelligent Investor&lt;/a&gt;, &lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;is definitely one of the &quot;good guys&quot; in the finance and personal investing world.&amp;nbsp; He subscribes to the low-cost indexing approach that is far too uncommon among financial commentators these days.&lt;/span&gt;&lt;br /&gt;
  287. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  288. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In any event, I came across his article &quot;&lt;a href=&quot;http://www.jasonzweig.com/uploads/12.02Sectors.pdf&quot;&gt;Get Smart About Sectors&lt;/a&gt;,&quot; published in December 2002 in &lt;i&gt;Money.&amp;nbsp; &lt;/i&gt;At first glance, this seems like a very un-Zweig-like article.&amp;nbsp; Sector investing?&amp;nbsp; Doesn&#39;t that &lt;i&gt;increase &lt;/i&gt;risk and &lt;i&gt;reduce &lt;/i&gt;diversification?&amp;nbsp; Well, yeah, if you&#39;re simply investing in a sector because you think it&#39;s &quot;hot&quot; and your motivation is simply to optimize returns.&amp;nbsp; Rather, Zweig&#39;s article proposes another motivating factor behind sector investing - to serve as a hedge against human capital.&amp;nbsp; That is, your job.&amp;nbsp; Particularly if you work in a high-risk industry, you may want to think about balancing that risk with your &lt;i&gt;financial &lt;/i&gt;capital in a sector that correlates the least with your &lt;i&gt;human&lt;/i&gt; capital.&amp;nbsp; This is the basic tenet behind diversification; and Zweig argues that this strategy will help &lt;i&gt;reduce &lt;/i&gt;risk and &lt;i&gt;increase &lt;/i&gt;diversification.&lt;/span&gt;&lt;br /&gt;
  289. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;I have heard of this strategy in passing, but hadn&#39;t come across a detailed article such as Zweig&#39;s until now (despite the fact that it was published in 2002!).&amp;nbsp; This premise certainly makes sense.&amp;nbsp; Just ask those at Enron who loaded up on company stock (as a sidenote, I recommend keeping your company&#39;s stock holding as less than 5% of your net worth if at all possible).&amp;nbsp; On page 2, you can consult a chart of the various sectors and which sector correlates the least with it.&amp;nbsp;&amp;nbsp; For example, if you work in mining, you might consider having a position in a utilities sector fund since it has the lowest correlation at -17.&amp;nbsp; Zweig does &lt;i&gt;not &lt;/i&gt;encourage moving into and out of sectors in an attempt to time the market&#39;s movements.&amp;nbsp; Rather, he encourages a buy-and-hold long-term approach just as he does with typical index funds.&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  290. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  291. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Zweig comments that the average sector fund charges 1.74%.&amp;nbsp; That &quot;average&quot; is an absurd fee and can be easily avoided.&amp;nbsp; Perhaps they didn&#39;t exist at the time of the article, but you can gain access to any of these sectors through &lt;a href=&quot;http://www.sectorspdr.com/&quot;&gt;Select Sector SPDRs&lt;/a&gt;.&amp;nbsp; They have an expense ratio of about 0.22% - a far cry from the 1.74% average.&amp;nbsp; Another alternative if you don&#39;t want to go to the ETF route, is to use the &lt;a href=&quot;http://personal.fidelity.com/products/funds/selectindex.shtml&quot;&gt;Fidelity Select Funds&lt;/a&gt;, which are actively managed and charge about 1.0%, but only have a $2,500 minimum.&amp;nbsp; (You must hold these for 30-days or will be charged a redemption fee.)&amp;nbsp; Vanguard also has several sector specific funds and ETFs that are in the 0.25%-0.38% range, but some require a minimum investment of $25,000 and charge a redemption fee of 1% if held for less than one year.&amp;nbsp; But, again, you&#39;re planning to hold it more than one year anyways, right?&amp;nbsp; Consult each individual prospectus or fund page for details.&amp;nbsp; Some are actively managed, while others are simply indexes.&amp;nbsp;&amp;nbsp; For example, &lt;a href=&quot;https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/productoverview?fundId=0051&quot;&gt;here &lt;/a&gt;is one of the Energy funds.&lt;/span&gt;&lt;br /&gt;
  292. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  293. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Just  remember, it is not advisable to attempt to use sector investing as a  means to outperform the market and move into and out of hot sectors  every two months.&amp;nbsp; (Although I did explore a sector rotation investing  strategy in a post &lt;a href=&quot;http://investingguy.blogspot.com/2009/07/sector-rotation-strategies.html&quot;&gt;here&lt;/a&gt;.&amp;nbsp;  The conclusion basically was that any outperformance one experiences  due to sector rotation can be attributed to higher risk and volatility.&amp;nbsp;  While during certain periods this strategy &lt;i&gt;did &lt;/i&gt;outperform, there  were other periods of significant underperformance.&amp;nbsp; Volatility overall  was much greater than simply holding the total market.)&amp;nbsp; &lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  294. &lt;br /&gt;
  295. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In the end, the idea that sector funds can be used as a hedge against potential job loss and serve to further diversify your portfolio is an interesting one.&amp;nbsp; I don&#39;t think this strategy is imperative for everybody to use by any means, but if you&#39;re in a particularly high-risk industry or have concerns about job security or pay raises, this strategy might be one to consider.&lt;/span&gt;&lt;br /&gt;
  296. &lt;br /&gt;
  297. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Update: There is a timely &lt;a href=&quot;http://online.wsj.com/article/SB10001424052748704904604575262712612181000.html#articleTabs%3Darticle&quot;&gt;article&lt;/a&gt; that&#39;s worth a read about the importance of human capital and its relevance to risk-taking in one&#39;s investments in today&#39;s &lt;i&gt;Wall Street Journal&lt;/i&gt;.&amp;nbsp; The article, &quot;How to Think Smarter About Risk,&quot; is written by Mosche Milevsky, an Associate Professor of Fianance at York University in Canada.&amp;nbsp; While he doesn&#39;t talk about sector investing, he introduces the concept of &quot;personal beta,&quot; advising individuals to consider how a drop in the stock market would affect their paycheck and how such risks should be considered when devising a portfolio.&amp;nbsp; If you&#39;re an investment banker your earnings are more tied to the stock market and you may want to take fewer risks with the rest of your portfolio.&amp;nbsp; On the other hand, if you&#39;re a nurse or tenured professor such market movements have little relevance and you may want to be more aggressive and in stocks with your financial capital.&amp;nbsp; Interesting read!&lt;/span&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/4769389070972046627'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/4769389070972046627'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/06/jason-zweig-using-sector-funds-to.html' title='Jason Zweig: Using Sector Funds to Reduce Human Capital Risk'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-1683868786683706288</id><published>2010-06-10T22:14:00.016-05:00</published><updated>2010-11-10T12:01:56.461-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="asset allocation"/><category scheme="http://www.blogger.com/atom/ns#" term="investing strategies"/><title type='text'>Fama And French Three Factor Model and the Small Value Premium</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TBRdUZI2OuI/AAAAAAAAAPo/Dfi362GFTok/s1600/fama.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;115&quot; src=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TBRdUZI2OuI/AAAAAAAAAPo/Dfi362GFTok/s200/fama.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;In my &lt;a href=&quot;http://investingguy.blogspot.com/2009/10/lazy-portfolios.html&quot;&gt;Lazy Portfolios&lt;/a&gt; post, you&#39;ll notice that many of them overweight the small and value components.&amp;nbsp; Why do investment advisors often recommend this approach?&amp;nbsp; I thought it would be interesting to delve deeper into answering that question in this post.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;&lt;/b&gt;&lt;br /&gt;
  298. &lt;b&gt;Capital Asset Pricing Model (&lt;a href=&quot;http://www.investopedia.com/terms/c/capm.asp&quot;&gt;CAPM&lt;/a&gt;)&lt;/b&gt;&lt;b&gt; &lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  299. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Before going into details of the Three Factor Model, it&#39;s first important to have a brief understanding of the Capital Asset Pricing Model (CAPM) on which the Three Factor is largely based.&amp;nbsp; CAPM basically only uses market risk (systemic and non-systemic) as a proxy for expected return.&amp;nbsp; Its equation is Ra = Rf + Ba(Rm - Rf), where Rf is the risk free rate of return, Ba is the beta of the security, and Rm is the expected market return.&amp;nbsp; Essentially, as explained by this equation, investors are compensated by risk as measured by beta and time value.&amp;nbsp; As investopedia &lt;a href=&quot;http://www.investopedia.com/terms/c/capm.asp&quot;&gt;explains&lt;/a&gt;:&lt;br /&gt;
  300. &lt;blockquote&gt;The CAPM says that the expected return of a security or a portfolio  equals the rate on a risk-free security plus a risk premium. If this  expected return does not meet or beat the required return, then the  investment should not be undertaken. The security market line plots the  results of the CAPM for all different risks (betas). &lt;/blockquote&gt;&lt;b&gt;Fama and French Three Factor Model&lt;/b&gt;&lt;br /&gt;
  301. &lt;b&gt;&lt;/b&gt;&lt;br /&gt;
  302. Eugene Fama, a professor at &lt;a href=&quot;http://www.chicagobooth.edu/&quot;&gt;Booth&lt;/a&gt;, and Kenneth French&lt;b&gt; &lt;/b&gt;,  a professor at &lt;a href=&quot;http://www.tuck.dartmouth.edu/&quot;&gt;Tuck&lt;/a&gt;,  developed a model by which to further describe market behavior,  expanding on the CAPM.&amp;nbsp; They published their findings in the Journal of Finance in 1992 (&lt;span class=&quot;citation Journal&quot;&gt;&quot;The Cross-Section of Expected Stock  Returns&quot;) and&lt;/span&gt; provided more details a year later in the Journal of Financial Economics (&quot;&lt;span class=&quot;citation Journal&quot;&gt;Common Risk Factors in the Returns on  Stocks and Bonds&quot;).&amp;nbsp; While CAPM uses the single factor of beta to compare returns, Fama and French found that to be too simplistic of an approach and added both size and value as factors to the model.&amp;nbsp; They found that historically stocks with high book-to-market ratios (i.e. value stocks) and small-cap stocks have performed better than the market at large.&amp;nbsp; Thus, they simply added to the end of the CAPM equation expressions SMB (&quot;small (market capitalization) minus big&quot;), HML (&quot;high (book-to-price ratio) minus low&quot;), and &lt;a href=&quot;http://www.investopedia.com/terms/a/alpha.asp&quot;&gt;alpha&lt;/a&gt;.&amp;nbsp;&amp;nbsp; This new equation accounts for the tendency of outperformance of these two factors and gives a better comparison tool for evaluating fund performance, among other uses.&lt;/span&gt;&lt;br /&gt;
  303. &lt;span class=&quot;citation Journal&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  304. &lt;span class=&quot;citation Journal&quot;&gt;The important part of their findings to us as individual investors and the main take home message is value stocks tend to perform better than growth stocks and small caps typically outperform large cap companies.&amp;nbsp; Thus, portfolios with a high percentage of small cap and value would result in a lower value using this model than the CAPM, since it adjusts downward on those two accords. &lt;/span&gt;&lt;br /&gt;
  305. &lt;div style=&quot;text-align: center;&quot;&gt;&lt;br /&gt;
  306. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://www.thedividendguyblog.com/wp-content/themes/leia-en/imagenes/2009/12/03stragraphic.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;312&quot; src=&quot;http://www.thedividendguyblog.com/wp-content/themes/leia-en/imagenes/2009/12/03stragraphic.gif&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;div style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: xx-small;&quot;&gt;&lt;i&gt;(click to enlarge)&lt;/i&gt;&lt;/span&gt;&lt;/div&gt;&lt;span class=&quot;citation Journal&quot;&gt;As you can see from the above  chart courtesy of the &lt;i&gt;New York Times&lt;/i&gt; (who used Fama and French&#39;s  data), since 1926 small-cap value companies have hugely outperformed  large-cap growth firms.&amp;nbsp; Note that this is on a logarithmic scale and  not linear, so the outperformance doesn&#39;t look as dramatic as it could.&amp;nbsp;  But this is a nearly a 100-fold (or 10,000%) difference!&lt;/span&gt;&lt;br /&gt;
  307. &lt;br /&gt;
  308. &lt;span class=&quot;citation Journal&quot;&gt;Here is another chart from Index Funds Advisors, showing the growth of $1 from 1928 to 2007.&amp;nbsp;&amp;nbsp; The annualized return is on the y-axis while risk in the form of standard deviation is on the x-axis.&amp;nbsp; Small-value experienced a 14.6% annualized return (albeit with higher risk) while large-growth had a 9.6% annualized return through December 2004.&amp;nbsp; One interesting datapoint on this chart is small-growth, which has historically had relatively weak returns with a high standard deviation. &lt;/span&gt;&lt;br /&gt;
  309. &lt;div style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: xx-small;&quot;&gt;&lt;i&gt;(click to enlarge)&lt;/i&gt;&lt;/span&gt;&lt;br /&gt;
  310. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/TBRg6c9IsYI/AAAAAAAAAP4/kY2UVnpQtrg/s1600/f8-19-n.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;223&quot; src=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/TBRg6c9IsYI/AAAAAAAAAP4/kY2UVnpQtrg/s320/f8-19-n.jpg&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;span class=&quot;citation Journal&quot;&gt;&amp;nbsp;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;i&gt;Source: Index Funds Advisors&lt;/i&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;span class=&quot;citation Journal&quot;&gt; &lt;/span&gt;&lt;br /&gt;
  311. &lt;br /&gt;
  312. &lt;span class=&quot;citation Journal&quot;&gt;&lt;b&gt;Small-Value Premium&lt;/b&gt;&lt;/span&gt;&lt;br /&gt;
  313. &lt;br /&gt;
  314. &lt;span class=&quot;citation Journal&quot;&gt;Not only do small-cap and value plays have higher expected return, but they also provide additional diversification.&lt;b&gt; &amp;nbsp; &lt;/b&gt;While one may think that simply &quot;owning the entire market&quot; is as diversified as one can get in US equities, the weighting mechanism that indices use is &quot;a far different outcome from what one would expect,&quot; explains Larry Swedrow in &lt;a href=&quot;http://www.amazon.com/What-Wall-Street-Doesnt-Want/dp/0312335725/ref=sr_1_1?ie=UTF8&amp;amp;s=books&amp;amp;qid=1276222557&amp;amp;sr=8-1&quot;&gt;&lt;i&gt;What Wall Street Doesn&#39;t Want You to Know&lt;/i&gt;&lt;/a&gt;.&amp;nbsp; &quot;Almost 70%&amp;nbsp; of the portfolio is large-cap growth stocks.&quot;&amp;nbsp; He recommends putting a large percentage of the portfolio in small-cap or value funds to compensate for this perhaps seemingly bizarre weighting.&amp;nbsp; When your large-cap growth zigs, your small-cap or value holdings may zag, enabling you to sustain performance even in bearish times.&amp;nbsp; Of course, these asset classes aren&#39;t perfectly negatively correlated so it&#39;s not going to be a flawless zig/zag relationship (nothing is unless you&#39;re shorting and long in the same position, which would be pretty pointless), but at least it presumably provides protection against the downside while at the same time increasing your expected return.&amp;nbsp; A double win!&lt;/span&gt;&lt;br /&gt;
  315. &lt;span class=&quot;citation Journal&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  316. &lt;span class=&quot;citation Journal&quot;&gt;As stated above with the Fama French Model, but it doesn&#39;t hurt to emphasize this point, since small-caps and value typically carry larger risks, the expected return must be greater to compensate.&amp;nbsp; This is the small-value premium that people seek.&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  317. &lt;br /&gt;
  318. &lt;span class=&quot;citation Journal&quot;&gt;&lt;b&gt;What this means for your portfolio&lt;/b&gt; &lt;/span&gt;&lt;br /&gt;
  319. &lt;br /&gt;
  320. &lt;span class=&quot;citation Journal&quot;&gt;Personally, I think it makes the most sense for individual investors to simply hold small-cap value and ignore small-blend and large value.&amp;nbsp; I find this simplified approach meets the desired results and is easier to hold and maintain in a tax efficient manner.&amp;nbsp; Some aggressive investors prefer a 50/50 split between total stock and small-value.&amp;nbsp; I personally like approximately a 2:1 total stock to small value ratio.&amp;nbsp; Value, small-cap, and small-cap value funds are typically less tax efficient than a total stock market fund counterpart, so it probably makes sense to hold the small-cap value in retirement accounts.&amp;nbsp; Although examining the tax cost ratio via Morningstar of a fund like VISVX (Vanguard Small-Cap Value Index) shows the difference is negligible (in fact, VISVX seems to be more tax efficient than VTSMX over certain periods) , so holding it in taxable account certainly isn&#39;t the worst thing you could do.&lt;/span&gt;&lt;br /&gt;
  321. &lt;span class=&quot;citation Journal&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  322. &lt;span class=&quot;citation Journal&quot;&gt;Remember the media calling 2000-2010 the &quot;lost decade&quot; as the S&amp;amp;P was virtually unchanged?&amp;nbsp; Well, if you had invested a considerable sum in small-cap value, your portfolio would be in seriously positive territory for that period.&amp;nbsp; Not so lost anymore!&amp;nbsp; From January 14, 2000 to June 10, 2010 (today), Vanguard Total Stock Market is &lt;i&gt;down &lt;/i&gt;nearly 17%.&amp;nbsp;&amp;nbsp; It certainly would seem like a waste of investments if that was your return after 10 whole years.&amp;nbsp; VISVX, on the other hand, is &lt;i&gt;up &lt;/i&gt;64% over the same period - an outperformance of 81%!&amp;nbsp; And you thought those timing strategies had good outperformance.&amp;nbsp; This strategy simply calls for setting a slightly different asset allocation and letting it be (which is much more tax efficient) and absolutely obliterated more complicated, tax-inefficient strategies.&lt;/span&gt;&lt;br /&gt;
  323. &lt;span class=&quot;citation Journal&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  324. &lt;span class=&quot;citation Journal&quot;&gt;Let&#39;s take a look at the growth of $10,000 chart of Total Stock Market and Small-Cap Value since June 1998.&amp;nbsp; The blue line is total stock, while the orange line is small value.&lt;/span&gt;&lt;br /&gt;
  325. &lt;br /&gt;
  326. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TBGmT4Y2xkI/AAAAAAAAAOw/WdEAxztVFDQ/s1600/total+and+small+value.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;290&quot; src=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/TBGmT4Y2xkI/AAAAAAAAAOw/WdEAxztVFDQ/s640/total+and+small+value.png&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;div style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;citation Journal&quot;&gt;&amp;nbsp;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;i&gt; (Source: Morningstar Inc.)&lt;/i&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;text-align: center;&quot;&gt;&lt;br /&gt;
  327. &lt;/div&gt;&lt;span class=&quot;citation Journal&quot;&gt;As you can see, from 1998 to mid-2000, the total stock market largely outpeformed small-cap value as tech growth stocks were all the rage and escalated in value like no other time in history.&amp;nbsp; When the tech bubble burst in 2000, though, you&#39;d certainly be glad you had small-cap value to provide diversification and to offset some risk.&amp;nbsp;&amp;nbsp;&amp;nbsp; In the 2000 to January 2003 period, the total stock market plummeted 36%, while small-cap value enjoyed a small (but real) 4% gain.&amp;nbsp; That is the zig/zag action we were talking about earlier.&amp;nbsp; The 1998-2003 timeframe illustrates this diversification benefit perfectly.&amp;nbsp; While the total stock market took you on a roller coaster ride (where your $10,000 grew to $13,000 before falling to $8,000), small-cap value had a different trajectory and would have somewhat abated that volatility (for both the upside and downside).&lt;/span&gt;&lt;br /&gt;
  328. &lt;span class=&quot;citation Journal&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  329. &lt;span class=&quot;citation Journal&quot;&gt;In the end, after twelve years your $10,000 invested in VTSMX grew to nearly $12,000, while small-cap value blossomed to nearly $19,500.&amp;nbsp; That&#39;s the small-cap premium we&#39;re looking for!&lt;/span&gt;&lt;br /&gt;
  330. &lt;span class=&quot;citation Journal&quot;&gt;&lt;br /&gt;
  331. Just as a comparision, here is a chart comparing total stock (blue) with value (yellow), small blend (green), and small-value (orange).&amp;nbsp; As you can see (although this won&#39;t always be the case), small-value really provides the best of both worlds in the Fama French model.&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  332. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/TBGoate2glI/AAAAAAAAAO4/pR8eRAwP-pM/s1600/total%252C+small%252C+value+and+small+value.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;286&quot; src=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/TBGoate2glI/AAAAAAAAAO4/pR8eRAwP-pM/s640/total%252C+small%252C+value+and+small+value.png&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;div style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;citation Journal&quot;&gt;&amp;nbsp;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;i&gt; (Source:  Morningstar Inc.)&lt;/i&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;span class=&quot;citation Journal&quot;&gt;The Value Index largely mirrored total stock (although provided some refuge during the growth uprun and demolition from 1998-2003), while small-blend provided more diversification, and small-value gave even a larger return due to its premium.&lt;/span&gt;&lt;br /&gt;
  333. &lt;span class=&quot;citation Journal&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  334. &lt;span class=&quot;citation Journal&quot;&gt;This strategy should be in the arsenal of all indexing individual investors.&amp;nbsp; Small-cap value provides greater &lt;i&gt;expected &lt;/i&gt;return and increased diversification with the caveat that one should expect slightly more volatility and risk.&lt;/span&gt;&lt;br /&gt;
  335. &lt;span class=&quot;citation Journal&quot;&gt; &lt;/span&gt;&lt;br /&gt;
  336. &lt;span class=&quot;citation Journal&quot;&gt;Edit: &lt;a href=&quot;http://rwinvesting.blogspot.com/&quot;&gt;DIY Investor&lt;/a&gt; brought up a good point in the comments that investors with lower risk tolerances (e.g. retirees) might want to think twice before &quot;loading up&quot; on these asset classes based on the downside risk, standard deviation, and volatility measures.&amp;nbsp; I certainly agree and probably should have mentioned this above as there is certainly &lt;i&gt;is &lt;/i&gt;increased risk in these asset classes.&amp;nbsp; However, as I responded, I think investors are more than amply compensated for the additional risk.&amp;nbsp; A retiree with a &lt;/span&gt;40/60 equities/bonds portfolio might have something like 20% Total US, 10%  Foreign, and 10% US Small Value based on my proposed 2:1 US Total to small value.&amp;nbsp;  10% Small-Value, even with its  volatility, is not going to wreak havoc on that portfolio and would marginally increase your risk (while correspondingly increasing your expected return).&amp;nbsp; Looking at the alpha measures of VISVX (quite simply, a risk-adjusted measure of performance; of course, past performance doesn&#39;t guarantee future results), VISVX has a 3-year alpha of &lt;a href=&quot;http://money.usnews.com/funds/vanguard-small-capitalization-value-index-fund/visvx&quot;&gt;6.68&lt;/a&gt; (with a beta of 1.28) and a 1-year alpha of 6.68.&amp;nbsp; That is, VISVX has  enjoyed nearly a 7% outperformance (annually) of what CAPM would  predict (i.e. after taking risk/beta/volatility into account).&amp;nbsp; VTSMX, for comparison has an alpha of 1.18 (and beta of 1.03, as  expected).&amp;nbsp; As stated, this doesn&#39;t guarantee anything for the future, but &lt;i&gt;historically &lt;/i&gt;the alpha values for small-value are favorable and investors have been more than compensated for the increased risk.&amp;nbsp; But, it is important to stress, that the increased risk &lt;i&gt;is &lt;/i&gt;real, so you should take this into account if you plan to dip in this asset class.&lt;br /&gt;
  337. &lt;br /&gt;
  338. Update 6/16/10: Larry Swedroe&#39;s recent article on why the Small Growth Index is the &lt;a href=&quot;http://moneywatch.bnet.com/investing/blog/wise-investing/the-black-hole-of-investing/1482/?tag=col1;blog-river&quot;&gt;&quot;Black Hole of Investing&lt;/a&gt;.&quot;&amp;nbsp; That&#39;s why I avoid it all together.&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1683868786683706288'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1683868786683706288'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/06/fama-and-french-three-factor-model-and.html' title='Fama And French Three Factor Model and the Small Value Premium'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://2.bp.blogspot.com/_a9FNMR19fkk/TBRdUZI2OuI/AAAAAAAAAPo/Dfi362GFTok/s72-c/fama.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-1780776496025732090</id><published>2010-05-06T14:21:00.010-05:00</published><updated>2010-05-10T09:11:14.432-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="market conditions"/><title type='text'>Market goes nuts - VTI down 33%, recovers 29% in a matter of a few minutes</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Wild ride on the market today.&amp;nbsp; (Still ongoing.)&amp;nbsp; VTI (Vanguard Total Stock Market ETF) was down 33% at one point, and then in a matter of a few minutes recovered nearly 29%.&amp;nbsp; (Note that this was not how much the actual stocks in the ETF went down as ETFs are priced by the highest bidder; many ETFs suffered presumably from liquidity issues.&amp;nbsp; Hence, my title is a bit misleading.)&amp;nbsp; The Dow sunk nearly 1000 points, or 9.8%, and quickly shot back up 600 points.&amp;nbsp; Heck, VB (Vanguard Small Cap ETF) was down&lt;b&gt; 96%&lt;/b&gt; at one point (to 0.1; the bid price that is, the ask was still somewhat normal so purchasing at that price wouldn&#39;t have gone through) and then quickly shot back up.&amp;nbsp;&amp;nbsp; Some people made a whole lot of money today, while others lost a bundle.&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  339. &lt;br /&gt;
  340. &lt;span style=&quot;font-size: small;&quot;&gt;I can&#39;t even load the Yahoo! Finance webpage.&amp;nbsp; &lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Apparently, several people are unable to access their brokerage accounts.&lt;/span&gt;&lt;br /&gt;
  341. &lt;br /&gt;
  342. &lt;span style=&quot;font-size: small;&quot;&gt;Get this: it appears that an order went through for &lt;/span&gt;&lt;span class=&quot;postbody&quot;&gt; 39,000 shares of VTI for around $39!&amp;nbsp; VTI is now at 57.6.&amp;nbsp; That computer made somebody a lot of money.&lt;/span&gt;&lt;br /&gt;
  343. &lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp; &lt;/span&gt;&lt;br /&gt;
  344. &lt;span style=&quot;font-size: small;&quot;&gt;More to come&lt;/span&gt;....&lt;br /&gt;
  345. &lt;br /&gt;
  346. Update 4:05 PM ET: CNBC is reporting that the crash was caused by a trading error at Citigroup.&amp;nbsp; Earlier reported simply to be a &quot;major firm.&quot;&lt;br /&gt;
  347. &lt;br /&gt;
