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managed vs index vs mattress

igno
edited June 2012 in Fund Discussions
old debate i know, but after decades of experience in both managed and indexes i see no advantage to managed, my balances ride the market just like an index - minus the fees, so they are actually down. in fact at this point i see no reason to do either..why not just use a mm and watch it grow slow? unless you do active buy low/sell high on your funds..which negates the whole concept..or just trade on your own..the whole thing is a bust (if you are passive about it..but what are you paying the mangers for then?) based on my own personal empirical evidence.

Comments

  • MikeMMikeM
    Your typical balanced fund is up ~13% over the last 3 years and ~3% over the last 5. The last 5 years includes digging out of a hole from the greatest recession in our history. That sounds better then MM returns to me.

    I guess I'm getting old, but I don't even see index versus managed funds as a debate anymore. There are arguments on both sides. I've used both but mostly use managed funds with managers who can be flexible in their allocations. Funds like ARIVX, YAFFX, MACSX, FPACX to name a few. Maybe I'm fooling myself, but I'm more able to hold on to these managed funds and use index exposure to increase or lessen my ballast (a skeeter term).
  • dporwan
    I have just started looking at balanced funds also. They seem to have done just as well over the last several years as the more agressive funds and of course lost a lot less in 2008. Granted they won't do as well as the other funds during a great year but over time seem to do better. Are YAFFX and ARIVX really balanced funds? They seem to just hold stocks and cash.
  • perpetual_Bull
    "Are YAFFX and ARIVX really balanced funds? They seem to just hold stocks and cash."

    Opportunistic asset allocation funds? I mostly use balanced funds( E.G... OAKBX, FPACX, PRWCX ) for my core holdings and funds like ARTKX, ARTQX, FLPSX, ARIVX, MAPIX, PQIDX, etc for my satellite funds. I've been satisfied with my returns
  • MikeMMikeM
    Reply to @dporwan: No, ARVIX and YAFFX are not balanced funds. But the managers have no problem going to cash when they believe stocks are over valued or economic conditions look ominous. Their primary objective is to preserve capital. Many investors don't like their managers going to cash. They believe their funds should always be fully invested... I don't. I'm not good at timing market conditions, so if I can find managers that have show that ability I'm more apt to hold on in rough times.

    I'm not keen on balanced funds that just use stocks and bonds as their investment vehicles. FPACX is a balanced fund that uses more then stocks and bonds. It will use cash, convertibles, options and even short. Again, I like FPACX for the same reasons I like ARIVX and YAFFX. Preserving capital is foremost on their investing agenda. I'll let these guys time what to allocate to because I can't.

    A newer fund I started investing in a few months ago is PGDIX. This is a well diversified allocation fund with the primary goal of achieving dividend income. I sold off some of my PRPFX to buy it and plan to increase my percentage. It doesn't have a long track record, but 3 year volatility is low (measured by standard deviation) and return has been very good. Here is some info on it if you are interested.
    http://www.principalfunds.com/investor/promo/gdif/
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