  348. Update 7:30 PM ET: It appears that there was a &lt;a href=&quot;http://money.cnn.com/2010/05/06/markets/procter_and_gamble_stock/index.htm&quot;&gt;technical glitch&lt;/a&gt; in a variety of stocks, including P&amp;amp;G.&amp;nbsp; &lt;a href=&quot;http://www.businessweek.com/news/2010-05-06/nasdaq-to-cancel-u-s-trades-that-moved-more-than-60-update1-.html&quot;&gt;Nasdaq&lt;/a&gt; and &lt;a href=&quot;http://www.thestreet.com/story/10749500/1/nasdaq-nyse-arca-to-cancel-60-swing-trades-in-selloff.html?cm_ven=GOOGLEN&quot;&gt;NYSE&lt;/a&gt; are canceling all trades that moved more than 60%.&amp;nbsp; So, any of those VB trades at ridiculously low prices are canceled; however, the VTI trade @ 39 will stand as it&#39;s within 60%.&lt;br /&gt;
  349. &lt;br /&gt;
  350. Update 5/7/10:&amp;nbsp; It seems as if the &quot;fat fingers&quot; theory blamed on Citigroup was pre-mature, and there is &lt;a href=&quot;http://money.cnn.com/2010/05/07/news/companies/citigroup_rumors/index.htm&quot;&gt;no&lt;/a&gt; &lt;a href=&quot;http://www.reuters.com/article/idUSN0712750420100507&quot;&gt;evidence&lt;/a&gt; to substantiate it.&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1780776496025732090'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1780776496025732090'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/05/market-goes-nuts-down-33-recovers-29-in.html' title='Market goes nuts - VTI down 33%, recovers 29% in a matter of a few minutes'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-3257598697871372300</id><published>2010-05-05T10:56:00.012-05:00</published><updated>2010-10-29T23:16:28.685-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Vanguard"/><title type='text'>Vanguard Joins the Price War!  Free VG ETF Trades and Cheap Equity Commissions</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Wow!  That is all I can say about the latest development.  Vanguard just &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/commissions-05042010&quot;&gt;announced&lt;/a&gt; that its brokerage clients can now trade their entire 46 low-cost ETFs commission free!  On top of that, they majorly slashed their equity commissions, which used to not be competitive with the rest of the market.   Most commissions will be $7 or $2.&lt;/div&gt;&lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  351. &lt;/div&gt;&lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Here are the details:&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;h2 style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-div&quot; style=&quot;font-size: small;&quot; type=&quot;Div&quot;&gt;New  commission rates for ETFs and stocks&lt;/span&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-div&quot; style=&quot;font-size: small;&quot; type=&quot;Div&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/h2&gt;&lt;table cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;dataTable pad&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: left;&quot;&gt;&lt;thead&gt;
  352. &lt;tr&gt; &lt;th id=&quot;tbl143id0_0&quot; scope=&quot;col&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;204&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;Assets  invested in Vanguard funds and ETFs&lt;/b&gt;&lt;/span&gt;&lt;br /&gt;
  353. &lt;br /&gt;
  354. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;_________________ &lt;/b&gt;&lt;/span&gt;&lt;/th&gt; &lt;th id=&quot;tbl143id0_1&quot; scope=&quot;col&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;195&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;Commissions  for Vanguard ETF transactions&lt;/b&gt;&lt;/span&gt;&lt;br /&gt;
  355. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;_________________ &lt;/b&gt;&lt;/span&gt;&lt;/th&gt; &lt;th id=&quot;tbl143id0_2&quot; scope=&quot;col&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;166&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;Commissions  for equity transactions&lt;/b&gt;&lt;/span&gt;&lt;br /&gt;
  356. &lt;br /&gt;
  357. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;_______________&lt;/b&gt;&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;&lt;/b&gt;&lt;/span&gt;&lt;/th&gt; &lt;/tr&gt;
  358. &lt;/thead&gt; &lt;tbody&gt;
  359. &lt;tr&gt; &lt;td headers=&quot;tbl143id0_0&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;204&quot;&gt;Less  than $50,000&lt;br /&gt;
  360. (standard rate)&lt;/td&gt; &lt;td headers=&quot;tbl143id0_1&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;195&quot;&gt;&lt;b&gt;Free&lt;/b&gt;&lt;b&gt; &lt;/b&gt;&lt;/td&gt; &lt;td headers=&quot;tbl143id0_2&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;166&quot;&gt;&lt;b&gt;$7  for the first 25&lt;/b&gt; (subsequent trades $20)&lt;/td&gt; &lt;/tr&gt;
  361. &lt;tr&gt; &lt;td headers=&quot;tbl143id0_0&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;204&quot;&gt;$50,000–$500,000&lt;br /&gt;
  362. (Voyager®)&lt;/td&gt; &lt;td headers=&quot;tbl143id0_1&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;195&quot;&gt;&lt;b&gt;Free&lt;/b&gt;&lt;/td&gt; &lt;td headers=&quot;tbl143id0_2&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;166&quot;&gt;&lt;b&gt;$7&lt;/b&gt;&lt;/td&gt; &lt;/tr&gt;
  363. &lt;tr&gt; &lt;td headers=&quot;tbl143id0_0&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;204&quot;&gt;$500,000–$1  million&lt;br /&gt;
  364. (Voyager Select®)&lt;/td&gt; &lt;td headers=&quot;tbl143id0_1&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;195&quot;&gt;&lt;b&gt;Free&lt;/b&gt;&lt;/td&gt; &lt;td headers=&quot;tbl143id0_2&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;166&quot;&gt;&lt;b&gt;$2&lt;/b&gt;&lt;/td&gt; &lt;/tr&gt;
  365. &lt;tr&gt; &lt;td headers=&quot;tbl143id0_0&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;204&quot;&gt;$1  million or more&lt;br /&gt;
  366. (Flagship®)&lt;/td&gt; &lt;td headers=&quot;tbl143id0_1&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;195&quot;&gt;&lt;b&gt;Free&lt;/b&gt;&lt;/td&gt; &lt;td headers=&quot;tbl143id0_2&quot; style=&quot;text-align: center;&quot; valign=&quot;top&quot; width=&quot;166&quot;&gt;&lt;b&gt;First  25 free&lt;/b&gt;&lt;br /&gt;
  367. (subsequent trades $2)&lt;/td&gt; &lt;/tr&gt;
  368. &lt;/tbody&gt; &lt;/table&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;&lt;br /&gt;
  369. &lt;i&gt;Taken from &lt;a href=&quot;https://personal.vanguard.com/us/insights/article/commissions-05042010&quot;&gt;https://personal.vanguard.com/us/insights/article/commissions-05042010&lt;/a&gt;&lt;/i&gt;&lt;/span&gt;&lt;/div&gt;&lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  370. &lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;Vanguard CEO Bill McNabb explained:&lt;/span&gt;&lt;/div&gt;&lt;blockquote style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;For 35  years, Vanguard has been committed to reducing the cost of investing in  mutual funds for our clients. Now, Vanguard is expanding our low-cost  commitment to ETFs.  Importantly, Vanguard offers  a greater choice of ETFs with expense ratios that are among the lowest  in the industry.&lt;/span&gt;&lt;/div&gt;&lt;/blockquote&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  371. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;This &lt;i&gt;Money&lt;/i&gt; &lt;a href=&quot;http://moremoney.blogs.money.cnn.com/2010/05/05/vanguard-joins-the-etf-price-war/&quot;&gt;article&lt;/a&gt; has more information and quotes.  Yet again I need to update my Vanguard, Schwab, and Fidelity &lt;a href=&quot;http://investingguy.blogspot.com/2010/01/comparison-of-vanguard-charles-schwab.html&quot;&gt;comparison post&lt;/a&gt;.  This action is clearly in response to Schwab&#39;s and Fidelity&#39;s prior unveilings and it&#39;s great to see Vanguard attempt to remain competitive in all facets.  Great news all around!&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;&lt;br /&gt;
  372. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;postbody&quot;&gt;Note that there a few fine print issues that are important to note.  First of all, it appears that  the $50 fee for ETF conversion has been eliminated.  Also note that &quot;if you buy and sell the same Vanguard ETF in a Vanguard Brokerage account more than 25 times in a 12-month period, you may be restricted from purchasing that Vanguard ETF through your Vanguard Brokerage account for 60 days.&quot;  Lastly, it appears that there is still a 1% redemption fee of up to $250 for selling non-Vanguard No-Transaction Fee funds held less than 180 days.&lt;/span&gt;&lt;br /&gt;
  373. &lt;br /&gt;
  374. &lt;span class=&quot;postbody&quot;&gt;Update: &lt;a href=&quot;http://rwinvesting.blogspot.com/&quot;&gt;DIY Investor&lt;/a&gt; brought up a good point in the comments section that I thought I&#39;d add to this post.  The free commissions may lead certain investors to increase their trading frequency tremendously, which, according to various behavioral economics studies, has proven to be overwhelmingly unsuccessful.  McNabb addresses this point, further emphasizing Vanguard&#39;s underlying Jack Bogle approach to investing for the long-term:&lt;/span&gt;&lt;br /&gt;
  375. &lt;blockquote&gt;To be clear, our commission-free offer is not intended to encourage the  active trading of ETFs, which we believe is counterproductive and rarely successful.&lt;/blockquote&gt;&lt;span class=&quot;postbody&quot;&gt;Of course, that warning certainly won&#39;t convince all individuals.   At least, Vanguard does have in the fine print that they reserve the right to restrict ETF purchases for those actively trading them above a certain threshold.  This leads us to the one major concern of this announcement for  investors that &lt;i&gt;are&lt;/i&gt; disciplined, dollar-cost average indexers - since  these transactions certainly &lt;i&gt;do &lt;/i&gt;cost money and Vanguard is an &quot;at-cost&quot;  provider, are they going to have to increase the expense ratios of their  funds to compensate for those that excessively trade?  Well, one could  argue that the increased assets that will be poured in as a result will  help to reduce costs and the economies of scales of the ETFs will reduce  spreads and increase liquidity, making Vanguard ETFs even better.  Rick  Ferri, CFA, as quoted in the above linked article, suggests that Vanguard&#39;s  patented structure of mutual funds/ETFs will make this commission free  trading advantageous to Vanguard &lt;i&gt;mutual fund&lt;/i&gt; holders as well.  In any event, there certainly are a couple reasons for caution that will be interesting to monitor, but, in the end, I still see this as a very positive development for Vanguard customers.&lt;/span&gt;&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/3257598697871372300'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/3257598697871372300'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/05/vanguard-joins-price-war-free-vg-etf.html' title='Vanguard Joins the Price War!  Free VG ETF Trades and Cheap Equity Commissions'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-7794692005758467284</id><published>2010-04-10T15:34:00.006-05:00</published><updated>2010-10-29T23:17:25.068-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Schwab"/><title type='text'>Judge Rules Against Schwab in YieldPlus Fund Case</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Last week a judge ruled that Charles Schwab (NYSE: &lt;a href=&quot;http://www.google.com/finance?q=SCHW&quot;&gt;SCHW&lt;/a&gt;) violated the law with its YieldPlus Mutual Fund (&lt;a href=&quot;http://www.google.com/finance?q=SWYSX&quot;&gt;SWYSX&lt;/a&gt;) when it held upwards of 50% mortgage-backed securities without shareholder approval. (See &quot;&lt;a href=&quot;http://moremoney.blogs.money.cnn.com/2010/04/10/angry-schwab-bond-fund-customers-win-in-court/&quot;&gt;Angry Schwab bond-fund customers win in&amp;nbsp;court&lt;/a&gt;&quot; and &quot;&lt;a href=&quot;http://www.dailyfinance.com/rtn/pr/hagens-berman-llp-judge-rules-charles-schwab-violated-law-in-yieldplus-mutual-fund-case/rfid314611558/?channel=pf&amp;amp;icid=sphere_copyright&quot;&gt;Judge Rules Charles Schwab Violated Law in  YieldPlus Mutual-Fund Case&lt;/a&gt;.&quot;) This case, somewhat surprisingly, has not been publicized much.&amp;nbsp; With the fund seeking to increase its appeal to the masses, its managers loaded up on risky mortgage-related structured debt to increase its yield, and consequently its assets ballooned to $13 billion in 2007.&amp;nbsp; In other words, the strategy worked.&amp;nbsp; The collapse of the mortgage market in 2008, however, led the fund to lose a whopping 36% of its value, a far cry from the advertised description of the fund as a low-risk alternative to money market and cash accounts.&amp;nbsp; The fund is currently described as seeking &quot;high current income with minimal changes in share  price.&quot;&amp;nbsp; This lawsuit reminds me of the one filed against Schwab&#39;s total bond fund for the same reason, which I reported in my &lt;a href=&quot;http://investingguy.blogspot.com/2009/10/lazy-portfolios.html&quot;&gt;Lazy Portfolios&lt;/a&gt; post.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  376. In 2001, Schwab apparently stated that the fund would hold a maximum of 25% of its assets in any one particular industry, but amended it in 2006 stating that its fund managers reserved the right to make investment decisions at its own discretion without shareholder approval.&amp;nbsp; The judge ruled that this went against the Investment Company Act of 1940 that states that once a mutual fund proposes a policy (as Schwab did in 2001), it can only modify the asset allocations after an okay from the majority of the shareholders.&amp;nbsp; While Schwab publicly disclosed its holdings at all times and was transparent in its investments (this certainly wasn&#39;t a hedge fund-like case wherein the fund was not clear with its investments), it neglected to seek approval from its investors when changing investment philosophy in an attempt to increase the funds yield and attract additional monies.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  377. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Lead attorney for the plaintiff, Steve Berman, explained: &lt;/div&gt;&lt;blockquote style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Plaintiffs contend that Schwab wanted complete, unfettered control of  the fund so the managers could drive up yields, to in turn attract more  investors as YieldPlus grew into the largest ultra-short fund in the  country.&amp;nbsp; Schwab&#39;s money managers did, indeed, jump in and  gamble, but with other people&#39;s money.&lt;/blockquote&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  378. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;This case does &lt;i&gt;not&lt;/i&gt; signal to me that Schwab has a wider corporate issue and that you should no longer trust them with your money.&amp;nbsp; Personally, I think Schwab has some really great low-cost offerings and is a customer-friendly discount brokerage with ample resources and insightful research reports.&amp;nbsp; In this isolated incident, though, specific fund managers made a particularly egregious judgment in an effort to get more investors into the fund.&amp;nbsp; This could have easily happened at a variety of different mutual fund families and I still trust Schwab as much as I would any other highly-respected brokerage firm.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  379. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;There &lt;i&gt;are &lt;/i&gt;two important lessons to learn from this debacle, though.&amp;nbsp; First, monitor your investments &lt;i&gt;regularly&lt;/i&gt; and look closely at the &lt;i&gt;holdings &lt;/i&gt;of every fund you own to ensure that it meets your standards and risk tolerance.&amp;nbsp; In this case, simply reading the prospectus or using a fund analyzer tool online for the YieldPlus fund would indicate to any investor that it held greater than 50% of its holdings in privatized mortgage-backed securities.&amp;nbsp; That would be a red flag to any educated investor as this clearly is at odds with the funds intended risk/reward profile.&amp;nbsp; Schwab did &lt;i&gt;not &lt;/i&gt;try to cover this up and the managers disclosed the funds holdings at regular intervals as required by the SEC.&amp;nbsp; On the other hand, their general description of the fund was misleading and thus, as an investor, you should learn to delve deeper by reading the prospectus and holdings in detail.&amp;nbsp; This applies to all sorts of funds, especially &quot;closet-index funds&quot; - that is, actively managed funds that charge you a hefty expense ratio, but when you breakdown the holdings, it is essentially tied to an index benchmark and could be held in a more cost effective manner.&amp;nbsp; The second lesson from this case is that you &lt;i&gt;must &lt;/i&gt;resist the urge to chase yield.&amp;nbsp; Money managers knew that loading up on MBSs would help sell the fund as the yield surged, but this certainly backfired.&amp;nbsp; Legendary Vanguard founder Jack Bogle explained that this was a classic example of a firm &quot;reaching for yield&quot; to attract new investors, and a typical action many mutual fund companies cannot resist.&amp;nbsp; &quot;The message over and over  again,&quot; Bogle says, &quot;is, &#39;Go the straight and narrow.&#39;&quot;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  380. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;The amount of damages will be determined in a trial beginning May 10.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  381. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Update 4/20/10: Schwab has &lt;a href=&quot;http://online.wsj.com/article/SB10001424052748704448304575195853007744326.html&quot;&gt;decided to settle&lt;/a&gt; for $200 million rather than go to trial.&amp;nbsp;&amp;nbsp; Schwab&#39;s statement indicated that settling &quot;allows the company to avoid the distraction and uncertainty of a trial,  and the further possibility of a protracted appeals process.&quot;&amp;nbsp; They admit no liability under the settlement, which is still awaiting final court approval.&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/7794692005758467284'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/7794692005758467284'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/04/judge-rules-against-schwab-in-yieldplus.html' title='Judge Rules Against Schwab in YieldPlus Fund Case'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-1994227650835414198</id><published>2010-04-08T13:21:00.004-05:00</published><updated>2010-10-29T23:18:11.860-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="book review"/><title type='text'>Book Review: The New Coffeehouse Investor</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/TK9WUeHwLdI/AAAAAAAAAhQ/nFQIrv7svv4/s1600/new-coffeehouse-investor.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/TK9WUeHwLdI/AAAAAAAAAhQ/nFQIrv7svv4/s1600/new-coffeehouse-investor.jpg&quot; /&gt;&lt;/a&gt;&lt;/div&gt;Bill Schultheis&#39; &lt;i&gt;&lt;a href=&quot;http://www.amazon.com/New-Coffeehouse-Investor-Wealth-Ignore/dp/B002UXRZ7Q/ref=sr_1_1?ie=UTF8&amp;amp;s=books&amp;amp;qid=1270748723&amp;amp;sr=8-1&quot;&gt;The New Coffeehouse Investor&lt;/a&gt; &lt;/i&gt;(Portfolio, rev ed. 2009, 224 pp) builds upon his 11-year old original to devise a simple and common sense approach to long-term saving and investing.&amp;nbsp; This certainly is not a dense book of tactical investing strategies and terms, so if you&#39;re looking for that, this is not where to find it.&amp;nbsp; Rather, Schultheis essentially writes a &quot;life book&quot; that happens to be primarily focused on investing by saving well, approximating the stock market average, lowering costs, and diversifying with an appropriate asset allocation plan.&amp;nbsp; The author intersperses his own personal stories throughout, which I found made the book more enjoyable and an easy read.&amp;nbsp; Not only does he have wisdom in the investment realm, but Schultheis really attempts to give larger &quot;living life advice&quot; and parallels his life experiences with that of investing.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  382. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;First, Schultheis begins the book speaking about his interactions with other &quot;coffehouse investors&quot; - that is, friends whom he&#39;d discuss investing ideas at a coffehouse in Seattle with.&amp;nbsp; Building on his 13-year Wall Street career mostly with Smith Barney, Schultheis argues that listening to stock brokers is a fool&#39;s gold and arguments for individual securities such as &quot;I own world-class companies&quot; doesn&#39;t hold water, especially if your age and risk tolerance suggests a certain allocation to bonds is more appropriate.&amp;nbsp; The author really talks about living life (and retirement) to the fullest, rather than constantly worrying about stock picks and your broker.&amp;nbsp; There are several side stories about his mountain climbing experiences as well as stories from his youth such as building an airplane with his brother.&amp;nbsp; They serve a couple purposes - first, to make the book interesting and relay these lessons to investing by using various analogies and metaphors, and also to stress what&#39;s really important in life - and that&#39;s living it.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  383. Schultheis espouses three main principles that guide his philosophy: 1.) Don&#39;t put all your eggs in one basket; 2.) There is no such thing a free lunch; and 3.) Save for a rainy day.&amp;nbsp; In particular, he takes a fairly significant chunk of the book talking about the importance of saving early and the power of compounding; certainly not to the level of not being able to enjoy life, but making certain sacrifices in order to have the retirement you want.&amp;nbsp; He outlines in details the effects of high expense ratios in mutual funds can have on your bottom line as well as inflation risk, holding small company funds, and the significance of re-balancing.&amp;nbsp; While Wall Street likes you to believe that stock market risk is huge when compared to inflation risk in the long-term, when looking at 10-year returns on the market, you&#39;ll notice that rarely does it go down for a significant period.&amp;nbsp; Of course there are no guarantees, but for long-term investing, taking a chance on stocks is the way to go and really the ultimate risk is inflationary in nature.&amp;nbsp; Schultheis urges individuals to ignore the short-term Wall Street stuff and to focus on the big picture.&amp;nbsp; We know the stock market is volatile in the short-term, but if your investment horizon is significantly longer, this should not be terribly concerning to you.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  384. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;The author goes on to explain while certain funds will outperform in the index at large for certain periods/categories, sustaining such an outperformance is unheard of and underperfoming by even a seemingly small amount over the course of a long period can lead to a huge reduction in assets.&amp;nbsp; So, while a fund may be the #1 performing large-cap for the last three-month period, this really is meaningless in the long-run and chasing such returns ends up biting you in the butt.&amp;nbsp; It&#39;s better to have a plan to match the market return with the lowest fees possible, Schultheis argues.&amp;nbsp; Even large state pension funds follow this strategy, with California indexing 85% and New York 75% (although the author doesn&#39;t mention that university endowments typically employ hedge-fund like strategies unlike state funds counterparts).&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  385. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Schultheis proposing a hypothetical situation and game that he calls &quot;Outfox the Box&quot; that illustrates the index fund versus actively managed fund (or individually picking securities) quite well, so I thought I&#39;d mention it here.&amp;nbsp; There are ten boxes with money in them, ranging from $1,000 to $10,000 in $1,000 increments: &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&amp;nbsp; &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 320px;&quot; x:str=&quot;&quot;&gt;&lt;tbody&gt;
  386. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;&lt;/tr&gt;
  387. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; width: 48pt;&quot; width=&quot;64&quot; x:num=&quot;1000&quot;&gt;$1,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot; x:num=&quot;2000&quot;&gt;$2,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot; x:num=&quot;3000&quot;&gt;$3,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot; x:num=&quot;4000&quot;&gt;$4,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot; x:num=&quot;5000&quot;&gt;$5,000&lt;/td&gt;&lt;/tr&gt;
  388. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;6000&quot;&gt;$6,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; x:num=&quot;7000&quot;&gt;$7,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; x:num=&quot;8000&quot;&gt;$8,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; x:num=&quot;9000&quot;&gt;$9,000&lt;/td&gt;&lt;td align=&quot;right&quot; class=&quot;xl22&quot; x:num=&quot;10000&quot;&gt;$10,000&lt;/td&gt;&lt;/tr&gt;
  389. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  390. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;You are told to choose one.&amp;nbsp; When the boxes show the amounts, it&#39;s obvious you&#39;ll choose the $10,000 one.&amp;nbsp; But let&#39;s say it looks like this:&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  391. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 320px;&quot; x:str=&quot;&quot;&gt;&lt;col span=&quot;5&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot;&gt;&lt;/col&gt;  &lt;tbody&gt;
  392. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl24&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; width: 48pt;&quot; width=&quot;64&quot; x:num=&quot;8000&quot;&gt;$8,000&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot;&gt;?&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot;&gt;?&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot;&gt;?&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot;&gt;?&lt;/td&gt;  &lt;/tr&gt;
  393. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl24&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;?&lt;/td&gt;   &lt;td class=&quot;xl24&quot;&gt;?&lt;/td&gt;   &lt;td class=&quot;xl24&quot;&gt;?&lt;/td&gt;   &lt;td class=&quot;xl24&quot;&gt;?&lt;/td&gt;   &lt;td class=&quot;xl24&quot;&gt;?&lt;/td&gt;  &lt;/tr&gt;
  394. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  395. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In that case, you should choose the $8,000 since it&#39;s not worth the risk as chances are you&#39;ll get much less than $8,000 if you choose a &quot;question&quot; box.&amp;nbsp; Picking a &quot;question&quot; box is essentially gambling, and investing should be going with the percentages.&amp;nbsp; Most likely, you&#39;ll choose a box with less than $8,000, and this is equivalent to choosing an actively managed fund as they typically lag the market on top of having higher fees.&amp;nbsp; A fund that has outperformed in the past is unlikely to do so in the future, and over a 10-year span, something like 85% of actively managed funds lag their benchmark.&amp;nbsp; Schultheis explains that Wall Street is essentially trying to convince you to give them your money so that their experts can &quot;outfox the box&quot; even though the odds are quite grim that they can do so.&amp;nbsp; On top of that, they charge much more so the chances of your total return improving is even slimmer.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  396. &lt;/div&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In the end, this book provides some great analogies and sound advice for simple, long-term investing.&amp;nbsp; It is not a detail oriented analysis on various strategies and securities, but rather a &quot;life book&quot; that uses life lessons and the author&#39;s personal experiences in order to give you a clear picture of how to apply such fundamentals to your own life to ensure financial well-being.&amp;nbsp;&amp;nbsp; The book is an easy read and provides many examples and supporting figures for his philosophy, and, as such, I think it&#39;s a great read for somebody formulating an investing plan.&amp;nbsp; It isn&#39;t, however, revolutionary in nature with its research findings (not that it needs to be) and some may find the tangents distracting rather than enriching.&amp;nbsp; I found it an enjoyable read that looked at a few topics from a new angle, while reinforcing the guiding principles of my own investing philosophy.&lt;/span&gt;&lt;br /&gt;
  397. &lt;br /&gt;
  398. &lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Rating: 4 out of 5 stars &lt;/span&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1994227650835414198'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/1994227650835414198'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/04/book-review-new-coffeehouse-investor.html' title='Book Review: The New Coffeehouse Investor'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://1.bp.blogspot.com/_a9FNMR19fkk/TK9WUeHwLdI/AAAAAAAAAhQ/nFQIrv7svv4/s72-c/new-coffeehouse-investor.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-2271998773080375413</id><published>2010-03-23T16:08:00.002-05:00</published><updated>2010-03-23T16:12:43.061-05:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="asset allocation"/><category scheme="http://www.blogger.com/atom/ns#" term="book review"/><title type='text'>Book Review: All About Asset Allocation</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S6kugdNEg4I/AAAAAAAAAOg/MYT0OU-KNDg/s1600-h/books.gif&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;200&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S6kugdNEg4I/AAAAAAAAAOg/MYT0OU-KNDg/s200/books.gif&quot; style=&quot;height: 100px; width: 100px;&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;i&gt;All About Asset Allocation &lt;/i&gt;(McGraw-Hill, Sept 2005, 256 pp), written by Rick Ferri, CFA, seeks to educate individuals about the fundamentals of asset allocation and why implementing a sound strategy is key to long-term success.&amp;nbsp; Ferri first covers the basics of asset allocation, risk, and diversification, explaining why asset allocation accounts for largely 90% of one&#39;s portfolio performance (that is, market timing and security selection aren&#39;t nearly as significant).&amp;nbsp; He then goes on to break down each asset class and specific index funds to choose to represent such classes.&amp;nbsp; Ferri highly recommends low-cost index funds and explores US equity, international equity, fixed-income, real estate, and alternative investments (e.g. stamps, artwork, collectibles, commodities).&amp;nbsp; Finally, he speaks to managing and building a sound portfolio, realistic expectations, behavioral psychology and its influence on investment decisions, and fund and financial advisor expenses.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  399. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;In the end, Ferri succeeds in his core mission to convince individual investors to ignore most of the &quot;advice&quot; spewed by Wall Street and CNBC and instead rely on a sound systematic and non-emotional portfolio of diversified index funds that explore all asset classes held in appropriate proportions based on age, goals, and risk tolerance.&amp;nbsp; He also provides a list of funds to look at near the end of each chapter.&amp;nbsp; Having said that, frankly, I found the book a bit boring as it is probably more well-suited for a novice investor.&amp;nbsp; He explains concepts in layman terms so that anybody can understand - a positive for most, but I found that it almost too simplistic and not terribly interesting.&amp;nbsp; Ferri simply stated things I already knew and didn&#39;t really add to my knowledge; it simply served as reinforcement (which certainly isn&#39;t a bad thing).&amp;nbsp;&amp;nbsp; One portion where he did go above and beyond a typical book, however, is describing the asset allocation of fixed-income in quite some detail.&amp;nbsp; That certainly is a welcome addition.&amp;nbsp; Ferri stresses the importance of holding asset classes that have little correlation and then re-balancing; backing up these assertions with illustrations as to how this strategy increases overall long-term returns.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  400. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;For an individual investor who wants an easy to read guide on how to develop and stick with a sound asset allocation, &lt;i&gt;All About Asset Allocation &lt;/i&gt;is a great choice.&amp;nbsp; While I found it generally elementary in nature and simply reinforcing concepts I already knew, it certainly is a nice change of pace to read an author who holds a similar investing philosophy as I do.&amp;nbsp; I&#39;d certainly recommend reading the book for those just starting out, individuals who want to simplify their investment approach and lower costs, or those who want confirmation that their portfolio currently covers all appropriate asset classes in reasonable percentages.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  401. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Rating: 4 out of 5 stars&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/2271998773080375413'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/2271998773080375413'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/03/book-review-all-about-asset-allocation.html' title='Book Review: All About Asset Allocation'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://1.bp.blogspot.com/_a9FNMR19fkk/S6kugdNEg4I/AAAAAAAAAOg/MYT0OU-KNDg/s72-c/books.gif" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-6412099387010969775</id><published>2010-02-16T22:13:00.005-06:00</published><updated>2010-11-10T12:07:44.637-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="investing strategies"/><category scheme="http://www.blogger.com/atom/ns#" term="market timing"/><title type='text'>Market Timing using Exponential Moving Averages</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Chartists and momentum investors typically look to &lt;a href=&quot;http://www.investopedia.com/terms/m/movingaverage.asp&quot;&gt;moving averages&lt;/a&gt; (MA) as signals of market movement trends.&amp;nbsp; As such, even if you don&#39;t use such indicators, it is helpful to understand them as other traders certainly do pay attention to them and act on their signals.&amp;nbsp;&amp;nbsp; Moving averages are lagging indicators, meaning they are used to identify pre-existing trends rather than predict future movements.&amp;nbsp; For example, when a stock price is above its 50-day MA, it is seen as being in a uptrend and many investors choose to go long in such circumstances.&amp;nbsp; On the other hand, once a price is below its MA, it is seen as being in a downtrend.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  402. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;While one MA alone gives a generic sense of a price&#39;s trend, more commonly two are used in tandem.&amp;nbsp; As a short-term momentum indicator, the 12- and 26-day MAs are frequently used.&amp;nbsp; When the 12-day average is above the 26-day it is seen as a bullish phase with positive momentum going forward.&amp;nbsp; Conversely, when the 12-day passes below the 26-day, it indicates negative momentum.&amp;nbsp; These two are also used to create more complex indicators such as the &lt;a href=&quot;http://www.investopedia.com/terms/m/macd.asp&quot;&gt;Moving Average Convergence Divergence&lt;/a&gt; (MACD).&lt;br /&gt;
  403. &lt;br /&gt;
  404. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/S3tiBh5ISOI/AAAAAAAAANw/LzRdaL1O1hA/s1600/GOOG.PNG&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;484&quot; src=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/S3tiBh5ISOI/AAAAAAAAANw/LzRdaL1O1hA/s640/GOOG.PNG&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;i&gt;(Source: StockCharts.com)&lt;/i&gt; &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  405. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;For example, in the above chart for Google (&lt;a href=&quot;http://www.google.com/finance?q=goog&quot;&gt;GOOG&lt;/a&gt;), the crossover of the 12-day indicator below the 26-day signals a negative trend and potential sell signal.&amp;nbsp; On the other hand, the MACD signals a slight buy (although it being in negative territory is usually seen as slightly bearish).&amp;nbsp; As you can see, different indicators can say opposite things about the same stock at the same time.&amp;nbsp; Thus, looking at just one in a vacuum doesn&#39;t seem wise as it&#39;s best to have a complete picture.&amp;nbsp; Volume is another key aspect that chartists tend to look at to see if a movement is legitimate or not.&amp;nbsp; (Note that I do not consider myself a chartist or technical analyzer.&amp;nbsp; I find it interesting and appreciate the sentiments learned by such analyses, but prefer to generally rely on fundamentals).&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  406. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;For long term trends, it is more appropriate to use the 50 and 200-day moving averages.&amp;nbsp; The same logic applies as the above, but these signals are much less frequent and are used to identify significant bear and bull markets.&amp;nbsp; There are two types of moving averages - simple and exponential.&amp;nbsp; While the SMA gives the same weight to all the data within the range, the &lt;a href=&quot;http://www.investopedia.com/terms/e/ema.asp&quot;&gt;EMA&lt;/a&gt; gives more weight to the latest data.&amp;nbsp; Thus, EMAs reacts slightly faster to price changes than their SMA counterparts.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  407. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;The Strategy&lt;/b&gt; &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  408. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;An interesting market timing strategy is to use the long-term EMAs as signals to enter and exit the market as key points.&amp;nbsp; Since they&#39;re so long-term, the signals are not very frequent and it&#39;s quite simple to follow.&amp;nbsp;&amp;nbsp; The purpose of such a strategy is to avoid the worst downturns while being able to maintain market positions during bullish phases.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  409. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;I tested a strategy that uses the 50-, 100-, and 200-day exponential moving averages.&amp;nbsp; Using a $10,000 investment in an S&amp;amp;P 500 ETF (SPY), I went back to 1993 to start the backtest and went through the open on 2/16/10.&amp;nbsp; My strategy was quite simple: sell when the 50-day EMA moves below the 200-day EMA and buy when the 50-day EMA moves above the 100- or 200-day EMA.&amp;nbsp; The reason I added the 100-day for the buy signals instead of simply using the 200-day is that in extreme bear markets, the 200-day is far too long of a laggard.&amp;nbsp; Investors would then miss most of the upswing (as what would have occurred in 2009).&amp;nbsp; Plus, I think being in the market more often than not is a reasonable strategy and selling only when downward trends are clear is advisable.&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  410. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Using the above strategy, there were &lt;b&gt;only six roundtrip transactions in 17 years.&amp;nbsp; That is about one buy and sell every three years.&lt;/b&gt;&amp;nbsp; As you can see, this doesn&#39;t require that much monitoring and keeps you in the market for the majority of the time.&amp;nbsp; I didn&#39;t calculate T-bill rates or cash equivalents when the strategy called for being out of the market, so it is inherently at a disadvantage.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  411. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;Results&lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  412. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Of the seven transactions&lt;b&gt; &lt;/b&gt;(one more than previously indicated since I&#39;m including the start and end points), two were marginal losers in the amounts of 3% and 5%.&amp;nbsp; The other five accounted for gains of 1%, 110%, 22%, 58%, and 14%.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  413. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;EMA Timing&lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  414. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 369px;&quot; x:str=&quot;&quot;&gt;&lt;col style=&quot;width: 64pt;&quot; width=&quot;85&quot;&gt;&lt;/col&gt;  &lt;col span=&quot;2&quot; style=&quot;width: 48pt;&quot; width=&quot;64&quot;&gt;&lt;/col&gt;  &lt;col style=&quot;width: 64pt;&quot; width=&quot;85&quot;&gt;&lt;/col&gt;  &lt;col style=&quot;width: 53pt;&quot; width=&quot;71&quot;&gt;&lt;/col&gt;  &lt;tbody&gt;
  415. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center; width: 64pt;&quot; width=&quot;85&quot;&gt;Buy Date&lt;/td&gt;   &lt;td style=&quot;text-align: center; width: 48pt;&quot; width=&quot;64&quot;&gt;Buy Price&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center; width: 48pt;&quot; width=&quot;64&quot;&gt;Shares&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center; width: 64pt;&quot; width=&quot;85&quot;&gt;Cost Basis&lt;/td&gt;   &lt;td style=&quot;text-align: center; width: 53pt;&quot; width=&quot;71&quot;&gt;Sell Date&lt;/td&gt;  &lt;/tr&gt;
  416. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;33998&quot;&gt;1/29/1993&lt;/td&gt;   &lt;td style=&quot;text-align: center;&quot; x:num=&quot;&quot;&gt;43.94&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;227.583&quot;&gt;227.58&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=B2*C2&quot; x:num=&quot;9999.9970199999989&quot;&gt;$10,000.00&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;34437&quot;&gt;4/13/1994&lt;/td&gt;  &lt;/tr&gt;
  417. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;34564&quot;&gt;8/18/1994&lt;/td&gt;   &lt;td style=&quot;text-align: center;&quot; x:num=&quot;&quot;&gt;46.45&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;218.42088568353066&quot;&gt;218.42&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=B3*C3&quot; x:num=&quot;10145.65014&quot;&gt;$10,145.65&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;34677&quot;&gt;12/9/1994&lt;/td&gt;  &lt;/tr&gt;
  418. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;34716&quot;&gt;1/17/1995&lt;/td&gt;   &lt;td style=&quot;text-align: center;&quot; x:num=&quot;&quot;&gt;47.03&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;209.22519455758143&quot;&gt;209.23&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=B4*C4&quot; x:num=&quot;9839.8609000430552&quot;&gt;$9,839.86&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;36073&quot;&gt;10/5/1998&lt;/td&gt;  &lt;/tr&gt;
  419. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;36098&quot;&gt;10/30/1998&lt;/td&gt;   &lt;td style=&quot;text-align: center;&quot; x:num=&quot;&quot;&gt;110&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;187.71304046261557&quot;&gt;187.71&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=B5*C5&quot; x:num=&quot;20648.434450887711&quot;&gt;$20,648.43&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;36817&quot;&gt;10/18/2000&lt;/td&gt;  &lt;/tr&gt;
  420. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;37333&quot;&gt;3/18/2002&lt;/td&gt;   &lt;td style=&quot;text-align: center;&quot; x:num=&quot;&quot;&gt;116.67&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;215.99790590645529&quot;&gt;216.00&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=B6*C6&quot; x:num=&quot;25200.475682106138&quot;&gt;$25,200.48&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;37357&quot;&gt;4/11/2002&lt;/td&gt;  &lt;/tr&gt;
  421. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;37742&quot;&gt;5/1/2003&lt;/td&gt;   &lt;td style=&quot;text-align: center;&quot; x:num=&quot;&quot;&gt;91.9&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;259.92609808699552&quot;&gt;259.93&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=B7*C7&quot; x:num=&quot;23887.208414194891&quot;&gt;$23,887.21&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;39449&quot;&gt;1/2/2008&lt;/td&gt;  &lt;/tr&gt;
  422. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;39965&quot;&gt;6/1/2009&lt;/td&gt;   &lt;td style=&quot;text-align: center;&quot; x:num=&quot;&quot;&gt;94.77&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;397.50015190195489&quot;&gt;397.50&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=B8*C8&quot; x:num=&quot;37671.089395748262&quot;&gt;$37,671.09&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;40224&quot;&gt;2/15/2010&lt;/td&gt;  &lt;/tr&gt;
  423. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  424. &lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 368px;&quot; x:str=&quot;&quot;&gt;&lt;tbody&gt;
  425. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;&lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center; width: 49pt;&quot; width=&quot;65&quot;&gt;Sell Price&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center; width: 65pt;&quot; width=&quot;87&quot;&gt;Sell Value&lt;/td&gt;   &lt;td style=&quot;text-align: center; width: 66pt;&quot; width=&quot;88&quot;&gt;Difference&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center; width: 48pt;&quot; width=&quot;64&quot;&gt;% Net Change&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;text-align: center; width: 48pt;&quot; width=&quot;64&quot;&gt;Cumulative&lt;/td&gt;  &lt;/tr&gt;
  426. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;44.58&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;10145.65014&quot;&gt;$10,145.65&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;145.65312000000085&quot;&gt;$145.65&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;1.4565316340464429E-2&quot;&gt;1.46%&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:fmla=&quot;=PRODUCT(1+$D$2:D2)-1&quot; x:num=&quot;1.4565316340464429E-2&quot;&gt;1.46%&lt;/td&gt;  &lt;/tr&gt;
  427. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;45.05&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;9839.8609000430552&quot;&gt;$9,839.86&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;-305.78923995694458&quot;&gt;-$305.79&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;-3.0139935414424279E-2&quot;&gt;&lt;span style=&quot;color: red;&quot;&gt;-3.01%&lt;/span&gt;&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;-1.6013616767752148E-2&quot;&gt;&lt;span style=&quot;color: red;&quot;&gt;-1.60%&lt;/span&gt;&lt;/td&gt;  &lt;/tr&gt;
  428. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;98.69&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;20648.434450887711&quot;&gt;$20,648.43&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;10808.573550844656&quot;&gt;$10,808.57&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;1.0984477992770572&quot;&gt;109.84%&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;1.0648440604123013&quot;&gt;106.48%&lt;/td&gt;  &lt;/tr&gt;
  429. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;134.25&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;25200.475682106138&quot;&gt;$25,200.48&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;4552.0412312184271&quot;&gt;$4,552.04&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;0.22045454545454546&quot;&gt;22.05%&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;1.5200483191850132&quot;&gt;152.00%&lt;/td&gt;  &lt;/tr&gt;
  430. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;110.59&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;23887.208414194891&quot;&gt;$23,887.21&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;-1313.2672679112475&quot;&gt;-$1,313.27&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;-5.2112796777234904E-2&quot;&gt;&lt;span style=&quot;color: red;&quot;&gt;-5.21%&lt;/span&gt;&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;1.3887215532585122&quot;&gt;138.87%&lt;/td&gt;  &lt;/tr&gt;
  431. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;144.93&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;37671.089395748262&quot;&gt;$37,671.09&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;13783.880981553371&quot;&gt;$13,783.88&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;0.57704026115342755&quot;&gt;57.70%&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;2.7671100621736251&quot;&gt;276.71%&lt;/td&gt;  &lt;/tr&gt;
  432. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;108.04&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;42945.916411487211&quot;&gt;$42,945.92&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;5274.8270157389488&quot;&gt;$5,274.83&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;0.14002321409728835&quot;&gt;14.00%&lt;/td&gt;   &lt;td class=&quot;xl26&quot; style=&quot;text-align: center;&quot; x:num=&quot;3.2945929209374123&quot;&gt;329.46%&lt;/td&gt;  &lt;/tr&gt;
  433. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  434. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;b&gt;Cumulative: &lt;span style=&quot;color: #38761d;&quot;&gt;+329%&amp;nbsp;&lt;/span&gt;&lt;/b&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  435. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;color: #38761d;&quot;&gt;&lt;span style=&quot;color: black;&quot;&gt;The S&amp;amp;P 500 was up &lt;/span&gt;&lt;/span&gt;&lt;b&gt;146% over the same period.&amp;nbsp; &lt;/b&gt;If you had invested $10,000 in 1993 and used the EMA strategy, you&#39;d have $42,946 today, while buy-and-hold would have left you with $24,600.&amp;nbsp; Note that the above only captures capital appreciation and excludes dividends.&amp;nbsp; Thus, the gains are actually greater than stated in both circumstances.&amp;nbsp; As you can see, this timing strategy had some impressive outperformance over this period which encompassed one of the greatest bull markets of all time and two large bear markets in 2000-2002 and 2008.&lt;br /&gt;
  436. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;/div&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S3tmnmMZkPI/AAAAAAAAAN4/2F9vH7k4XLI/s1600-h/EMA+vs+buy+and+hold.PNG&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;518&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S3tmnmMZkPI/AAAAAAAAAN4/2F9vH7k4XLI/s640/EMA+vs+buy+and+hold.PNG&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;i&gt;Source: investingguy.blogspot.com&lt;/i&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;i&gt;Red = S&amp;amp;P 500 buy and hold&lt;/i&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;i&gt;Blue = EMA Timing&lt;/i&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;i&gt; &lt;/i&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  437. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;Similar to other market timing strategies, one can plainly see that it trails buy and hold in continuous bull markets (1993 - 2000).&amp;nbsp; This is no surprise since being out of the market when it&#39;s up virtually every month never helps performance.&amp;nbsp; Despite this, since EMAs indicate past trends, there were only thee very short periods through 2000 that it indicated to be out of the market, and thus the strategy captured the majority of the gains. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  438. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;Another performance figure that I like to examine to measure volatility and risk is the year-by-year values.&amp;nbsp; Of the five years in this sample range wherein the market had a negative return, the EMA strategy outperformed in four of them.&amp;nbsp; In the two worst years, the EMA considerably outperformed.&amp;nbsp; In 2002, the S&amp;amp;P was down 21%, while the EMA strategy called for being in the market only about a month the entire year and thus was down a mere 5%.&amp;nbsp; In the disastrous 2008, the S&amp;amp;P sunk 34%.&amp;nbsp; The EMA strategy signals a sell right at the beginning of the year and never got into buy territory, so it remained unchanged.&amp;nbsp; See below for the year-by-year performance with the better performing strategy in green, if applicable.&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;br /&gt;
  439. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; margin-left: auto; margin-right: auto; text-align: left; width: 234px;&quot; x:str=&quot;&quot;&gt;&lt;/table&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 234px;&quot; x:str=&quot;&quot;&gt;&lt;tbody&gt;
  440. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; width: 48pt;&quot; width=&quot;64&quot;&gt;Year&lt;/td&gt;   &lt;td style=&quot;width: 63pt;&quot; width=&quot;84&quot;&gt;Buy and Hold&lt;/td&gt;   &lt;td style=&quot;width: 65pt;&quot; width=&quot;86&quot;&gt;&amp;nbsp;&amp;nbsp; EMA&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; Strategy&lt;/td&gt;  &lt;/tr&gt;
  441. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;1993&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;6.030951297223508E-2&quot;&gt;6.03%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;6.030951297223508E-2&quot;&gt;6.03%&lt;/td&gt;  &lt;/tr&gt;
  442. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;1994&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;-5.1079734219268924E-2&quot;&gt;-5.11%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;-0.10223501496625886&quot;&gt;-10.22%&lt;/td&gt;  &lt;/tr&gt;
  443. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;1995&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.30216284987277353&quot;&gt;30.22%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.30216284987277375&quot;&gt;30.22%&lt;/td&gt;  &lt;/tr&gt;
  444. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;1996&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.16915579311429019&quot;&gt;16.92%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.16915579311429041&quot;&gt;16.92%&lt;/td&gt;  &lt;/tr&gt;
  445. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;1997&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.23615345528455278&quot;&gt;23.62%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.23615345528455256&quot;&gt;23.62%&lt;/td&gt;  &lt;/tr&gt;
  446. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;1998&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;0.23481133019717748&quot;&gt;23.48%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.12289252145112428&quot;&gt;12.29%&lt;/td&gt;  &lt;/tr&gt;
  447. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;1999&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.15199316186183864&quot;&gt;15.20%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.15199316186183864&quot;&gt;15.20%&lt;/td&gt;  &lt;/tr&gt;
  448. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2000&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;-5.5456171735241533E-2&quot;&gt;-5.55%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;-3.9355992844364973E-2&quot;&gt;-3.94%&lt;/td&gt;  &lt;/tr&gt;
  449. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2001&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;-0.16039387308533914&quot;&gt;-16.04%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;1E-3&quot;&gt;0%&lt;/td&gt;  &lt;/tr&gt;
  450. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2002&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;-0.21434255902378641&quot;&gt;-21.43%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;-5.2112796777234793E-2&quot;&gt;-5.21%&lt;/td&gt;  &lt;/tr&gt;
  451. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2003&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;0.29727652658462955&quot;&gt;29.73%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.21596735582154514&quot;&gt;21.60%&lt;/td&gt;  &lt;/tr&gt;
  452. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2004&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;6.9129287598944655E-2&quot;&gt;6.91%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;6.1641446669365996E-2&quot;&gt;6.16%&lt;/td&gt;  &lt;/tr&gt;
  453. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2005&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;5.8689217758985279E-2&quot;&gt;5.87%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;5.8689217758985279E-2&quot;&gt;5.87%&lt;/td&gt;  &lt;/tr&gt;
  454. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2006&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.1128931309654202&quot;&gt;11.29%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.11289313096541997&quot;&gt;11.29%&lt;/td&gt;  &lt;/tr&gt;
  455. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2007&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;1.6510579257717595E-2&quot;&gt;1.65%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;1.6510579257717595E-2&quot;&gt;1.65%&lt;/td&gt;  &lt;/tr&gt;
  456. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2008&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;-0.34435261707988984&quot;&gt;-34.44%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #38761d;&quot; x:num=&quot;1E-3&quot;&gt;0%&lt;/td&gt;  &lt;/tr&gt;
  457. &lt;tr align=&quot;center&quot; height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt;&quot; x:num=&quot;&quot;&gt;2009&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;color: #6aa84f;&quot; x:num=&quot;0.3775898001716318&quot;&gt;37.76%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; x:num=&quot;0.18571277830537092&quot;&gt;18.57%&lt;/td&gt;  &lt;/tr&gt;
  458. &lt;tr height=&quot;17&quot; style=&quot;height: 12.75pt;&quot;&gt;   &lt;td height=&quot;17&quot; style=&quot;height: 12.75pt; text-align: center;&quot; x:num=&quot;&quot;&gt;2010&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;-3.8533416392275477E-2&quot;&gt;-3.85%&lt;/td&gt;   &lt;td class=&quot;xl24&quot; style=&quot;text-align: center;&quot; x:num=&quot;-3.8533416392275477E-2&quot;&gt;-3.85%&lt;/td&gt;  &lt;/tr&gt;
  459. &lt;/tbody&gt;&lt;/table&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;b&gt;_______________________&lt;/b&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;b&gt;&amp;nbsp; Total&amp;nbsp;&lt;/b&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; +146%&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;span style=&quot;color: #38761d;&quot;&gt;+329%&lt;/span&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  460. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;i&gt;&lt;/i&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S3tqopOVL6I/AAAAAAAAAOI/0H8NoNvS_TI/s1600-h/year-by-year.PNG&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;548&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S3tqopOVL6I/AAAAAAAAAOI/0H8NoNvS_TI/s640/year-by-year.PNG&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;br /&gt;
  461. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;On the other hand, during years the market performed very well, the EMA strategy sometimes underperformed.&amp;nbsp; There were five years of greater than 20% gains: 1995, 1997, 1998, 2003, 2009.&amp;nbsp; The EMA strategy got all the gains of &#39;95 and &#39;97.&amp;nbsp; It captured about half of that in &#39;98, 2/3 of it in 2003, and half in 2009.&amp;nbsp; Since the strategy is a laggard, if the market was up in a year following a bull market, the EMA never signaled a sell and then captured all the gains.&amp;nbsp; If, however, the run-up was after a large correction as those that happened in 2000-2002 and 2008, then it took some time for the buy signal to be initiated and the EMA strategy missed some of the uptick.&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  462. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;b&gt;Conclusion&lt;/b&gt;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  463. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;As a long-term trend indicator, the 50-, 100-, and 200-day exponential moving averages do signal momentum shifts in the market.&amp;nbsp; This simple strategy had an impressive outperformance of the market during this time period, but there is certainly no guarantee that such a pattern will continue to exist.&amp;nbsp; Having said that, I think this strategy actually makes more intuitive sense than Sy Harding&#39;s Seasonal Timing Strategy (that I explored in &lt;a href=&quot;http://investingguy.blogspot.com/2009/06/investing-stategy-market-timing-using.html&quot;&gt;this &lt;/a&gt;post) and requires very few transactions over a long period.&amp;nbsp; Its key to success is exiting the market near the relative beginning of huge downturns.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  464. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;Furthermore, this strategy is successful during periods of high volatility, while during a sideways market, it would simply signal nothing and thus is the same as buy-and-hold.&amp;nbsp; It is for that reason, that I &lt;i&gt;like &lt;/i&gt;it more than many other timing tactics.&amp;nbsp; Instead of trying to enter and exit the market frequently at opportune times, this approach only acts when trends have been clearly established.&amp;nbsp;&amp;nbsp;&lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;br /&gt;
  465. &lt;/div&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;Rather than taking these signals without reservation and having them dictate the complete selling of your equity position, I personally could see risking a bit less and selling about half of your equity position and investing in bonds with that half.&amp;nbsp; That way, it&#39;s a combination of a buy-and-hold and market timing strategy.&amp;nbsp; While no market timing strategy has really shown to outperform the market in &lt;i&gt;all &lt;/i&gt;conditions over a lengthy period of time, those risk averse investors who cannot stomach large downturns might consider this simple EMA timing strategy (or simply reduce their equity percentage).&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6412099387010969775'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6412099387010969775'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/02/market-timing-using-exponential-moving.html' title='Market Timing using Exponential Moving Averages'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://2.bp.blogspot.com/_a9FNMR19fkk/S3tiBh5ISOI/AAAAAAAAANw/LzRdaL1O1hA/s72-c/GOOG.PNG" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-6466972783646746761</id><published>2010-02-04T12:23:00.028-06:00</published><updated>2011-01-03T21:23:04.855-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="market conditions"/><category scheme="http://www.blogger.com/atom/ns#" term="sector assessments"/><title type='text'>2010 Sector Outlook: XLK, XLV, XLU, and XLE</title><content type='html'>&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S6kxXGT5AxI/AAAAAAAAAOo/E1RYzHRIrNM/s1600-h/waba.bmp&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;126&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S6kxXGT5AxI/AAAAAAAAAOo/E1RYzHRIrNM/s200/waba.bmp&quot; width=&quot;150&quot; /&gt;&lt;/a&gt;&lt;/div&gt;Technology, health care, utilities, and energy appear to be the sectors most poised for &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_0&quot;&gt;outperformance&lt;/span&gt; of the market at large in 2010.  Although nobody can effectively and reliably predict the sector movements at any given time (and &lt;a href=&quot;http://investingguy.blogspot.com/2009/07/sector-rotation-strategies.html&quot;&gt;sector rotation strategies&lt;/a&gt; are a high-risk, high-reward proposition), the current macroeconomic factors at play lead me to believe that these four areas will perform well in 2010.  The corresponding Select Sector &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_1&quot;&gt;SPDR&lt;/span&gt; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_2&quot;&gt;ETFs&lt;/span&gt; are &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_3&quot;&gt;XLK&lt;/span&gt;, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_4&quot;&gt;XLV&lt;/span&gt;, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_5&quot;&gt;XLU&lt;/span&gt;, and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_6&quot;&gt;XLE&lt;/span&gt;.  Here is a breakdown of these four industries.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  466. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-weight: bold;&quot;&gt;Technology&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  467. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Although technology had a huge upswing in 2009 (up 54%), I still think there is room for continued upside as the valuation on a forward P/E basis is still reasonable.  The close of &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_7&quot;&gt;XLK&lt;/span&gt; today was 20.84 - a level in the trading range of 18.3 -22 that &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_8&quot;&gt;XLK&lt;/span&gt; was in from the beginning of 2004 until September 2006.  &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_9&quot;&gt;XLK&lt;/span&gt; is down about 9% &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_10&quot;&gt;YTD&lt;/span&gt;, making it a good entry point at this time in my mind.  Although this move has been on some considerable volume, which causes me some concern as high volume often indicates that a move is legitimate.  Nevertheless, I see technology as the single most important catalyst in the worldwide economy for continued recovery and growth.  And I&#39;m cautiously optimistic that we will see that growth this year.  On top of that, technology typically performs well in inflationary periods, which is what many expect us to see in the next year or two.  With its top holdings as Microsoft (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_11&quot;&gt;MSFT&lt;/span&gt;), Apple (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_12&quot;&gt;AAPL&lt;/span&gt;), IBM, AT&amp;amp;T (T), &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_13&quot;&gt;Cisco&lt;/span&gt; (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_14&quot;&gt;CSCO&lt;/span&gt;), and Google (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_15&quot;&gt;GOOG&lt;/span&gt;), technology has some major innovators and stalwarts that are key for our economic well-being.  And with forward P/Es averaging about 13.5 versus a current P/E for the market at large at 16.2, they seem to be a bit undervalued.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  468. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;The are, however, many negatives.  For one, it seems like most pundits and investors are extremely bullish on tech and this oftentimes serves as a &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_16&quot;&gt;contrarian&lt;/span&gt; indicator.  Likewise, in typical stock market cycles, technology leads the way at the beginning of the bull market, but only modestly outperforms six months after the recession.  From a technical perspective, as you can see in the chart below, the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_17&quot;&gt;MACD&lt;/span&gt; signal is showing &quot;sell&quot; with both the EMA-26 and EMA-9 in negative territory, often also seen as a bearish sign.  In addition, the 20-day moving average just pierced through the 50-day moving average from the top (on fairly high volume as I stated earlier), which also signals a &quot;sell.&quot; If I was going only by the technical analysis, I would be a complete bear on tech.  However, I prefer to analyze the fundamentals and use that to dictate my investment choices.  I am certainly &lt;span style=&quot;font-style: italic;&quot;&gt;not &lt;/span&gt;a chartist or momentum trader, although I like to point the technicals out to those who find it intriguing.  Ned Davis research also points to the fact that the breadth is weakening, the seasonality trade has ended, and that production from a factory perspective for high-tech machinery remains quite weak.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  469. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Despite all these negatives, the valuation of the sector and ability of the aforementioned companies to spark an economic rally and innovation war with one another, leads me to think that &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_18&quot;&gt;XLK&lt;/span&gt; will be a good sector to own during 2010.  Tech is always a fairly volatile industry, though, so it&#39;s certainly not for the faint of heart and is a bit riskier of a proposition than perhaps other options.  &lt;span style=&quot;font-style: italic;&quot;&gt;(Disclosure: I picked up some &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_19&quot;&gt;XLK&lt;/span&gt; today, 2/4/10 with a limit order at 20.94.&amp;nbsp; Sold it on 5/11/10 at 22.93 for about a 10% gain in a bit over two months).&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  470. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S2uMzA1T7YI/AAAAAAAAAM4/_VX-pCF2u0A/s1600-h/XLK+chart.png&quot; onblur=&quot;try {parent.deselectBloggerImageGracefully();} catch(e) {}&quot;&gt;&lt;img alt=&quot;&quot; border=&quot;0&quot; id=&quot;BLOGGER_PHOTO_ID_5434592183377456514&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S2uMzA1T7YI/AAAAAAAAAM4/_VX-pCF2u0A/s400/XLK+chart.png&quot; style=&quot;cursor: pointer; display: block; height: 246px; margin: 0px auto 10px; text-align: center; width: 400px;&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-style: italic;&quot;&gt;&lt;span style=&quot;font-size: 85%;&quot;&gt;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-style: italic;&quot;&gt;&lt;span style=&quot;font-size: 85%;&quot;&gt;(Source: StockCharts.com)&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-weight: bold;&quot;&gt;Health Care&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  471. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;This sector will benefit from increased inflation and an aging population in the upcoming year.  Although the one trump card in this sector is certainly any changes coming out of Washington, which may affect the profitability of certain areas.  But such a proposal out of Congress seems unlikely at this point based on what has been passed and the proposals currently floating around that have ample support. Another pause for concern is the ending of patents for several major blockbuster drugs in the next couple years.  The points that make this sector really attractive to me is its defensive nature in times of economic uncertainty, its undervaluation on an absolute basis compared to all other nine sectors (per Ned Davis Research), its ability to deliver sizable dividend yields, and the amount of cash on hand.  &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_20&quot;&gt;XLV&#39;s&lt;/span&gt; top holdings include Johnson and Johnson (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_21&quot;&gt;JNJ&lt;/span&gt;), Pfizer (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_22&quot;&gt;PFE&lt;/span&gt;), Abbott Labs (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_23&quot;&gt;ABT&lt;/span&gt;), Merck (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_24&quot;&gt;MRK&lt;/span&gt;), &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;Amgen&lt;/span&gt; (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_26&quot;&gt;AMGN&lt;/span&gt;), and Bristol-Myers Squibb (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_27&quot;&gt;BMY&lt;/span&gt;).&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  472. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_28&quot;&gt;XLV&lt;/span&gt; is flat &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_29&quot;&gt;YTD&lt;/span&gt; and was up about 20% in 2009.  It&#39;s 20-day MA is still above the 50-day MA signaling a bullish phase (although it&#39;s teetering), while the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_30&quot;&gt;MACD&lt;/span&gt; that is a shorter-term indicator is in a slightly bearish.  Not too much to glean from the technical chart, but the fundamentals to me signal a buy.  &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_31&quot;&gt;XLV&lt;/span&gt; closed at 30.88 today.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  473. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/S2uM0L-B8EI/AAAAAAAAANQ/kXAt4Qzc8PI/s1600-h/XLV+chart.png&quot; onblur=&quot;try {parent.deselectBloggerImageGracefully();} catch(e) {}&quot;&gt;&lt;img alt=&quot;&quot; border=&quot;0&quot; id=&quot;BLOGGER_PHOTO_ID_5434592203546685506&quot; src=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/S2uM0L-B8EI/AAAAAAAAANQ/kXAt4Qzc8PI/s400/XLV+chart.png&quot; style=&quot;cursor: pointer; display: block; height: 247px; margin: 0px auto 10px; text-align: center; width: 400px;&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-style: italic;&quot;&gt;&lt;span style=&quot;font-size: 85%;&quot;&gt;(Source: StockCharts.com)&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-weight: bold;&quot;&gt;Utilities&lt;br /&gt;
  474. &lt;br /&gt;
  475. &lt;/span&gt;Utilities as a sector is quite often defensive and boring; but that is why I like it. Its volatility isn&#39;t that great and many of the companies offer solid dividends.  The demand for utilities will probably remain relatively weak given the state of the housing market, but with energy prices likely increasing and investors seeking undervalued, dividend-oriented plays, I think &lt;span class=&quot;blsp-spelling-corrected&quot; id=&quot;SPELLING_ERROR_32&quot;&gt;utilities&lt;/span&gt; and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_33&quot;&gt;XLU&lt;/span&gt; is a solid bet for 2010.  They only returned about 10% in 2009 and are down about 7% &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_34&quot;&gt;YTD&lt;/span&gt;, but I really expect them to be an attractive place for many risk-averse investors.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  476. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Standard &amp;amp; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_35&quot;&gt;Poor&#39;s&lt;/span&gt; and Ned Davis Research appear to be more negative on this sector that I am, though, so I certainly will admit it if I made a wrong call.  S&amp;amp;P argues that &quot;an ongoing domestic economic recovery will continue to fuel cyclical &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_36&quot;&gt;outperformance&lt;/span&gt; at the expense of this counter-cyclical sector&quot; which is certainly a valid stance.  Utilities tend to perform best in the middle of a stock market bear, certainly not after a large upswing in the market.  However, going by this same logic one would be inclined to snatch up consumer discretionary names, and I think our economic experiences in the past two years and the continued poor employment market are going to lead to a scared consumers.  They certainly can sacrifice luxuries, but will continue to live and pay utility costs.  Similar to S&amp;amp;P, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_37&quot;&gt;NDR&lt;/span&gt; has a list of sector negatives such as &quot;long-term overbought conditions,&quot; &quot;excess capacity,&quot; &quot;low beta,&quot; and &quot;weaker pricing becoming a concern.&quot;  However, they still have it at &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_38&quot;&gt;marketweight&lt;/span&gt; based on shrinking credit spreads despite the fact that valuations suggest they&#39;re not at bargain prices anymore.  From a technical perspective, the signals and money flow are in a bearish phase.  This sector, along with tech, are my two riskier picks.&lt;span style=&quot;font-weight: bold;&quot;&gt;&lt;br /&gt;
  477. &lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/S2uMzwqFJYI/AAAAAAAAANI/nz1Lz0r6JqI/s1600-h/XLU+chart.png&quot; onblur=&quot;try {parent.deselectBloggerImageGracefully();} catch(e) {}&quot;&gt;&lt;img alt=&quot;&quot; border=&quot;0&quot; id=&quot;BLOGGER_PHOTO_ID_5434592196215252354&quot; src=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/S2uMzwqFJYI/AAAAAAAAANI/nz1Lz0r6JqI/s400/XLU+chart.png&quot; style=&quot;cursor: pointer; display: block; height: 243px; margin: 0px auto 10px; text-align: center; width: 400px;&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-style: italic;&quot;&gt;&lt;span style=&quot;font-size: 85%;&quot;&gt;(Source: StockCharts.com)&lt;br /&gt;
  478. &lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-weight: bold;&quot;&gt;Energy&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  479. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Commodities, and oil in particular, have had a rough couple weeks, but since I believe the global bull market will continue, I have to think that oil has some upside.  Crude oil supplies are relatively high from a historical perspective, but it appears that energy is going to prove vital in many of the infrastructure projects being targeted by various governments.  Emerging markets certainly will have increased demand for energy in the upcoming years (and demand in the US should have an uptick with the improved economy) and as a group, the names in the energy field are trading a bit under their valuation.  The MA indicators are in the bullish phase, while the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_39&quot;&gt;MACD&lt;/span&gt; is bearing as is the 3-day cash flow.  &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_40&quot;&gt;XLE&#39;s&lt;/span&gt; largest holdings include &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_41&quot;&gt;ExxonMobil&lt;/span&gt; (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_42&quot;&gt;XOM&lt;/span&gt;), Chevron (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_43&quot;&gt;CVX&lt;/span&gt;), &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_44&quot;&gt;Schlumberger&lt;/span&gt; (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_45&quot;&gt;SLB&lt;/span&gt;), &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_46&quot;&gt;ConocoPhillips&lt;/span&gt; (COP), and Occidental (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_47&quot;&gt;OXY&lt;/span&gt;).&lt;br /&gt;
  480. &lt;br /&gt;
  481. (Update 4/27/10: I would no longer own the energy sector as a result of the BP oil spill that was reported in the last few days.&amp;nbsp; As new information comes and situations change, it&#39;s important to be flexible with your investments.&amp;nbsp; You can&#39;t marry any particular position and when something disastrous like an oil spill occurs, that certainly makes the sector a huge question mark in the short-term.&amp;nbsp; I personally don&#39;t feel that the risk is appropriate to take on and would close my position. &amp;nbsp; This could be bad...really bad.&amp;nbsp; So, I&#39;d get out personally.) &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  482. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;a href=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/S2uMzrtfAZI/AAAAAAAAANA/qg67YSZPBCk/s1600-h/XLE+chart.png&quot; onblur=&quot;try {parent.deselectBloggerImageGracefully();} catch(e) {}&quot;&gt;&lt;img alt=&quot;&quot; border=&quot;0&quot; id=&quot;BLOGGER_PHOTO_ID_5434592194887352722&quot; src=&quot;http://3.bp.blogspot.com/_a9FNMR19fkk/S2uMzrtfAZI/AAAAAAAAANA/qg67YSZPBCk/s400/XLE+chart.png&quot; style=&quot;cursor: pointer; display: block; height: 244px; margin: 0px auto 10px; text-align: center; width: 400px;&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-style: italic;&quot;&gt;&lt;span style=&quot;font-size: 85%;&quot;&gt;(Source: StockCharts.com)&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span style=&quot;font-weight: bold;&quot;&gt;Conclusion&lt;br /&gt;
  483. &lt;br /&gt;
  484. &lt;/span&gt;In the end, we&#39;ll see at the end of this year if these were good picks or not.  Certainly, I re-assess as market conditions and macroeconomic factors at play change (as they undoubtedly will), but I think these four are a good starting point and I will happily admit it if I am off-base.  It will be interesting to see how these perform.    On a separate note, what would I avoid in 2010?  Treasuries.  Gold also seems set for a pull-back after a monstrous 2009, even if that&#39;s contradictory to my above statements regarding inflation.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  485. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;As I have said in previous posts, I don&#39;t think market/sector speculation and investing in non-diversified offerings is the way to go for the vast majority of investors.  However, I think it&#39;s reasonable to make some gambles (and yes, they&#39;re educated gambles) with 5-10% of your assets if you have the necessary time and knowledge, and &lt;span style=&quot;font-style: italic;&quot;&gt;enjoy &lt;/span&gt;performing such trades.&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  486. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;Here are the closing prices as of 2/4/10 for the four aforementioned &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_48&quot;&gt;ETFs&lt;/span&gt; as well as a S&amp;amp;P 500 Index Fund.  Performance will be updated sporadically and compared to the return of the S&amp;amp;P at large:&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  487. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_49&quot;&gt;XLK&lt;/span&gt;: 20.84&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_50&quot;&gt;XLV&lt;/span&gt;: 30.88&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_51&quot;&gt;XLU&lt;/span&gt;: 28.99&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_52&quot;&gt;XLE&lt;/span&gt;: 54.29&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;SPY: 106.44&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;br /&gt;
  488. &lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: left;&quot;&gt;&lt;i&gt;Updated Performance:&lt;/i&gt;&lt;/div&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;&lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 403px;&quot; x:str=&quot;&quot;&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;&lt;/div&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 403px;&quot; x:str=&quot;&quot;&gt;&lt;tbody&gt;
  489. &lt;tr align=&quot;center&quot; height=&quot;43&quot; style=&quot;height: 32.25pt;&quot;&gt;   &lt;td class=&quot;xl24&quot; height=&quot;43&quot; style=&quot;height: 32.25pt; width: 61pt;&quot; width=&quot;81&quot;&gt;Sector&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot;&gt;Start Price&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot;&gt;Current Price&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot;&gt;Change&lt;/td&gt;   &lt;td class=&quot;xl25&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot;&gt;Through&lt;/td&gt;  &lt;/tr&gt;
  490. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;XLK&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot; x:num=&quot;&quot;&gt;20.84&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot; x:num=&quot;&quot;&gt;25.19&lt;/td&gt;   &lt;td class=&quot;xl28&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot; x:num=&quot;5.6000000000000001E-2&quot;&gt;+20.9%&lt;/td&gt;   &lt;td class=&quot;xl29&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot; x:num=&quot;40239&quot;&gt;Year end&lt;/td&gt;  &lt;/tr&gt;
  491. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot;&gt;&lt;/td&gt;  &lt;/tr&gt;
  492. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;XLV&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot; x:num=&quot;&quot;&gt;30.88&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot; x:num=&quot;&quot;&gt;31.50&lt;/td&gt;   &lt;td class=&quot;xl28&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot; x:num=&quot;3.3000000000000002E-2&quot;&gt;+2.0%&lt;/td&gt;   &lt;td class=&quot;xl29&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot; x:num=&quot;40239&quot;&gt;Year end&lt;/td&gt;  &lt;/tr&gt;
  493. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot;&gt;&lt;/td&gt;  &lt;/tr&gt;
  494. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;XLU&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot; x:num=&quot;&quot;&gt;28.99&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot; x:num=&quot;&quot;&gt;31.34&lt;/td&gt;   &lt;td class=&quot;xl28&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot; x:num=&quot;2.5000000000000001E-2&quot;&gt;+8.1%&lt;/td&gt;   &lt;td class=&quot;xl29&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot; x:num=&quot;40239&quot;&gt;Year end&lt;/td&gt;  &lt;/tr&gt;
  495. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot;&gt;&lt;/td&gt;  &lt;/tr&gt;
  496. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;XLE&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot; x:num=&quot;&quot;&gt;54.29&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot; x:num=&quot;&quot;&gt;68.25&lt;/td&gt;   &lt;td class=&quot;xl28&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot; x:num=&quot;5.7000000000000002E-2&quot;&gt;+25.7%&lt;/td&gt;   &lt;td class=&quot;xl29&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot; x:num=&quot;40239&quot;&gt;Year end&lt;/td&gt;  &lt;/tr&gt;
  497. &lt;tr align=&quot;center&quot; height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot;&gt;&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot;&gt;&lt;/td&gt;  &lt;/tr&gt;
  498. &lt;tr align=&quot;center&quot; height=&quot;43&quot; style=&quot;height: 32.25pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;43&quot; style=&quot;height: 32.25pt; width: 61pt;&quot; width=&quot;81&quot;&gt;S&amp;amp;P   500&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 61pt;&quot; width=&quot;81&quot; x:num=&quot;&quot;&gt;106.44&lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;width: 63pt;&quot; width=&quot;84&quot; x:num=&quot;&quot;&gt;125.75&lt;/td&gt;   &lt;td class=&quot;xl28&quot; style=&quot;width: 59pt;&quot; width=&quot;79&quot; x:num=&quot;5.6000000000000001E-2&quot;&gt;+18.1%&lt;/td&gt;   &lt;td class=&quot;xl29&quot; style=&quot;width: 59pt;&quot; width=&quot;78&quot; x:num=&quot;40239&quot;&gt;Year end&lt;/td&gt;  &lt;/tr&gt;
  499. &lt;tr height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl26&quot; height=&quot;22&quot; style=&quot;height: 16.5pt; text-align: center; width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;/td&gt;&amp;nbsp;&lt;/tr&gt;
  500. &lt;/tbody&gt;&lt;/table&gt;&lt;table border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; style=&quot;border-collapse: collapse; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; width: 403px;&quot; x:str=&quot;&quot;&gt;&lt;tbody&gt;
  501. &lt;tr height=&quot;22&quot; style=&quot;height: 16.5pt;&quot;&gt;   &lt;td class=&quot;xl27&quot; style=&quot;text-align: center; width: 61pt;&quot; width=&quot;81&quot;&gt;&lt;br /&gt;
  502. &lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;text-align: center; width: 63pt;&quot; width=&quot;84&quot;&gt;&lt;br /&gt;
  503. &lt;/td&gt;   &lt;td class=&quot;xl27&quot; style=&quot;text-align: center; width: 59pt;&quot; width=&quot;79&quot;&gt;&lt;br /&gt;
  504. &lt;/td&gt;     &lt;/tr&gt;
  505. &lt;/tbody&gt;&lt;/table&gt;&lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;This further illustrates how hard it is to predict sectors.&amp;nbsp; The cumulative average of the four sectors was +14.2%.&amp;nbsp; However, this doesn&#39;t include dividends.&amp;nbsp; I really should like them up to make the comparison truly valid but don&#39;t have time right now.&lt;/div&gt;</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6466972783646746761'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6466972783646746761'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/02/2010-sector-outlook-xlk-xlv-xlu-and-xle.html' title='2010 Sector Outlook: XLK, XLV, XLU, and XLE'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://1.bp.blogspot.com/_a9FNMR19fkk/S6kxXGT5AxI/AAAAAAAAAOo/E1RYzHRIrNM/s72-c/waba.bmp" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-6317493113886008099</id><published>2010-02-02T17:39:00.011-06:00</published><updated>2010-02-03T14:26:06.109-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Fidelity"/><title type='text'>Fidelity Strikes Back! Reduces Commisions to $7.95 and Offering Free Trading on 25 iShares ETFs</title><content type='html'>Well, that didn&#39;t take long.  Fidelity Investments &lt;a href=&quot;http://personal.fidelity.com/products/trading/index_content.shtml.cvsr&quot;&gt;slashed&lt;/a&gt; its commissions for trading to $7.95 for all customers and is now offering 25 extremely popular &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_0&quot;&gt;iShares&lt;/span&gt; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_1&quot;&gt;ETFs&lt;/span&gt; without trading fees.  This is clearly in response to &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_2&quot;&gt;Schwab&#39;s&lt;/span&gt; similar announcements in December.  The increased competition and offerings are really a positive occurrence for investors and I certainly welcome the changes.&lt;br /&gt;&lt;br /&gt;The free &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_3&quot;&gt;ETF&lt;/span&gt; portfolio spans all the necessary asset classes to create a low-cost diversified portfolio - from small-cap value in US equities to international emerging markets to many fixed income such as the aggregate bond index, TIPS, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_4&quot;&gt;muni&lt;/span&gt; bonds, and investment grade bonds.  The &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_5&quot;&gt;ETFs&lt;/span&gt; are much more extensive than the commission-free ones from &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_6&quot;&gt;Schwab&lt;/span&gt;.  Not only that, but since they are the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_7&quot;&gt;BlackRock&lt;/span&gt; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_8&quot;&gt;iShares&lt;/span&gt; products instead of the brokerage&#39;s own product (as &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_9&quot;&gt;Schwab&lt;/span&gt; did), they have very high volumes and a much larger pool of assets, which typically leads to smaller bid-ask spreads.  On the other hand, many of the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_10&quot;&gt;iShares&lt;/span&gt; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_11&quot;&gt;ETFs&lt;/span&gt;&#39; expense ratios are higher than the Vanguard and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_12&quot;&gt;Schwab&lt;/span&gt; equivalents.  For example, the &lt;span class=&quot;blsp-spelling-corrected&quot; id=&quot;SPELLING_ERROR_13&quot;&gt;Emerging&lt;/span&gt; Markets &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_14&quot;&gt;ETF&lt;/span&gt; clocks in at 0.72%, while &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_15&quot;&gt;VWO&lt;/span&gt; is 0.27% for essentially the same product.  In the end, though, the difference is fairly negligible for most of the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_16&quot;&gt;ETFs&lt;/span&gt; so shouldn&#39;t be a grave concern.&lt;br /&gt;&lt;br /&gt;Here&#39;s a screenshot from Fidelity&#39;s website of the various &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_17&quot;&gt;ETFs&lt;/span&gt; offered sorted by category:&lt;br /&gt;&lt;br /&gt;&lt;a onblur=&quot;try {parent.deselectBloggerImageGracefully();} catch(e) {}&quot; href=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/S2jy3WMgAxI/AAAAAAAAAMw/pXs-HvX-YU8/s1600-h/ishares.PNG&quot;&gt;&lt;img style=&quot;margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 314px; height: 400px;&quot; src=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/S2jy3WMgAxI/AAAAAAAAAMw/pXs-HvX-YU8/s400/ishares.PNG&quot; alt=&quot;&quot; id=&quot;BLOGGER_PHOTO_ID_5433859983087239954&quot; border=&quot;0&quot; /&gt;&lt;/a&gt;&lt;br /&gt;It doesn&#39;t say how long the offer is going to last, but I&#39;d expect the reduced commissions will be for quite some time or else &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_18&quot;&gt;there would&lt;/span&gt; be some serious backlash.  Another website &lt;a href=&quot;http://www.earthtimes.org/articles/show/fidelityreg-launches-bold-etf-offering,1147331.shtml&quot;&gt;is reporting&lt;/a&gt; the free trading for the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_19&quot;&gt;iShares&lt;/span&gt; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_20&quot;&gt;ETFs&lt;/span&gt; will be for &quot;at least three years.&quot;&lt;br /&gt;&lt;br /&gt;This is great news for the owners of more than 12 million Fidelity brokerage accounts.  Kathleen A. Murphy, president of Personal Investing at Fidelity, released a statement: &lt;blockquote&gt;Fidelity has partnered with the leading &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_21&quot;&gt;ETF&lt;/span&gt; provider in the market to bring investors the best brokerage offering in the industry today.  Simply put, we’re offering the broadest selection of commission-free &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_22&quot;&gt;ETFs&lt;/span&gt; from the undisputed &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_23&quot;&gt;ETF&lt;/span&gt; leader, and it’s only available through Fidelity.  When you combine this new initiative with the fact that Fidelity offers       the largest funds supermarket in the industry, sophisticated online investment planning tools and extensive, institutional-grade stock research, you can see our relentless focus on providing every advantage to Fidelity customers so they can be more successful investors in today’s fast-paced and fluid market environment.&lt;/blockquote&gt;&lt;br /&gt;Michael &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_24&quot;&gt;Latham&lt;/span&gt;, Head of US &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;iShares&lt;/span&gt;, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_26&quot;&gt;BlackRock&lt;/span&gt;, expressed his excitement about the agreement:&lt;br /&gt;&lt;blockquote&gt;We’re very excited that Fidelity, a proven leader in the retail brokerage industry, is promoting &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_27&quot;&gt;ETFs&lt;/span&gt; and furthering &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_28&quot;&gt;iShares&lt;/span&gt; availability to investors. The 25 &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_29&quot;&gt;iShares&lt;/span&gt; Funds that Fidelity chose to include in this offering represent leading indices in each asset class and can be used as the foundation for building an investor’s portfolio. Fidelity is strongly committed to investors, and their decision to offer &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_30&quot;&gt;iShares&lt;/span&gt; is a great validation of &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_31&quot;&gt;ETFs&lt;/span&gt; as a mainstream investment.&lt;/blockquote&gt;&lt;br /&gt;In any event, now it&#39;s even easier to create a great portfolio with Fidelity and these &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_32&quot;&gt;ETFs&lt;/span&gt; are great indexed, low-cost, high-volume ones to choose.  My post that I wrote 10 days ago, &quot;&lt;a href=&quot;http://investingguy.blogspot.com/2010/01/comparison-of-vanguard-charles-schwab.html&quot;&gt;Comparison of Vanguard, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_33&quot;&gt;Schwab&lt;/span&gt;, and Fidelity Fund and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_34&quot;&gt;ETF&lt;/span&gt; Offerings&lt;/a&gt;,&quot; needs an update already!  I used many &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_35&quot;&gt;iShares&lt;/span&gt; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_36&quot;&gt;ETFs&lt;/span&gt; for the &quot;alternate&quot; column, though, so clearly you can tell I hold them in high esteem. In the end, there is really no excuse to pay exorbitant fees with any broker.  They all have ample offerings with low-costs such that investors can easily create a complete portfolio with an appropriate asset allocation for their age, risk, and objectives.  The increased competitive, low-cost, diversified offers from various brokerage houses is certainly a welcome development in the brokerage landscape.</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6317493113886008099'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6317493113886008099'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/02/fidelity-strikes-back-reduces.html' title='Fidelity Strikes Back! Reduces Commisions to $7.95 and Offering Free Trading on 25 iShares ETFs'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://4.bp.blogspot.com/_a9FNMR19fkk/S2jy3WMgAxI/AAAAAAAAAMw/pXs-HvX-YU8/s72-c/ishares.PNG" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-6172513801136855280</id><published>2010-01-21T12:06:00.079-06:00</published><updated>2012-12-15T16:50:13.252-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="Fidelity"/><category scheme="http://www.blogger.com/atom/ns#" term="fund offerings"/><category scheme="http://www.blogger.com/atom/ns#" term="Schwab"/><category scheme="http://www.blogger.com/atom/ns#" term="Vanguard"/><title type='text'>Comparison of Vanguard, Schwab, and Fidelity Fund and ETF Offerings</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  506. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  507. &lt;a href=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/S10iShZ0KdI/AAAAAAAAAMQ/s1-UhL1zLPI/s1600-h/image.PNG&quot;&gt;&lt;img alt=&quot;&quot; border=&quot;0&quot; id=&quot;BLOGGER_PHOTO_ID_5430534427278322130&quot; src=&quot;http://2.bp.blogspot.com/_a9FNMR19fkk/S10iShZ0KdI/AAAAAAAAAMQ/s1-UhL1zLPI/s200/image.PNG&quot; style=&quot;cursor: pointer; float: right; height: 56px; margin: 0pt 0pt 10px 10px; width: 200px;&quot; /&gt;&lt;/a&gt;Vanguard historically has been the flagship low-cost index provider and &lt;a href=&quot;https://personal.vanguard.com/us/FundsByName&quot;&gt;offers nearly every imaginable index fund&lt;/a&gt; possible, but others are now giving Vanguard a run for its money.  So, I thought it would be a good time to list fairly equivalent funds from three of the largest 401k and IRA providers: Vanguard, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_1&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_1&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt;, and Fidelity.  Note that I am attempting to pick the lowest-cost index fund with no loads and no transaction fees that &lt;span style=&quot;font-style: italic;&quot;&gt;appear most frequently in &lt;a href=&quot;http://investingguy.blogspot.com/2009/10/lazy-portfolios.html&quot;&gt;lazy portfolios&lt;/a&gt;&lt;/span&gt;.  &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_2&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_2&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt;, along with &lt;a href=&quot;http://www.schwab.com/public/schwab/research_strategies/mutual_funds/funds?cmsid=P-981005&amp;amp;lvl1=research_strategies&amp;amp;lvl2=mutual_funds&quot;&gt;their own funds&lt;/a&gt;, offers 2,000 choices without any loads or transactions from the &lt;a href=&quot;http://www.schwab.com/public/schwab/research_strategies/mutual_funds/directory/list.html?filter=OneSource&amp;amp;sortBy=&amp;amp;selection=3&amp;amp;Go=Go&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_3&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_3&quot;&gt;OneSource&lt;/span&gt;&lt;/span&gt; list&lt;/a&gt;.  (An easier place to navigate a sub-set of those funds is their &lt;a href=&quot;http://www.schwab.com/public/schwab/investment_products/mutual_funds/expert_fund_picks?cmsid=P-1319626&amp;amp;lvl1=investment_products&amp;amp;lvl2=mutual_funds&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_4&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_4&quot;&gt;OneSource&lt;/span&gt;&lt;/span&gt; Select list&lt;/a&gt;).  Similarly, Fidelity has  &lt;a href=&quot;http://personal.fidelity.com/products/funds/content/WhatYouCanBuy/no_transaction.shtml.cvsr&quot;&gt;No Transaction Fee Funds (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_5&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_5&quot;&gt;NTF&lt;/span&gt;&lt;/span&gt;)&lt;/a&gt; to choose from as well as their low-cost &lt;a href=&quot;http://personal.fidelity.com/products/funds/content/index_funds.shtml&quot;&gt;Spartan line&lt;/a&gt; of funds.&lt;/div&gt;
  508. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  509. &lt;br /&gt;&lt;/div&gt;
  510. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  511. &lt;span style=&quot;font-weight: bold;&quot;&gt;Comparison of Mutual Funds&lt;/span&gt;&lt;/div&gt;
  512. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  513. &lt;br /&gt;&lt;/div&gt;
  514. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  515. Following is a list of fund offerings in table form for easy comparison, listing the ticker symbol, net expense ratio, and minimum investment.  (I used the lower share class, but those with a large amount of assets are typically charged a lower expense.) &lt;i&gt;Update 10/6/2010.&amp;nbsp; Vanguard has &lt;a href=&quot;http://investingguy.blogspot.com/2010/10/vanguard-reduces-minimum-required-for.html&quot;&gt;reduced &lt;/a&gt;the minimum amount required to invest in its Admiral Shares from $100,000 to $10,000, making this share class more available to the majority of individual investors.&amp;nbsp; Due to this change, I have updated the chart with applicable expense ratios.&amp;nbsp;&lt;/i&gt;  I will go in general order from the most commonly held funds to the least, but all are fairly common.  Also, I&#39;m choosing the fund I personally would choose to fulfill that particular asset class based on the offerings, but your opinion may differ.  If there is an &quot;OR,&quot; the first one listed is slightly preferred, in my mind.&amp;nbsp; Note that due to the competitive pressures, these three brokerage firms now offer a varying degree of commission free ETFs.&amp;nbsp; These cover a wider array of asset classes, so if you&#39;re interested instead in investing in ETFs, skip to the next section.&lt;br /&gt;
  516. &lt;br /&gt;
  517. Note I used Vanguard&#39;s admiral share class expense ratio when making this determination, which requires a $10,000 minimum investment.&amp;nbsp; On the other hand, I used Fidelity&#39;s investor class which also requires a $10,000 minimum. Their Advantage class has lower expense ratios, but requires a minimum of $100,000 which is out of range for most investors so I thought I would make it a more fair comparison. While costs and expenses are important, note that all three firms offer some of the best expense ratios available on the market.&amp;nbsp; &lt;b&gt;One should not fixate or stress out about a tiny difference in expense ratio as long as what you are paying is minimal&lt;/b&gt; &lt;b&gt;and near the market leader.&lt;/b&gt; &lt;br /&gt;
  518. &lt;br /&gt;
  519. For example, the 0.02% difference between VTSAX (Vanguard Total US Stock Market Admiral) and SWTSX amounts to $2 a year in expenses for every $10,000 invested.&amp;nbsp; $2/year?!&amp;nbsp; The tracking error would most likely be a much more significant variable than the $2 difference.&amp;nbsp; If I had money with Schwab already, I wouldn&#39;t hesitate at all to invest in SWTSX.&amp;nbsp; And many of these track a slightly different index, so that would be of graver concern.&amp;nbsp; As another example, the fact that VGTSX contains emerging markets, while SWISX is only developed (as indicated in the footnotes) will prove to be more of a predictor of after tax performance than the tiny difference in expenses.&amp;nbsp; It&#39;s certainly not worth the effort to add another brokerage firm in that case.&amp;nbsp; While previously I&#39;ve stressed that seemingly small differences in expense ratios compound to significant amounts over the course of several years, that&#39;s typically when comparing index funds to active funds, which often have 1%+ expense ratios.&amp;nbsp;&amp;nbsp; In any event, here&#39;s the comparison chart:&lt;/div&gt;
  520. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;
  521. &lt;br /&gt;&lt;/div&gt;
  522. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; text-align: center;&quot;&gt;
  523. &lt;span style=&quot;font-weight: bold;&quot;&gt;&quot;Equivalent&quot; Mutual Funds Offered by Vanguard, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_6&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_6&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt;, and Fidelity&lt;/span&gt;&lt;/div&gt;
  524. &lt;table border=&quot;1&quot; cellpadding=&quot;2&quot; cellspacing=&quot;0&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; height: 812px; margin-left: auto; margin-right: auto; text-align: left; width: 425px;&quot;&gt;&lt;tbody&gt;
  525. &lt;tr&gt;&lt;th style=&quot;text-align: center;&quot;&gt;Asset Class and Category&lt;/th&gt; &lt;th style=&quot;text-align: center;&quot;&gt;Vanguard&lt;/th&gt; &lt;th style=&quot;text-align: center;&quot;&gt;&lt;span id=&quot;SPELLING_ERROR_28&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_7&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_7&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/th&gt; &lt;th style=&quot;text-align: center;&quot;&gt;Fidelity$&lt;/th&gt;  &lt;/tr&gt;
  526. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Total US Stock Market&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_8&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_8&quot;&gt;VTSMX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  527. 0.18%@&lt;br /&gt;
  528. &amp;nbsp;0.07%+&lt;br /&gt;
  529. $3,000&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_9&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_9&quot;&gt;SWTSX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  530. 0.09%&lt;br /&gt;
  531. $100&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_10&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_10&quot;&gt;FSTMX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  532. 0.10%&lt;br /&gt;
  533. $10,000&lt;/td&gt; &lt;/tr&gt;
  534. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;International Index Fund&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_11&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_11&quot;&gt;VGTSX&lt;/span&gt;&lt;/span&gt;*&lt;br /&gt;
  535. 0.34%&lt;br /&gt;
  536. 0.20%` &lt;br /&gt;
  537. $3,000&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_12&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_12&quot;&gt;SWISX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  538. 0.19%&lt;br /&gt;
  539. $100&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;FSGUX&lt;br /&gt;
  540. 0.24%&lt;br /&gt;
  541. $10,000&lt;/td&gt; &lt;/tr&gt;
  542. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Total Bond Market&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_14&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_14&quot;&gt;VBMFX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  543. 0.22%&lt;br /&gt;
  544. 0.12% &lt;br /&gt;
  545. $3,000&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_15&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_15&quot;&gt;RidgeWorth&lt;/span&gt;&lt;/span&gt; Intermediate&lt;br /&gt;
  546. Bond I -&lt;br /&gt;
  547. &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_16&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_16&quot;&gt;SAMIX&lt;/span&gt;&lt;/span&gt;#&lt;br /&gt;
  548. 0.32%&lt;br /&gt;
  549. $2,500&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_17&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_17&quot;&gt;FBIDX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  550. 0.22%&lt;br /&gt;
  551. $10,000&lt;/td&gt; &lt;/tr&gt;
  552. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;REIT&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_18&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_18&quot;&gt;VGSIX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  553. 0.26%&lt;br /&gt;
  554. 0.13% &lt;br /&gt;
  555. $3,000&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Cohen &amp;amp; Steers Realty Shares -&lt;br /&gt;
  556. &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_19&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_19&quot;&gt;CSRSX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  557. 1.00%&lt;br /&gt;
  558. $10,000&lt;br /&gt;
  559. -------&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_20&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_20&quot;&gt; &lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  560. &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_20&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_20&quot;&gt;OR SWASX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  561. 1.05%&lt;br /&gt;
  562. $100&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_21&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_21&quot;&gt;FRXIX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  563. 0.26%&lt;br /&gt;
  564. $10,000&lt;/td&gt; &lt;/tr&gt;
  565. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Inflation-Protected Bond&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;br /&gt;
  566. &lt;br /&gt;
  567. &lt;span id=&quot;SPELLING_ERROR_13&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_23&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_23&quot;&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  568. &lt;span id=&quot;SPELLING_ERROR_13&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_23&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_23&quot;&gt;VIPSX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  569. 0.25%&lt;/span&gt;&lt;br /&gt;
  570. &lt;span id=&quot;SPELLING_ERROR_13&quot;&gt;0.12%&lt;br /&gt;
  571. $3,000&lt;/span&gt;&lt;br /&gt;
  572. &lt;br /&gt;
  573. &lt;br /&gt;
  574. &lt;span id=&quot;SPELLING_ERROR_13&quot;&gt;&lt;br /&gt;
  575. &lt;/span&gt;&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_24&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_24&quot;&gt;ACITX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  576. 0.49%&lt;br /&gt;
  577. $2,500&lt;br /&gt;
  578. &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  579. -------&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  580. &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_25&quot;&gt;OR SWRSX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  581. 0.50%&lt;br /&gt;
  582. $100&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_26&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_26&quot;&gt;FINPX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  583. 0.45%&lt;br /&gt;
  584. $2,500&lt;/td&gt; &lt;/tr&gt;
  585. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Small-Cap&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_27&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_27&quot;&gt;NAESX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  586. 0.28%&lt;br /&gt;
  587. 0.14% &lt;br /&gt;
  588. $3,000&lt;/td&gt; &lt;td style=&quot;background-color: white; color: black; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_28&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_28&quot;&gt;SWSSX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  589. 0.19%&lt;br /&gt;
  590. $100&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_29&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_29&quot;&gt;FSSPX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  591. 0.31%&lt;br /&gt;
  592. $10,000&lt;/td&gt; &lt;/tr&gt;
  593. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Small-Cap Value&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_30&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_30&quot;&gt;VISVX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  594. 0.28%&lt;br /&gt;
  595. $3,000&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;No good equivalent; use small blend&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;No good equivalent; use small blend&lt;/td&gt; &lt;/tr&gt;
  596. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Emerging Markets&lt;/td&gt; &lt;td style=&quot;background-color: white; text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_31&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_31&quot;&gt;VEIEX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  597. 0.35%&lt;br /&gt;
  598. 0.22% &lt;br /&gt;
  599. $3,000&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_32&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_32&quot;&gt;SFENX&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  600. 0.61%&lt;br /&gt;
  601. $100&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;FPEMX&lt;br /&gt;
  602. 0.33% &lt;br /&gt;
  603. $10,000&lt;/td&gt; &lt;/tr&gt;
  604. &lt;/tbody&gt;&lt;/table&gt;
  605. &lt;div style=&quot;color: black; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  606. &lt;span style=&quot;font-size: x-small;&quot;&gt;Information is accurate as of 1/21/2010&lt;/span&gt;&lt;br /&gt;
  607. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated Fidelity funds 2/12/2012 &lt;/span&gt;&lt;br /&gt;
  608. &lt;br /&gt;
  609. &lt;span style=&quot;font-size: x-small;&quot;&gt;Notes:&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  610. &lt;span style=&quot;font-size: x-small;&quot;&gt;$ Fidelity Investor Share class &lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;(&amp;lt;$10,000 investment) &lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;expense ratio is listed; Advantage Share Class (&lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&amp;lt;$100,000 investment)has lower expense ratios is not included.&lt;/span&gt;&lt;br /&gt;
  611. &lt;span style=&quot;font-size: x-small;&quot;&gt;@Vanguard investor share class (&amp;lt;$10,000 investment) expense ratio is listed first for each asset category&lt;/span&gt;&lt;br /&gt;
  612. &lt;span style=&quot;font-size: x-small;&quot;&gt;+Vanguard Admiral Share class (&amp;gt;$10,000 investment) expense ratio is listed second for each asset category, if available (note: the ticker symbol for this share class is different than the one listed.&amp;nbsp; See &lt;a href=&quot;https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/aggregateviews?cl=all&quot;&gt;this&lt;/a&gt; page for details.)&lt;/span&gt;&lt;/div&gt;
  613. &lt;div style=&quot;color: black; font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  614. &lt;/div&gt;
  615. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  616. &lt;div style=&quot;color: black;&quot;&gt;
  617. &lt;span style=&quot;font-size: x-small;&quot;&gt;*Vanguard&#39;s International Fund is the only one the includes Emerging Markets (22%).  &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_34&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_34&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; and Fidelity&#39;s index funds are only developed nations. Thus, a more appropriate comparison would be Developed Markets Index, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_35&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_35&quot;&gt;VDMIX&lt;/span&gt;&lt;/span&gt; (0.29% ER).  However, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_36&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_36&quot;&gt;VGTSX&lt;/span&gt;&lt;/span&gt; is recommended over &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_37&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_37&quot;&gt;VDMIX&lt;/span&gt;&lt;/span&gt; for a Lazy Portfolio, so it is included instead.&lt;/span&gt;&lt;/div&gt;
  618. &lt;div style=&quot;color: black;&quot;&gt;
  619. &lt;/div&gt;
  620. &lt;div style=&quot;color: black;&quot;&gt;
  621. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  622. &lt;div style=&quot;color: black;&quot;&gt;
  623. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  624. &lt;div style=&quot;color: black;&quot;&gt;
  625. &lt;span style=&quot;font-size: x-small;&quot;&gt;`The Admiral Share Class of Vanguard&#39;s Total International Fund is supposed to be available in Q1 2011, &lt;a href=&quot;http://investingguy.blogspot.com/2010/09/vanguard-adjusts-international-equity.html&quot;&gt;unveiled&lt;/a&gt; with other changes to the fund, including tracking an index that includes international small-caps as well as Canada and Israel.&lt;br /&gt;
  626. #&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_38&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_38&quot;&gt;Schwab&#39;s&lt;/span&gt;&lt;/span&gt; own Total Bond Market Index, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_39&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_39&quot;&gt;SWLBX&lt;/span&gt;&lt;/span&gt;, is not used here for a couple reasons.  First, it has a fairly high 0.55% net expense ratio (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_40&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_40&quot;&gt;Schwab&#39;s&lt;/span&gt;&lt;/span&gt; weakness is definitely bond funds).  Secondly, looking at the past performance, it clearly wasn&#39;t tracking the index it was supposed to (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_41&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_41&quot;&gt;Barclays&lt;/span&gt;&lt;/span&gt; Capital U.S. Aggregate Bond index.)  Take a look at the comparison of &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_42&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_42&quot;&gt;SAMIX&lt;/span&gt;&lt;/span&gt;, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_43&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_43&quot;&gt;VBMFX&lt;/span&gt;&lt;/span&gt;, and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_44&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_44&quot;&gt;SWLBX&lt;/span&gt;&lt;/span&gt; in 2008 &lt;a href=&quot;http://finance.yahoo.com/echarts?s=SAMIX#chart5:symbol=samix;range=20080102,20090101;compare=vbmfx+swlbx;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined&quot;&gt;here&lt;/a&gt;.  There is certainly some variation between &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_45&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_45&quot;&gt;SAMIX&lt;/span&gt;&lt;/span&gt; and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_46&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_46&quot;&gt;VBMFX&lt;/span&gt;&lt;/span&gt;, but &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_47&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_47&quot;&gt;SWLBX&lt;/span&gt;&lt;/span&gt; isn&#39;t even closely correlated with those two.  For the year of 2008, the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_48&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_48&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; bond fund was down nearly 9%, while the other two were up just over 1%. Investigating it further, apparently a law firm &lt;a href=&quot;http://www.dyerberens.com/content/view/48/13/&quot;&gt;is investigating the fund &lt;/a&gt;and its managers for &quot;possible misrepresentations, omissions and/or breaches of fiduciary duties&quot; as it was investing in high risk &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_49&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_49&quot;&gt;CMOs&lt;/span&gt;&lt;/span&gt; as opposed to the stated objectives.  Certainly, past performance is not indicative of future results, but any fund manager that made that mistake (whether purposefully or not) should not be trusted with your money.  Fidelity&#39;s diversified total bond fund, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_50&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_50&quot;&gt;FTBFX&lt;/span&gt;&lt;/span&gt; (ER = 0.45%) also had a disastrous 2008 (for a bond fund), down a whopping 15% at one point (even worse than the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_51&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_51&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; fund!).  Thus, it looks like &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_52&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_52&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; is in good company and I&#39;d avoid the Fidelity fund as well.&lt;br /&gt;
  627. &lt;/span&gt;&lt;/div&gt;
  628. &lt;br /&gt;
  629. &lt;div&gt;
  630. &lt;/div&gt;
  631. &lt;div&gt;
  632. &lt;span style=&quot;font-weight: bold;&quot;&gt;Fund and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_82&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_82&quot;&gt;ETF&lt;/span&gt;&lt;/span&gt; Comparison&lt;/span&gt;&lt;/div&gt;
  633. &lt;div&gt;
  634. &lt;br /&gt;&lt;/div&gt;
  635. &lt;div&gt;
  636. Here&#39;s  a list of the same funds listed above (investor status; admiral status is cheaper) next to the ETF offerings from Vanguard, Schwab, and  Fidelity/iShares with the net expense ratios listed.&amp;nbsp; I have listed an alternative ETF as well where the choices are slimmer; these will be subject to your standard trading fee.&amp;nbsp; (Update 5/5/2010: Vanguard Brokerage Service clients  can now trade all 43 Vanguard ETFs commission free.  This is in addition  to the news that Fidelity customers can trade 25 popular iShares ETFs  commission free, so your choices are much more widespread now for  commission free ETF trading. And Schwab has its own 11 funds to choose  from.)&amp;nbsp;   Note that the Schwab ETFs are newer so  haven&#39;t had the time to acquire as many assets as the others. But for  the typical investor, they will serve you well if you have a &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_96&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_96&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt;  account and plan to dollar cost average.&amp;nbsp;  Just be sure to make the  purchase with a limit order instead of a market order.&amp;nbsp; Other firms are  more well-established and have historically been popular with traders.&amp;nbsp; Again, lowest expense offering in &lt;span style=&quot;background-color: yellow;&quot;&gt;yellow&lt;/span&gt;. &lt;br /&gt;
  637. &lt;br /&gt;
  638. &lt;b&gt;NOTE: These expenses are only accurate as to when they were last updated and are no longer current as the firms continue to change their expense ratios. Schwab has even further reduced their costs. At this point, the expenses for most of these funds are so low that the tracking error as well as bid/ask spread are of greater concern than any expense ratio. &lt;/b&gt;For example, a Schwab fund that has an expense ratio of 0.06% vs. a Vanguard fund that has an expense ratio of 0.09% may not actually be &quot;cheaper&quot; due to a lower trading volume leading to inflated bid/ask spreads. Also, a fund with smaller assets under management or a non-ideal procedure may lag the index they are attempting to match. A total stock market index can have a tracking error of 0.1% or more which dwarfs a 0.03% difference in expense ratio. If the Schwab fund has a historical tracking error that is 0.1% greater than the corresponding Vanguard fund, for example, it may not actually be a better option. I recommend researching historical tracking errors, current bid/ask spreads and trading volumes when making a decision. All three firms have low cost offerings, though, so I wouldn&#39;t worry all that much about small differences. The competition on expense ratios has gotten so fierce that they are probably less of concern than the other aforementioned factors.&lt;/div&gt;
  639. &lt;br /&gt;
  640. &lt;div&gt;
  641. &lt;div style=&quot;text-align: center;&quot;&gt;
  642. &lt;span style=&quot;font-weight: bold;&quot;&gt;Index Funds/Commission-Free ETFs Commonly Used in Portfolios&lt;o:p&gt;&lt;/o:p&gt;&lt;br /&gt;
  643. &lt;/span&gt;&lt;/div&gt;
  644. &lt;table border=&quot;1&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;MsoNormalTable&quot; style=&quot;width: 615px;&quot;&gt;&lt;tbody&gt;
  645. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  646. &lt;b&gt;Asset    Class&lt;o:p&gt;&lt;/o:p&gt;&lt;/b&gt;&lt;/div&gt;
  647. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  648. &lt;b&gt;Vangrd   Mutual Fund&lt;o:p&gt;&lt;/o:p&gt;&lt;/b&gt;&lt;/div&gt;
  649. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  650. &lt;b&gt;Vangrd   ETF&lt;o:p&gt;&lt;/o:p&gt;&lt;/b&gt;&lt;/div&gt;
  651. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  652. &lt;b&gt;Schwab   ETF&lt;o:p&gt;&lt;/o:p&gt;&lt;/b&gt;&lt;/div&gt;
  653. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  654. &lt;b&gt;Fidelity/   iShares&amp;nbsp;&lt;/b&gt;&lt;br /&gt;
  655. &lt;b&gt;ETF&lt;o:p&gt;&lt;/o:p&gt;&lt;/b&gt;&lt;/div&gt;
  656. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  657. &lt;b&gt;Altrnate&lt;/b&gt;&lt;br /&gt;
  658. &lt;b&gt;   ETF&lt;o:p&gt;&lt;/o:p&gt;&lt;/b&gt;&lt;/div&gt;
  659. &lt;/td&gt;  &lt;/tr&gt;
  660. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  661. Total    US Stock Market&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  662. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  663. VTSMX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  664. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  665. .18/.07%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  666. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  667. VTI&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  668. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  669. 0.07%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  670. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  671. SCHB&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  672. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  673. 0.06%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  674. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  675. IWV&lt;br /&gt;
  676. 0.21%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  677. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  678. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  679. &lt;/td&gt;   &lt;/tr&gt;
  680. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  681. Extended    Market&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  682. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  683. VEXMX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  684. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  685. .30/.13%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  686. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  687. VXF&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  688. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  689. 0.15%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  690. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  691. SCHM&lt;br /&gt;
  692. &lt;span style=&quot;font-size: x-small;&quot;&gt;(Mid-Cap)&lt;/span&gt;&lt;br /&gt;
  693. &lt;o:p&gt;0.13%&lt;/o:p&gt;&lt;/div&gt;
  694. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  695. IJH&lt;br /&gt;
  696. 0.22%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  697. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  698. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  699. &lt;/td&gt;   &lt;/tr&gt;
  700. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  701. Small-Cap&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  702. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  703. NAESX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  704. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  705. .28/.14%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  706. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  707. VB&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  708. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  709. 0.17%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  710. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  711. SCHA&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  712. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  713. 0.13%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  714. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  715. IWM&lt;br /&gt;
  716. 0.20%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  717. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  718. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  719. &lt;/td&gt;   &lt;/tr&gt;
  720. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  721. Small-Cap    Growth&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  722. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  723. VISGX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  724. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  725. 0.28%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  726. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  727. VBK&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  728. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  729. 0.15%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  730. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  731. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  732. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  733. &lt;st1:city w:st=&quot;on&quot;&gt;&lt;st1:place w:st=&quot;on&quot;&gt;IWO&lt;/st1:place&gt;&lt;/st1:city&gt;&lt;br /&gt;
  734. 0.25%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  735. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  736. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  737. &lt;/td&gt;   &lt;/tr&gt;
  738. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  739. Small-Cap    Value&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  740. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  741. VISVX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  742. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  743. 0.28%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  744. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  745. VBR&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  746. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  747. 0.15%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  748. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  749. SFNFX&amp;amp;&lt;br /&gt;
  750. &lt;span style=&quot;font-size: x-small;&quot;&gt;(Small-Mid Mutual Fund)&lt;/span&gt; &lt;br /&gt;
  751. &lt;o:p&gt;0.35%&lt;/o:p&gt;&lt;/div&gt;
  752. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  753. IWN&lt;br /&gt;
  754. 0.25%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  755. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  756. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  757. &lt;/td&gt;   &lt;/tr&gt;
  758. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  759. Value&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  760. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  761. VIVAX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  762. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  763. .26/.14%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  764. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  765. VTV&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  766. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  767. 0.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  768. &lt;/td&gt;    &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  769. SCHV&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  770. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  771. 0.13%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  772. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  773. IWD&lt;br /&gt;
  774. 0.20%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  775. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  776. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  777. &lt;/td&gt;   &lt;/tr&gt;
  778. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  779. REIT    Index&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  780. &lt;/td&gt;   &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  781. VGSIX&lt;br /&gt;
  782. .26/.13%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  783. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  784. VNQ&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  785. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  786. 0.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  787. &lt;/td&gt;    &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  788. SCHH&lt;br /&gt;
  789. &lt;o:p&gt;0.13%&lt;/o:p&gt;&lt;/div&gt;
  790. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  791. IYR&lt;br /&gt;
  792. &lt;o:p&gt;0.47%&lt;/o:p&gt;&lt;/div&gt;
  793. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  794. RWR&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  795. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  796. 0.25%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  797. &lt;/td&gt;   &lt;/tr&gt;
  798. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  799. International    Index&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  800. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  801. VGTSX@&lt;br /&gt;
  802. .32/.2%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  803. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  804. VXUS@&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  805. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  806. 0.20%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  807. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  808. &lt;div style=&quot;color: black;&quot;&gt;
  809. 75% SCHF/&lt;/div&gt;
  810. &lt;o:p&gt;&lt;span style=&quot;color: black;&quot;&gt;25% SCHE combo .16%&lt;/span&gt;&lt;/o:p&gt;&lt;/div&gt;
  811. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; text-align: center; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;ACWX&lt;br /&gt;
  812. 0.34%&lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div style=&quot;text-align: center;&quot;&gt;
  813. -&lt;/div&gt;
  814. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  815. &lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  816. &lt;/td&gt;   &lt;/tr&gt;
  817. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  818. Developed    Markets&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  819. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  820. VDMIX&lt;br /&gt;
  821. 0.29%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  822. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  823. VEA&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  824. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  825. 0.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  826. &lt;/td&gt;    &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  827. SCHF&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  828. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  829. 0.13%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  830. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  831. EFA&lt;br /&gt;
  832. 0.35%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  833. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  834. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  835. &lt;/td&gt;   &lt;/tr&gt;
  836. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  837. Emerging    Markets&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  838. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  839. VEIEX&lt;br /&gt;
  840. .35/.22%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  841. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  842. VWO&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  843. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  844. 0.22%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  845. &lt;/td&gt;    &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  846. SCHE&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  847. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  848. 0.25%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  849. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  850. EEM&lt;br /&gt;
  851. 0.69%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  852. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  853. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  854. &lt;/td&gt;   &lt;/tr&gt;
  855. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  856. Pacific    Stock&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  857. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  858. VPACX&lt;br /&gt;
  859. .26/.14%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  860. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  861. VPL&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  862. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  863. 0.18%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  864. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  865. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  866. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  867. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  868. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  869. EPP&amp;amp;&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  870. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  871. 0.50%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  872. &lt;/td&gt;   &lt;/tr&gt;
  873. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  874. European    Stock&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  875. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  876. VEURX&lt;br /&gt;
  877. .26/.14%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  878. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  879. VGK&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  880. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  881. 0.18%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  882. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div style=&quot;text-align: center;&quot;&gt;
  883. N/A&lt;/div&gt;
  884. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  885. &lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  886. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  887. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  888. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  889. IEV&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  890. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  891. 0.60%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  892. &lt;/td&gt;   &lt;/tr&gt;
  893. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  894. International    Value&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  895. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  896. VTRIX&lt;br /&gt;
  897. 0.47%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  898. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  899. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  900. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  901. SFNNX&amp;amp;&lt;br /&gt;
  902. &lt;span style=&quot;font-size: x-small;&quot;&gt;Mutual Fund &lt;/span&gt;&lt;br /&gt;
  903. &lt;o:p&gt;0.35%&lt;/o:p&gt;&lt;/div&gt;
  904. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  905. IDV&lt;br /&gt;
  906. &lt;o:p&gt;0.50%&lt;/o:p&gt;&lt;/div&gt;
  907. &lt;/td&gt;    &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  908. EFV/DWX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  909. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  910. .40/.48%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  911. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  912. &lt;br /&gt;&lt;/div&gt;
  913. &lt;/td&gt;  &lt;/tr&gt;
  914. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  915. International    Small-Cap&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  916. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  917. VFSVX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  918. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  919. 0.55%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  920. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  921. VSS&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  922. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  923. 0.33%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  924. &lt;/td&gt;    &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  925. SCHC&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  926. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  927. 0.35%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  928. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  929. SCZ&lt;br /&gt;
  930. 0.40%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  931. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  932. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  933. &lt;/td&gt;   &lt;/tr&gt;
  934. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  935. Total    Bond&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  936. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  937. VBMFX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  938. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  939. 0.22%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  940. &lt;/td&gt;    &lt;td style=&quot;background-color: white; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  941. BND&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  942. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  943. 0.11%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  944. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div style=&quot;text-align: center;&quot;&gt;
  945. SCHZ&lt;br /&gt;
  946. 0.10% &lt;/div&gt;
  947. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  948. &lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  949. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  950. AGG&lt;br /&gt;
  951. 0.22%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  952. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  953. -&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  954. &lt;/td&gt;   &lt;/tr&gt;
  955. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  956. Inflation-Prot    Securities&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  957. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  958. VIPSX&lt;br /&gt;
  959. .25/.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  960. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div style=&quot;text-align: center;&quot;&gt;
  961. N/A&lt;/div&gt;
  962. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  963. &lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  964. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div style=&quot;text-align: center;&quot;&gt;
  965. SCHP&lt;br /&gt;
  966. 0.14%&lt;/div&gt;
  967. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  968. &lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  969. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  970. TIP&lt;br /&gt;
  971. 0.20%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  972. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  973. IPE&lt;br /&gt;
  974. &lt;o:p&gt;0.19%&lt;/o:p&gt;&lt;/div&gt;
  975. &lt;/td&gt;   &lt;/tr&gt;
  976. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  977. High-Yield    Corporate&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  978. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  979. VWEHX&lt;br /&gt;
  980. .32/.15%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  981. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  982. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  983. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  984. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  985. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  986. HYG&lt;br /&gt;
  987. &lt;o:p&gt;0.50%&lt;/o:p&gt;&lt;/div&gt;
  988. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  989. JNK&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  990. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  991. 0.40%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  992. &lt;/td&gt;   &lt;/tr&gt;
  993. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  994. Long-Term    Treasury&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  995. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  996. VUSTX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  997. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  998. .25/.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  999. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1000. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1001. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1002. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1003. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1004. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1005. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1006. TLT/TLH&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1007. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1008. .15/.15%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1009. &lt;/td&gt;   &lt;/tr&gt;
  1010. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1011. Interm-Term    Treasury&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1012. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1013. VFITX&lt;br /&gt;
  1014. .25/.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1015. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1016. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1017. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1018. SCHR&lt;br /&gt;
  1019. &lt;o:p&gt;0.12%&lt;/o:p&gt;&lt;/div&gt;
  1020. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1021. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1022. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1023. FIVZ/IEF&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1024. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1025. .15/.15%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1026. &lt;/td&gt;   &lt;/tr&gt;
  1027. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1028. Short-Term    Treasury&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1029. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1030. VFISX&lt;br /&gt;
  1031. .22/.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1032. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1033. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1034. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1035. SCHO&lt;br /&gt;
  1036. &lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1037. &lt;div style=&quot;text-align: center;&quot;&gt;
  1038. 0.12%&lt;/div&gt;
  1039. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1040. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1041. &lt;/td&gt;    &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1042. TUZ/SHY&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1043. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1044. .09/.15%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1045. &lt;div align=&quot;center&quot; class=&quot;MsoNormal&quot; style=&quot;text-align: center;&quot;&gt;
  1046. &lt;br /&gt;&lt;/div&gt;
  1047. &lt;/td&gt;   &lt;/tr&gt;
  1048. &lt;tr&gt;   &lt;td style=&quot;padding: 1.5pt; width: 92.25pt;&quot; valign=&quot;top&quot; width=&quot;123&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1049. Short-Term    Index&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1050. &lt;/td&gt;   &lt;td style=&quot;background-color: yellow; padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1051. VBISX&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1052. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1053. 22/.12%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1054. &lt;/td&gt;   &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1055. BSV&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1056. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1057. 0.14%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1058. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1059. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1060. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 81pt;&quot; valign=&quot;top&quot; width=&quot;108&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1061. N/A&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1062. &lt;/td&gt;    &lt;td style=&quot;padding: 1.5pt; width: 1in;&quot; valign=&quot;top&quot; width=&quot;96&quot;&gt;&lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1063. CSJ#&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1064. &lt;div align=&quot;center&quot; style=&quot;text-align: center;&quot;&gt;
  1065. 0.20%&lt;o:p&gt;&lt;/o:p&gt;&lt;/div&gt;
  1066. &lt;div align=&quot;center&quot; class=&quot;MsoNormal&quot; style=&quot;text-align: center;&quot;&gt;
  1067. &lt;br /&gt;&lt;/div&gt;
  1068. &lt;/td&gt;   &lt;/tr&gt;
  1069. &lt;/tbody&gt;&lt;/table&gt;
  1070. &lt;span style=&quot;font-weight: bold;&quot;&gt;  &lt;/span&gt;&lt;span style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif; font-size: x-small;&quot;&gt;Information first gathered on 1/21/2010&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  1071. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1072. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 2/2/2010 after Fidelity&#39;s &lt;a href=&quot;http://investingguy.blogspot.com/2010/02/fidelity-strikes-back-reduces.html&quot;&gt;introduction&lt;/a&gt;  of 25 commission-free iShares&lt;/span&gt;&lt;/div&gt;
  1073. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1074. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 5/2/2010 since Vanguard&#39;s 43 ETFs now trade commission-free&lt;br /&gt;
  1075. &lt;/span&gt; &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 6/22/10 after Schwab  reduced the expense ratio for its ETFs &lt;/span&gt;&lt;/div&gt;
  1076. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1077. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 9/20/10 after Schwab released its bond ETFs&lt;/span&gt;&lt;br /&gt;
  1078. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 1/31/11 for Schwab Mid-Cap and REIT ETFs as well as new Vanguard International Admiral Class fund and ETF Share Class&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  1079. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 2/25/11 after Vanguard reduced ERs on EM, Euro, Pacific, Foreign Small (&lt;a href=&quot;https://personal.vanguard.com/us/insights/article/fund-announcement-02252011&quot;&gt;Announcement&lt;/a&gt;)&lt;/span&gt;&lt;br /&gt;
  1080. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 7/14/11 for Schwab&#39;s Aggregate Bond ETF and updated ERs on BND and AG; updated other Vanguard and iShares ETF ERs&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  1081. &lt;span style=&quot;font-size: x-small;&quot;&gt;Updated 2/12/12 for Fidelity&#39;s IYR, ACWX, IDV, and HYG. &lt;/span&gt;&lt;/div&gt;
  1082. &lt;br /&gt;
  1083. &lt;br /&gt;
  1084. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1085. &lt;span style=&quot;font-size: x-small;&quot;&gt;Note 1: Commission-free only if you have your brokerage  account with the provider (certain iShares are listed under &quot;alternate&quot;  since not part of the commission-free list)&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1086. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1087. &lt;span style=&quot;font-size: x-small;&quot;&gt;Note 2: Vanguard investor share class (&amp;lt;$10,000 investment) expense ratio is listed first for each asset category.&amp;nbsp; Vanguard Admiral Share class (&amp;gt;$10,000 investment) expense ratio is listed second for each asset category&lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;, if available &lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;(note: the ticker symbol for this share class is different than the one listed.&amp;nbsp; See &lt;a href=&quot;https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/aggregateviews?cl=all&quot;&gt;this&lt;/a&gt; page for details.)&lt;/span&gt;&lt;br /&gt;
  1088. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;b&gt;Important Note 3&lt;/b&gt;: As of 5/4/2011, it appears Vanguard increased ER on some of their funds, including VISVX from 0.28% to 0.37%.&amp;nbsp; However, Vanguard explains: &quot;&lt;span class=&quot;comp-Div&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt;The expense  ratios of some Vanguard funds appear to have increased recently, but  appearances can be deceiving. Fund expense ratios now reflect guidance  from the Securities and Exchange Commission (SEC) about reporting  requirements for funds that hold business development companies (BDCs),  not any change in the costs incurred by fund shareholders.&quot;&amp;nbsp; &lt;/span&gt;&lt;/span&gt;&lt;a href=&quot;https://personal.vanguard.com/us/insights/article/bdc-expense-ratios-04292011&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;https://personal.vanguard.com/us/insights/article/bdc-expense-ratios-04292011&lt;/span&gt;&lt;/a&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span class=&quot;comp-Div&quot; id=&quot;comp-div&quot; type=&quot;Div&quot;&gt; This applies to 15 of their funds.&amp;nbsp; Thus, the fees investors pay to the fund hasn&#39;t changed at all in actuality.&amp;nbsp; As I understand it, a new accounting rule by the SEC makes Vanguard state the expenses that are charged by the underlying securities held by the fund and add them to the management expenses. &amp;nbsp; As of now, I have not adjusted the above, but I will monitor it.&amp;nbsp; I&#39;m not sure if other fund families have also already adhered to the new SEC standard and are reporting increased expense ratios for some of their funds.&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;
  1089. &lt;/span&gt;&lt;/div&gt;
  1090. &lt;/div&gt;
  1091. &lt;div&gt;
  1092. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1093. &lt;span style=&quot;font-size: x-small;&quot;&gt;@The Vanguard International fund and ETF are the only ones that also contain small-cap international exposure at the market weight.&amp;nbsp; The Schwab and Fidelity counterparts are simply large-cap international holdings.&amp;nbsp; Thus, the Vanguard funds do not need to be supplemented with International Small-Cap, while it would be advisable for the others to do so. &amp;nbsp; &lt;/span&gt;&lt;/div&gt;
  1094. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1095. &lt;span style=&quot;font-size: x-small;&quot;&gt;#Only includes corporates&lt;/span&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;br /&gt;
  1096. &lt;span style=&quot;font-size: x-small;&quot;&gt;&amp;amp;Schwab&#39;s Fundamental Index Funds are mutual funds that follow the RAFI index.&amp;nbsp; While their net expense ratios are competitive, they are subsidized and their gross expense ratios are larger.&amp;nbsp; SFSNX = 0.53%, SFNNX = 0.61%.&amp;nbsp; Thus, if you choose to invest, keep an eye out that the expense ratios don&#39;t increase as Schwab could pull a bait and switch (keep expenses low to get investors in and then jack them up).&amp;nbsp; For this reason and the fact that they don&#39;t tend to be very tax-efficient, I would be reluctant to invest in these funds in taxable accounts.&amp;nbsp; In retirement accounts, tax-efficiency doesn&#39;t matter and if they pull the bait and switch, you can transfer your shares to another fund without any tax ramifications.&amp;nbsp; So, it wouldn&#39;t be much of a concern in those cases.&lt;/span&gt;&lt;/div&gt;
  1097. &lt;span style=&quot;font-weight: bold;&quot;&gt;&lt;span style=&quot;font-size: 85%;&quot;&gt; &lt;/span&gt; &lt;/span&gt;&lt;br /&gt;
  1098. &lt;span style=&quot;font-weight: bold;&quot;&gt;&lt;span style=&quot;font-size: 85%;&quot;&gt; &lt;/span&gt; &lt;/span&gt;&lt;/div&gt;
  1099. &lt;span style=&quot;font-size: small;&quot;&gt;Note  that Vanguard has a patented fund/ETF structure such that they are  simply share classes of one another.&amp;nbsp; This makes the funds slightly more  tax efficient than other fund alternatives since they benefit from the  ETF presence.&amp;nbsp; Additionally, this unique structure allows investors to  convert their mutual funds shares to ETFs for free &lt;i&gt;without realizing  any capital gains&lt;/i&gt; &lt;i&gt;or losses&lt;/i&gt;.&amp;nbsp; The reverse (converting ETF  shares to a mutual fund shares) is not possible, though.&amp;nbsp; This is quite a  nice setup for those who prefer the automatic investing schedules or  NAV pricing of mutual funds. After a certain amount is accumulated, one  can simply convert the shares to ETFs to take advantage of the smaller  expense ratio.&amp;nbsp; And not worry about any taxable event.&lt;/span&gt;&lt;br /&gt;
  1100. &lt;br /&gt;
  1101. &lt;span style=&quot;font-size: small;&quot;&gt;If you have a Fidelity account, there are five fixed  income funds that have free trading: Barclays Aggregate (AGG), Barclays  TIPS (TIP), iBoxx $ Investment Grade Corporate (LQD), JP Morgan USD  Emerging Markets (EMB), and S&amp;amp;P National AMT-Free Municipal  (MUB).  AGG should be the backbone of your bond portfolio with a nice  mix of TIP in there, if desired (a 2:1 ratio of these two funds is a  common bond portfolio in its entirety).  If you really want HY bonds  (which rival equities in their volatility), then EMB is a decent proxy  for HYG and VWEHX.  LQD is a good fund to avoid treasuries, but it also  quite risky for a bond fund.  MUB is a good choice in taxable accounts  for high-income investors.&lt;/span&gt;&lt;/div&gt;
  1102. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1103. &lt;/div&gt;
  1104. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1105. &lt;br /&gt;
  1106. &lt;span style=&quot;font-weight: bold;&quot;&gt;&lt;span style=&quot;font-weight: bold;&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_54&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_54&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; and Fidelity Lazy Portfolios&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  1107. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1108. &lt;br /&gt;&lt;/div&gt;
  1109. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1110. As you can see, there are some good choices and some not so decent ones.  Personally, if I were to set up a Lazy Portfolio with &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_55&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_55&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; or Fidelity, I&#39;d avoid the expensive funds in favor of the cheaper ones even if it didn&#39;t slice and dice as much as I intended.  Even better, I&#39;d invest in a cheaper equivalent &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_56&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_56&quot;&gt;ETF&lt;/span&gt;&lt;/span&gt; for those expensive funds (&lt;i&gt;update: especially now with free trades&lt;/i&gt;).   For example, instead of purchasing Cohen &amp;amp; Steers Realty Shares (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_58&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_58&quot;&gt;CSRSX&lt;/span&gt;&lt;/span&gt;; 1.00% ER), it&#39;d be a much wiser decision to go with the equivalent &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_59&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_59&quot;&gt;ETF&lt;/span&gt;&lt;/span&gt;, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_60&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_60&quot;&gt;iShares&lt;/span&gt;&lt;/span&gt; Cohen &amp;amp; Steers Realty Majors (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_61&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_61&quot;&gt;ICF&lt;/span&gt;&lt;/span&gt;) with its 0.35% ER or Vanguard REIT Index &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_62&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_62&quot;&gt;ETF&lt;/span&gt;&lt;/span&gt; (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_63&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_63&quot;&gt;VNQ&lt;/span&gt;&lt;/span&gt;) with its 0.11% ER. &lt;/div&gt;
  1111. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1112. &lt;br /&gt;&lt;/div&gt;
  1113. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1114. Here&#39;s a good mutual fund &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_64&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_64&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; Lazy Portfolio in my mind (somewhat modeled off of Dr. Bernstein&#39;s No &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_65&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_65&quot;&gt;Brainer&lt;/span&gt;&lt;/span&gt;):&lt;/div&gt;
  1115. &lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1116. US Total Stock (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_66&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_66&quot;&gt;SWTSX&lt;/span&gt;&lt;/span&gt;) - 25%&lt;/div&gt;
  1117. &lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1118. International Index (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_67&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_67&quot;&gt;SWISX&lt;/span&gt;&lt;/span&gt;) - 25%&lt;/div&gt;
  1119. &lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1120. Intermediate Bond (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_68&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_68&quot;&gt;SAMIX&lt;/span&gt;&lt;/span&gt;) - 25%&lt;/div&gt;
  1121. &lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1122. Small-Cap (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_69&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_69&quot;&gt;SWSSX&lt;/span&gt;&lt;/span&gt;) -25%&lt;/div&gt;
  1123. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1124. &lt;br /&gt;&lt;/div&gt;
  1125. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1126. And here&#39;s an approved Fidelity Lazy Portfolio using only funds:&lt;/div&gt;
  1127. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1128. US Total Stock (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_70&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_70&quot;&gt;FSTMX&lt;/span&gt;&lt;/span&gt;) - 25%&lt;/div&gt;
  1129. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1130. International Index (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_71&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_71&quot;&gt;FSIIX&lt;/span&gt;&lt;/span&gt;) - 25%&lt;/div&gt;
  1131. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1132. US Bond Index (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_72&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_72&quot;&gt;FBIDX&lt;/span&gt;&lt;/span&gt;) - 25%&lt;/div&gt;
  1133. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1134. US Extended Market (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_73&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_73&quot;&gt;FSEMX&lt;/span&gt;&lt;/span&gt;) - 25%&lt;/div&gt;
  1135. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1136. &lt;br /&gt;&lt;/div&gt;
  1137. &lt;div style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1138. Again, if you want to add REIT, TIPS, emerging markets, or small-cap value, I&#39;d recommend using &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_74&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_74&quot;&gt;ETFs&lt;/span&gt;&lt;/span&gt;.  (Although the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_75&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_75&quot;&gt;Schwab&lt;/span&gt;&lt;/span&gt; funds aren&#39;t terrible if you&#39;re investing a small amount since they have only a $100 minimum.)  In fact, a lot of investors these days prefer to create the entirety Lazy Portfolio with &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_76&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_76&quot;&gt;ETFs&lt;/span&gt;&lt;/span&gt;.  This can make sense depending on your personal circumstances. See &lt;a href=&quot;http://investingguy.blogspot.com/2009/07/mutual-funds-vs-etfs-which-makes-most.html&quot;&gt;this &lt;/a&gt;post for more explanation of funds vs. &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_77&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_77&quot;&gt;ETFs&lt;/span&gt;&lt;/span&gt; and consult &lt;a href=&quot;https://personal.vanguard.com/us/faces/JSP/Funds/Tools/FundsToolsEtfCostSelectionContent.jsp&quot;&gt;this Vanguard calculator&lt;/a&gt; to compare costs of equivalent funds/&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_78&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_78&quot;&gt;ETFs&lt;/span&gt;&lt;/span&gt;.   If you go the &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_79&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_79&quot;&gt;ETF&lt;/span&gt;&lt;/span&gt; route, you clearly cannot invest $100 at a time repeatedly as those commissions that typically range from $7-20 would be prohibitively expensive.  &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_80&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_80&quot;&gt;ETFs&lt;/span&gt;&lt;/span&gt; do offer a lot of other advantages over mutual funds, though, such as better tax efficiency, dynamic prices, easier to tax loss harvest, and lower costs in general.  Essentially, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_81&quot;&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_81&quot;&gt;ETFs&lt;/span&gt;&lt;/span&gt; are cheaper to own, but they have transaction costs each time you make a purchase.&amp;nbsp; Update: Again, there are now several ETFs to choose from that have no transaction fees, so this barrier for ETF investing has essentially been struck down.&amp;nbsp; There still are valid reasons to choose mutual funds over ETFs, though, such as ease of automatic investing, ability to purchase partial shares such that investments are round amounts, buying at the NAV at the end of the day, not having to place a limit order in the middle of the workday, etc.&amp;nbsp; For those investors with accounts at Vanguard, it might make sense to purchase mutual funds and convert to lower-cost ETFs at a later time if the above reasons make mutual funds more appealing at the onset for you (again, this is due to their patented structure and will not cause you to realize any capital gains).&lt;/div&gt;
  1139. &lt;div face=&quot;Georgia,&amp;quot;&quot; style=&quot;font-family: Georgia,&amp;quot;Times New Roman&amp;quot;,serif;&quot;&gt;
  1140. &lt;div face=&quot;Georgia,&amp;quot;&quot;&gt;
  1141. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  1142. &lt;/span&gt;&lt;/div&gt;
  1143. &lt;div face=&quot;Georgia,&amp;quot;&quot;&gt;
  1144. &lt;span style=&quot;font-size: 85%;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Update 5/5/2010: For an even more complete picture of these brokerage firms, I thought it might be helpful to add a chart comparing the commission structure, account fees, and minimum amounts.  Vanguard &lt;a href=&quot;http://investingguy.blogspot.com/2010/05/vanguard-joins-price-war-free-vg-etf.html&quot;&gt;joined &lt;/a&gt;in on the price war and is now offerings its ETFs commission fee, while also slashing its commission structure, making the brokerage service a viable alternative to Schwab and Fidelity for those who trade more frequently.  This clearly is in response to similar moves by &lt;a href=&quot;http://investingguy.blogspot.com/2009/12/schwab-now-offers-commission-free-etfs.html&quot;&gt;Schwab&lt;/a&gt; and &lt;a href=&quot;http://investingguy.blogspot.com/2010/02/fidelity-strikes-back-reduces.html&quot;&gt;Fidelity&lt;/a&gt; in the past several months.   &lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1145. &lt;br /&gt;
  1146. &lt;span style=&quot;font-size: 85%;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;In summary, it&#39;s free for Schwab customers to trade their 11 ETFs (3 bond ETFs were released August 2010), free for Fidelity customers to trade 25 iShares ETFs, and now free for Vanguard customers to trade their 43 ETFs.  Also note that I&#39;m purposefully excluding &lt;i&gt;non&lt;/i&gt;-transaction free mutual fund purchases as it simply makes no sense to pay a larger transaction fee for a mutual fund when you can most likely get a similar ETF for less.  For that matter, there are plenty of transaction free mutual funds to choose from as seen from the above links.  (In case you were curious, though, Schwab charges $49.95, Fidelity charges $75, and Vanguard will set you back $35, $20, or $8 depending on your total assets.) While I&#39;m including phone and broker assisted trade fees, you should only be trading online as doing otherwise will cost you unnecessarily (although not with VBS anymore).  Vanguard Brokerage Services (VBS) is actually a different account than the Vanguard mutual fund account; that is, you don&#39;t need it if you&#39;re simply going to invest directly in Vanguard&#39;s own mutual funds.  In any event, here&#39;s a  basic chart comparing the commissions as well as account fees and minimums.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  1147. &lt;div&gt;
  1148. &lt;span style=&quot;font-weight: bold;&quot;&gt;&lt;br /&gt;
  1149. &lt;/span&gt;&lt;/div&gt;
  1150. &lt;div style=&quot;text-align: center;&quot;&gt;
  1151. &lt;span style=&quot;font-weight: bold;&quot;&gt;Commission Schedule, Account Fees, and Minimums&lt;/span&gt;&lt;br /&gt;
  1152. &lt;span style=&quot;font-weight: bold;&quot;&gt;Vanguard vs. Schwab vs. Fidelity &lt;/span&gt;&lt;/div&gt;
  1153. &lt;table border=&quot;1&quot; cellpadding=&quot;2&quot; cellspacing=&quot;0&quot; style=&quot;height: 509px; margin-left: auto; margin-right: auto; text-align: left; width: 425px;&quot;&gt;&lt;tbody&gt;
  1154. &lt;tr&gt;&lt;th style=&quot;text-align: center;&quot;&gt;&lt;br /&gt;&lt;/th&gt; &lt;th style=&quot;text-align: center;&quot;&gt;VBS^&lt;/th&gt;&lt;th style=&quot;text-align: center;&quot;&gt;&lt;span id=&quot;SPELLING_ERROR_28&quot;&gt;Schwab&lt;br /&gt;
  1155. &lt;/span&gt;&lt;/th&gt;&lt;th style=&quot;text-align: center;&quot;&gt;&lt;span id=&quot;SPELLING_ERROR_28&quot;&gt;Fidelity&lt;/span&gt;&lt;/th&gt;  &lt;/tr&gt;
  1156. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Online Trades&lt;br /&gt;
  1157. (&amp;lt;$50,000 in assets)&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;$7 for first 25; subsequent trades $20&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt; &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$8.95&lt;/td&gt; &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$7.95&lt;/td&gt;&lt;/tr&gt;
  1158. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Online Trades&lt;br /&gt;
  1159. ($50k - $500k in assets)&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;$7&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$8.95&lt;/td&gt;  &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$7.95&lt;/td&gt;&lt;/tr&gt;
  1160. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Online Trades&lt;br /&gt;
  1161. ($500k- $1M in asssets)&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;$2&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$8.95&lt;/td&gt;  &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$7.95&lt;/td&gt;&lt;/tr&gt;
  1162. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Online Trades&lt;br /&gt;
  1163. (&amp;gt;$1M in assets)&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;First 25 trades free&lt;span class=&quot;note&quot;&gt;;&lt;/span&gt;&lt;br /&gt;
  1164. subsequent trades $2 &lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$8.95&lt;/td&gt;  &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$7.95&lt;/td&gt;&lt;/tr&gt;
  1165. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Automated Phone&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;Same as online price structure&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$13.95&lt;/td&gt;  &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$12.95&lt;/td&gt;&lt;/tr&gt;
  1166. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Broker Assisted&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;Same as online  price structure&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$33.95&lt;/td&gt;  &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$32.95&lt;/td&gt;&lt;/tr&gt;
  1167. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Account service fee&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$20 per account if &amp;lt;$50k; No charge if &amp;gt;$50k&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;No charge*&lt;/td&gt;  &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;No charge#&lt;/td&gt;&lt;/tr&gt;
  1168. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;Account minimum&lt;span style=&quot;font-size: x-small;&quot;&gt;%&lt;/span&gt;&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;$3000&lt;/td&gt;  &lt;td style=&quot;text-align: center;&quot;&gt;$1000&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;$2500&lt;/td&gt;  &lt;/tr&gt;
  1169. &lt;tr&gt; &lt;td style=&quot;text-align: center;&quot;&gt;Options Trades Online (&amp;lt;$1 M)&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;$30 + $1.50  per options contract&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt; &lt;td style=&quot;text-align: center;&quot;&gt;$8.95, plus $0.75 per contract &lt;/td&gt;  &lt;td style=&quot;text-align: center;&quot;&gt;$7.95, plus $0.75 per contract &lt;/td&gt;&lt;/tr&gt;
  1170. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Options Trades Online (&amp;gt;$1 M)&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-bodyDiv&quot; type=&quot;Div&quot;&gt;&lt;span class=&quot;comp-RoundBox&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn0&quot; type=&quot;RoundBox&quot;&gt;&lt;span class=&quot;comp-Div&quot; cmp=&quot;true&quot; id=&quot;comp-_idDyn1&quot; type=&quot;Div&quot;&gt;$8 + $1.50 per  contract&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$8.95, plus $0.75 per contract&lt;/td&gt;  &lt;td style=&quot;text-align: center;&quot;&gt;$7.95, plus $0.75 per contract&lt;/td&gt;&lt;/tr&gt;
  1171. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Treasuries&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$10 or free &lt;span style=&quot;font-size: xx-small;&quot;&gt;&amp;amp;&lt;/span&gt; &lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;No charge&lt;/td&gt;  &lt;td style=&quot;text-align: center;&quot;&gt;No charge&lt;/td&gt;&lt;/tr&gt;
  1172. &lt;tr&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;Other Secondary Trades (CDs, Muni Bonds, MBS, etc.)&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$50 (Mortgage-backed, munis) or free (US gov&#39;t agency, corporate, CDs)&lt;/td&gt; &lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$1/bond&lt;/td&gt;&lt;td style=&quot;text-align: center; vertical-align: top;&quot;&gt;$1/bond&lt;/td&gt;&lt;/tr&gt;
  1173. &lt;/tbody&gt;&lt;/table&gt;
  1174. &lt;div style=&quot;text-align: center;&quot;&gt;
  1175. &lt;span style=&quot;font-size: x-small;&quot;&gt;Information is accurate as of 5/05/2010&lt;/span&gt;&lt;/div&gt;
  1176. &lt;div&gt;
  1177. ^ Again, this is specific to Vanguard Brokerage Service.  If you simply want to purchase Vanguard mutual funds, this is a different account and has no annual service fee assuming you sign up for e-delivery of documents.&lt;br /&gt;
  1178. * One exception - Schwab&#39;s Personal Defined Benefit Plan account has opening costs&lt;/div&gt;
  1179. &lt;div&gt;
  1180. # Fidelity charges a $12 annual mutual fund low balance fee for each noncore Fidelity fund under $2,000&lt;/div&gt;
  1181. &lt;div&gt;
  1182. % For most accounts.  There may be a few exceptions.&lt;/div&gt;
  1183. &lt;div&gt;
  1184. &amp;amp; $10 if total assets are &amp;lt;$100,000.  $0 if total assets are &amp;gt;$100,000.&lt;br /&gt;
  1185. &lt;br /&gt;
  1186. For more information and up-to-date commission schedules, see &lt;a href=&quot;https://personal.vanguard.com/us/whatweoffer/etfsandstocks/feescommissions&quot;&gt;Vanguard&#39;s&lt;/a&gt;, &lt;a href=&quot;http://www.schwab.com/public/schwab/home/fees_commissions/commission_schedule?cmsid=P-1357448&amp;amp;lvl1=home&amp;amp;lvl2=fees_commissions&quot;&gt;Schwab&#39;s&lt;/a&gt;, and &lt;a href=&quot;http://personaldcc.fidelity.com/accounts/pdf/FBS-BKCOMMSCHED-0105.pdf?refpr=cmr15&quot;&gt;Fidelity&#39;s&lt;/a&gt; (pdf) own pages.&lt;/div&gt;
  1187. &lt;/div&gt;
  1188. &lt;/div&gt;
  1189. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6172513801136855280'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/6172513801136855280'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/01/comparison-of-vanguard-charles-schwab.html' title='Comparison of Vanguard, Schwab, and Fidelity Fund and ETF Offerings'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://2.bp.blogspot.com/_a9FNMR19fkk/S10iShZ0KdI/AAAAAAAAAMQ/s1-UhL1zLPI/s72-c/image.PNG" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-7550485472979232511</id><published>2010-01-20T10:06:00.006-06:00</published><updated>2010-01-24T23:27:04.169-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="bond investing"/><title type='text'>What&#39;s Next in the Bond Market?</title><content type='html'>&lt;a onblur=&quot;try {parent.deselectBloggerImageGracefully();} catch(e) {}&quot; href=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S10rmeD8MMI/AAAAAAAAAMY/TobrPIwfnWI/s1600-h/sshot-1.png&quot;&gt;&lt;img style=&quot;margin: 0pt 0pt 10px 10px; float: right; cursor: pointer; width: 169px; height: 102px;&quot; src=&quot;http://1.bp.blogspot.com/_a9FNMR19fkk/S10rmeD8MMI/AAAAAAAAAMY/TobrPIwfnWI/s200/sshot-1.png&quot; alt=&quot;&quot; id=&quot;BLOGGER_PHOTO_ID_5430544665583300802&quot; border=&quot;0&quot; /&gt;&lt;/a&gt;Bonds had a huge upswing in 2009 and many are wondering with interest rates so low (and nowhere to go but up) as well as a mounting deficit that may lead to increasing inflation, what&#39;s the best course of action.  In short, just as there is no way to time the stock market, there is likewise no way to time the bond market, and in investing, &lt;span style=&quot;font-style: italic;&quot;&gt;there is no free lunch&lt;/span&gt;.  You can&#39;t reduce risk and increase reward; nothing is guaranteed.  Having said that, due to the various unusual economic conditions at play, I do think investors can make certain movements in their bond investments that have a higher likelihood of paying off.&lt;br /&gt;&lt;br /&gt;John Waggoner argues in a recent &lt;span style=&quot;font-style: italic;&quot;&gt;USA Today&lt;/span&gt; article, &lt;span class=&quot;inside-head&quot;&gt;&quot;&lt;a href=&quot;http://www.usatoday.com/money/perfi/columnist/waggon/2010-01-07-bond-fund-outlook_N.htm&quot;&gt;Those who dived into bond funds due for splash of reality,&lt;/a&gt;&quot;&lt;/span&gt; that &quot;there is no good reason to own a bond fund.&quot;  Investors put a record $349 billion into bond funds through November.   Because of rising interest rates and inflation in the next few years (which seem to be reasonable bets), bonds have nowhere to go but down as their &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_0&quot;&gt;NAV&lt;/span&gt; takes a beating in these conditions.  Waggoner recommends looking at laddering bank &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_1&quot;&gt;CDs&lt;/span&gt; and purchasing TIPS.&lt;br /&gt;&lt;br /&gt;I hardly think it&#39;s the case that there&#39;s &lt;span style=&quot;font-style: italic;&quot;&gt;no&lt;/span&gt; good reason to own a bond fund as it offers diversification and there&#39;s no way to time the market.  Having said that, because of the conditions mentioned above, I do think is a viable action to shorten the average duration of your bond funds (i.e. go to short-term) and perhaps be lighter on moderate and long-term treasuries and heavy on TIPS.  As interest rates rise, short-term bond funds&#39; &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_2&quot;&gt;NAV&lt;/span&gt; will be hit much less than those with longer durations.  Similarly, treasuries are more likely to take a beating than corporates, although some prefer to safety of treasuries as it&#39;s backed by the full faith of the US Government.&lt;br /&gt;&lt;br /&gt;In the end, I think it&#39;s reasonable that if you have 100% of your bond allocation in a total bond market index such as &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_3&quot;&gt;VBMFX&lt;/span&gt;, to put 50% of that into a different investment such as TIPS, a CD ladder, or a short-term bond fund.  What bond fund to choose?  Well, two popular choices these days are &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_4&quot;&gt;VFSTX&lt;/span&gt; (Short-Term Investment Grade) and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_5&quot;&gt;VBISX&lt;/span&gt; (Short-term index containing ~50% Treasuries and 25% government backed).&lt;br /&gt;&lt;br /&gt;In 2008, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_6&quot;&gt;VBISX&lt;/span&gt; was up 5.4% while &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_7&quot;&gt;VFSTX&lt;/span&gt; was down 4.7% (we&#39;re talking total return not just capital appreciation), while in 2009 &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_8&quot;&gt;VBSIX&lt;/span&gt; was up 4.3% and &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_9&quot;&gt;VFSTX&lt;/span&gt; was up a whopping 14.0%.  So, as you can see, the risk/reward profile of &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_10&quot;&gt;VFSTX&lt;/span&gt; (and it&#39;s volatility) is certainly greater than that of the more diversified &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_11&quot;&gt;VBISX&lt;/span&gt;. The reason corporates performed poorly from late 2008 into early 2009 was that the safety of US Treasuries was alluring to investors as the economy was still on shaky ground, so corporates went way down in price while treasuries went up.  At current levels, however, situations have reversed and many think US Treasuries are overpriced while corporates have already seen the worst and are undervalued in regards to their &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_12&quot;&gt;NAV&lt;/span&gt;.  (Considering yield to get a better grasp of total return is also significant.  Don&#39;t chase yields, however.  Just for the record, &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_13&quot;&gt;VBISX&lt;/span&gt; is current yielding 2.85%, while &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_14&quot;&gt;VFSTX&lt;/span&gt; has a yield of 3.95%.  A bond fund with a higher yield nearly always contains higher risk.)&lt;br /&gt;&lt;br /&gt;It comes down to what risk/reward profile you want to take in your short-term bond position.  Corporates are riskier by the mere fact that the chance of a corporation defaulting is higher than that of treasuries.  Thus, if you want to take the risk of a higher return with also the caveat of knowing there&#39;s a possibility of a negative return (and are willing to hold through that instead of taking part in panicked selling), then short-term investment grade seems like the wise choice.  Jason &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_15&quot;&gt;Zweig&lt;/span&gt; thinks in the current conditions corporates are the way to go.  Note that while I&#39;m saying &quot;higher risk,&quot; this risk of &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_16&quot;&gt;VFSTX&lt;/span&gt; pales in comparison to high yield or junk bonds as well as all stock funds.  So, we&#39;re not talking about a super risky asset class.  The worst case scenario is pretty much 2008 when it was down almost 10%.  If you want to play it more safe and the purpose of your bond holdings is for steady income, choose &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_17&quot;&gt;VBISX&lt;/span&gt; (or even &lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_18&quot;&gt;VSGBX&lt;/span&gt;, Short-Term Federal) as it&#39;s more stable and has higher quality bonds.&lt;br /&gt;&lt;br /&gt;Here is a nice &lt;a href=&quot;http://www.schwab.com/public/schwab/research_strategies/market_insight/investing_strategies/bonds/bonds_end_a_record_year_whats_next.html&quot;&gt;summary &lt;/a&gt;from Schwab about what to expect out of Treasuries and TIPS, government mortgage backed securities (MBS), corporates, municipal bonds, high-yield/junk, and foreign bonds in 2010.  To recap that article, they assert that: 1.) TIPS offer a better value than Treasuries, 2.) MBSs have limited upside, 3.) Investment-grade corporate bonds provide a benefit in the realm of higher yields, 4.) Muni bonds remain attractive for high-income investors, 5.) Junk bonds have run their course and have limited upside, and 6.) The weak dollar is driving the returns for international bonds.</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/7550485472979232511'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/7550485472979232511'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/01/whats-next-in-bond-market.html' title='What&#39;s Next in the Bond Market?'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://1.bp.blogspot.com/_a9FNMR19fkk/S10rmeD8MMI/AAAAAAAAAMY/TobrPIwfnWI/s72-c/sshot-1.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-8327052142690736360</id><published>2010-01-20T09:59:00.005-06:00</published><updated>2010-01-24T23:35:54.115-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="articles"/><title type='text'>Article: The 6 Biggest Investing Mistakes</title><content type='html'>&lt;a onblur=&quot;try {parent.deselectBloggerImageGracefully();} catch(e) {}&quot; href=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/S10thytBt3I/AAAAAAAAAMo/LRopOlsihUo/s1600-h/sshot-1.png&quot;&gt;&lt;img style=&quot;margin: 0pt 0pt 10px 10px; float: right; cursor: pointer; width: 112px; height: 104px;&quot; src=&quot;http://4.bp.blogspot.com/_a9FNMR19fkk/S10thytBt3I/AAAAAAAAAMo/LRopOlsihUo/s200/sshot-1.png&quot; alt=&quot;&quot; id=&quot;BLOGGER_PHOTO_ID_5430546784248248178&quot; border=&quot;0&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-family: georgia;font-family:inherit;font-size:100%;&quot;  &gt;A nice &lt;a href=&quot;http://money.cnn.com/galleries/2010/moneymag/1001/gallery.investing_mistakes.moneymag/index.html&quot;&gt;article &lt;/a&gt;in &lt;i&gt;Money &lt;/i&gt;magazine&lt;/span&gt;&lt;span style=&quot;font-family: georgia;font-size:100%;&quot; &gt; for the typical investor recently came out by Burton &lt;/span&gt;&lt;span style=&quot;font-family: georgia;font-size:100%;&quot; class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_0&quot; &gt;Malkiel&lt;/span&gt;&lt;span style=&quot;font-family: georgia;font-size:100%;&quot; &gt; and Charles Ellis to remind us of common pitfalls that individuals tend to make.  &lt;/span&gt;&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_1&quot;  style=&quot;font-size:100%;&quot;&gt;&lt;span style=&quot;font-family: georgia;&quot;&gt;M&lt;/span&gt;alkiel&lt;/span&gt;&lt;span style=&quot;font-size:100%;&quot;&gt; is an economics professor at Princeton and author of &lt;/span&gt;&lt;i&gt;&lt;span style=&quot;font-size:100%;&quot;&gt;A Random Walk D&lt;/span&gt;own Wall Street&lt;/i&gt;, while Ellis authored&lt;i&gt; Winning the Loser&#39;s Game&lt;/i&gt;.&lt;br /&gt;&lt;br /&gt;Here are the six mistakes they outline that I think are significant enough to repeat:&lt;br /&gt;&lt;br /&gt;1.) &lt;b&gt;Overconfidence &lt;/b&gt;- People tend to think they can out-smart other investors and beat the market.  But invariably the results show otherwise, and the psychological factors at play often actually prove counterproductive as we tend to buy high and sell low when things aren&#39;t going so well.  Staying the course with a solid portfolio and asset allocation, and perhaps even signing an agreement with yourself that you won&#39;t deviate from your plan, is the best option.&lt;br /&gt;&lt;br /&gt;2.) &lt;b&gt;Following the Herd&lt;/b&gt; - Investors tend to think of what&#39;s &quot;hot&quot; now and pour their assets into it after much of the population has done so.  This feeds a bubble, such as &lt;span style=&quot;&quot; class=&quot;blsp-spelling-corrected&quot; id=&quot;SPELLING_ERROR_2&quot;&gt;Internet&lt;/span&gt; stocks in the late 1990s and real estate in 2008, and rarely turns out well.  Furthermore, just doing what millions of others have already done again ensures that you&#39;ll buy after the movement.  The upward movement is over and you lost your chance.  As Warren Buffet has said, &quot;Be fearful when others are greedy, and be greedy when others are fearful.&quot;  That is, it is to your benefit to go against the herd.  When everybody was dumping stocks in late 2008, that was the time to pick them up, and you would have been rewarded handsomely for doing so.&lt;br /&gt;&lt;br /&gt;3.) &lt;b&gt;Timing the Market &lt;/b&gt;- I dedicated a fairly &lt;a href=&quot;http://investingguy.blogspot.com/2009/06/investing-stategy-market-timing-using.html&quot;&gt;long post&lt;/a&gt; to exploring a common market timing strategy and timing based on &quot;when you think is best&quot; is the worst and most common form of market timing out there.  Behavioral psychology dictates that we are poor &lt;span class=&quot;blsp-spelling-corrected&quot; id=&quot;SPELLING_ERROR_3&quot;&gt;barometers&lt;/span&gt; of where the market is going to go next, and we tend to buy when we&#39;ve been burned (i.e. there&#39;s been a correction) and hold on when we&#39;re doing very well (i.e. there&#39;s been a huge upswing).  In actuality, you want to do the opposite.  However, even if you realize this fact, it&#39;s impossible to know when the market is going to change courses, so your best bet is to hold constantly.  Furthermore, constant buying and selling increases commission costs, taxes, fees, and perhaps some opportunity time will be lost.  And you&#39;re spending way too much time on your investments for your own good.  There&#39;s a reason that 95% of actively managed index funds can&#39;t beat the market averages over a 10-year span, and these are professionals.  Do you really think you can do any better?&lt;br /&gt;&lt;br /&gt;4.) &lt;b&gt;Assuming more control than you have &lt;/b&gt;- There is not stock market pattern to ascertain and the daily, weekly, and even monthly results of Mr. Market (as Benjamin Graham called it) is completely random.&lt;br /&gt;&lt;br /&gt;5.) &lt;b&gt;Paying too much in fees &lt;/b&gt;- This is one factor that I constantly emphasize and it is the key to maximizing returns in a way that you can control.  Funds with low fees (typically 0.30% or lower) outperform those with high ones almost overwhelmingly.  It&#39;s hard to make up for that with great picks - and as they say, those funds that have done so in the past are unlikely to do so in the future (past performance doesn&#39;t guarantee future results).  Another advantage of low-cost index funds is that they&#39;re typically more tax-efficient since they&#39;re low turnover compared to actively managed ones.  So, not only is your return most likely higher, but Uncle Sam takes a smaller portion of your profit.&lt;br /&gt;&lt;br /&gt;6.) &lt;b&gt;Trusting stockbrokers &lt;/b&gt;- Your broker isn&#39;t your friend.  He&#39;s there to make money for himself. (&lt;span class=&quot;blsp-spelling-error&quot; id=&quot;SPELLING_ERROR_4&quot;&gt;Sidenote&lt;/span&gt;: If you have a financial adviser, make sure he is hourly/fee-based and not on commission.  Those on commission tend to try to sell you investments that you don&#39;t want.)  And your friends, while they mean well, don&#39;t know what&#39;s going to happen next in the market (nobody does).  Going from stock tip to tip simply increases your commissions, adds to your tax bill, and typically ends up performing worse than if you had chosen a reasonable low-cost diversified index fund approach and stayed the course.&lt;br /&gt;&lt;br /&gt;These pieces of advice from two very knowledgeable individuals cannot be repeated too many times.  Most individuals think that they can easily out-smart the market, time it well, get in when a sector is hot, and trust others for stock picks.  None of these typically end well.</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8327052142690736360'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/8327052142690736360'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2010/01/article-6-biggest-investing-mistakes.html' title='Article: The 6 Biggest Investing Mistakes'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="http://4.bp.blogspot.com/_a9FNMR19fkk/S10thytBt3I/AAAAAAAAAMo/LRopOlsihUo/s72-c/sshot-1.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-1458095903302674663.post-3228467591431739683</id><published>2009-12-22T17:27:00.003-06:00</published><updated>2010-02-25T13:36:18.434-06:00</updated><category scheme="http://www.blogger.com/atom/ns#" term="investing strategies"/><title type='text'>Dollar cost averaging vs. lump sum investing</title><content type='html'>After devising an asset allocation plan, many investors wonder if it is wiser to immediately pour all of their assets (which are most likely sitting in cash) into the funds within their plan (lump sum) or to split the investments across several months (dollar cost averaging).&lt;b&gt;&amp;nbsp; &lt;/b&gt;So, what method makes more sense for the majority of investors?&lt;br /&gt;
  1190. &lt;br /&gt;
  1191. &lt;b&gt;Simply put, if your goal is to maximize returns over the long-term, lump sum (LS) is the better course of action than dollar cost averaging (DCA) as it &lt;i&gt;always &lt;/i&gt;has a higher &lt;i&gt;expected &lt;/i&gt;return.&lt;/b&gt;&lt;br /&gt;
  1192. &lt;br /&gt;
  1193. University of Chicago professor, Geoge Constantinides, supports this theory using complex mathematical and economics models in his paper, &quot;A Note on the Suboptimality of Dollar-Cost Averaging as an Investment Policy,&quot; which can be found &lt;a href=&quot;http://faculty.chicagobooth.edu/george.constantinides/documents/JFQA_1979.pdf&quot;&gt;here&lt;/a&gt;.&amp;nbsp; To break it down to the most simplistic premise, this conclusion makes perfect sense as it should seem obvious to any rationale observer that LS provides a higher likelihood of greater return than DCA because the market &lt;i&gt;typically &lt;/i&gt;increases over time.&amp;nbsp; That is, since one &lt;i&gt;expects &lt;/i&gt;the market to have a positive return, getting in it sooner rather than later is always the best bet.&amp;nbsp; Stated in another way, since the expected return of stocks and bonds is higher than that of money market funds and savings account, moving your assets immediately from asset classes with lower expected returns to higher ones will &lt;i&gt;always &lt;/i&gt;increase your expected returns.&amp;nbsp; However, there is certainly no guarantee that this will play out in all situations and your actual returns may vary.&amp;nbsp; Thus, there is an important psychology at play when investors choose between using LS or DCA.&amp;nbsp; Another study concluded that LS beats DCA about 65% of the time - this number is not surprising since the stock market increases about 65% of the time.&lt;br /&gt;
  1194. &lt;br /&gt;
  1195. Another argument for LS investing is that if you have set up an asset allocation plan of stocks/bonds that matches your risk profile and time horizon, why not follow it immediately?&amp;nbsp; If you decide that a 70% stock/30% bond mix is best for you and currently have $50,000 sitting in a savings/checking account, many would argue that you should implement the plan right away as it matches your directives.&amp;nbsp; Why would you want a 20% stock/10% bond/70% cash allocation for a quarter of the year (assuming you&#39;re DCA four times over the course of a year)?&amp;nbsp; &lt;b&gt;If 70/30 makes sense for you in the long-term, then it makes sense now.&lt;/b&gt;&amp;nbsp; If you can&#39;t stomach the up&#39;s and down&#39;s that portfolio can sustain, then perhaps it&#39;s not appropriate for you.&amp;nbsp; These points certainly have merit and from a mathematical and statistic standpoint, LS is the way to go.&lt;br /&gt;
  1196. &lt;br /&gt;
  1197. Having provided ample documentation that LS investing provides the higher expected performance over the long-term, I still don&#39;t want to make a blanket statement that everybody should utilize the LS strategy; and that is because of psychological factors and risk.&amp;nbsp; If you are a new investor that seeks to enter the stock market, but are a bit timid about the prospects of such a volatile asset class, then I think DCA &lt;i&gt;is &lt;/i&gt;a good method.&amp;nbsp; Additionally, spreading out your investments over time certainly &lt;i&gt;does &lt;/i&gt;reduce risk (although with a lower expected return).&amp;nbsp; There is no way to time the market and it is expected to increase in value over time, but spreading your investments into an index fund over the course of a year or so might make sense if it allows you to &quot;stay the course&quot; (i.e. not deviate from your designed portfolio asset allocation) over your lifetime.&amp;nbsp; As Warren Buffett has said, &quot;My best holding period is forever.&quot;&amp;nbsp; DCA provides a method in which to spread out risk in case we have another year like 2008 even if it does have expected lower returns.&amp;nbsp; This rationale is certainly &lt;i&gt;not &lt;/i&gt;without merit (sorry for the double negative) and for certain investors, DCA makes sense. &lt;br /&gt;
  1198. &lt;br /&gt;
  1199. Note that even if you invest in a lump sum right now, you will still most likely be dollar cost averaging over the course of your lifetime as new funds become available.&amp;nbsp; I like to rebalance by buying additional shares of my existing funds, rather then selling my underperforming asset classes (unless, of course, I am tax loss harvesting, in which case selling negatively performing asset classes is the way to go).&lt;br /&gt;
  1200. &lt;br /&gt;
  1201. To wrap up, lump sum investing provides the higher expected return over dollar cost averaging.&amp;nbsp; From a mathematical and probability standpoint, it is definitely the better method.&amp;nbsp; However, there are psychological factors at play in many circumstances and certain individuals may find comfort in spreading out their risk over the course of a year or so, and thus will find the dollar cost averaging method more suitable for their goals since it reduces their risk of picking the exact wrong time to jump in the market.&amp;nbsp; In the end, it won&#39;t make a huge difference over the course of a long-term investing lifetime.&amp;nbsp; Getting a suitable plan in place and implementing it is far more important than the rate at which you will be transferring your assets from cash to stocks and bonds.</content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/3228467591431739683'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/1458095903302674663/posts/default/3228467591431739683'/><link rel='alternate' type='text/html' href='http://investingguy.blogspot.com/2009/12/dollar-cost-averaging-vs-lump-sum.html' title='Dollar cost averaging vs. lump sum investing'/><author><name>Investing Guy</name><uri>http://www.blogger.com/profile/09964141534729027748</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='16' height='16' src='https://img1.blogblog.com/img/b16-rounded.gif'/></author></entry></feed>

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