Step 1: Active Investors Step 2: Nobel Laureates Step 3: Stock Pickers .

8m ago
5.33 MB
45 Pages
Last View : 1m ago
Last Download : 3m ago
Upload by : Jewel Payne

Step 1: Active InvestorsStep 2: Nobel LaureatesStep 3: Stock PickersStep 4: Time PickersStep 5: Manager PickersStep 6: Style DriftersStep 7: Silent PartnersStep 8: RiskeseStep 9: HistoryStep 10: Risk CapacityStep 11: Risk ExposureStep 12: Invest and Relax1IFA 12-Step Brochure

TABLE OF CONTENTSAbout IFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3IFA Fiduciary Wealth Services . . . . . . . . . . . . . . . . . . . . . . . . . .4The Value of a Passive Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . 5IFA’s Investment Philosophy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Step 1: Active Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7Step 2: Nobel Laureates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Step 3: Stock Pickers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Step 4: Time Pickers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Step 5: Manager Pickers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Step 6: Style Drifters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Step 7: Silent Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Step 8: Riskese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Step 9: History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Step 10: Risk Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Step 11: Risk Exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Step 12: Invest and Relax . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18IFA Index Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19IFA Index Portfolio 100, 75, 50, 25 Fact Sheets . . . . . . . . . . . . . . .20-27Disclosure for Charts & References . . . . . . . . . . . . . . . . . . . . . . . . .iDisclosure for the Hypothetical Back-Tested Performance ofModel IFA Index Portfolios and Indexes . . . . . . . . . . . . . . . . . . . . ii-ivIndex Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v-xivIndex Fund Advisors, Inc.V. 6-20222

ABOUT IFAIndex Fund Advisors, Inc. (IFA) is a fee-only wealthmanagement firm that provides risk-appropriate,returns-optimized, globally-diversified and taxmanaged investment strategies with a fiduciarystandard of care.Founded in 1999, IFA is a Registered Investment Adviserthat provides fiduciary wealth management services toindividuals, trusts, corporations, non-profits, and publicand private institutions. Based in Irvine, California, IFAmanages individual and institutional accounts, includingIRA, 401(k), 403(b), profit sharing, pensions, endowmentsThrough its IFA Taxes division, IFA provides individuals,and all other investment accounts. IFA also facilitatesbusinesses, trusts and non-profit entities across theIRA rollovers from 401(k)s and 403(b)s. As of DecemberUnited States a wide range of tax planning, tax preparation31, 2021 more than 2,300 clients nationally entrustedand accounting services.*approximately 5.00 billion of their assets to IFA’s care.For updates and further information, visit value of IFA extends beyond superior investment*IFA Taxes does not provide auditing or attestation services and therefore isnot a licensed CPA firm. IRS Circular 230 Disclosure: To ensure compliancewith requirements imposed by the IRS, we inform you that any U.S. Federaltax advice contained in this communication is not intended or written to beused, and cannot be used, for the purpose of (i) avoiding penalties underthe Internal Revenue Code or (ii) promoting, marketing or recommending toanother party any transaction or matter herein.advice. As a holistic financial partner, IFA helps guideinvestors through life and retirement stages. Our WealthAdvisors take a personalized approach to matchingpeople with portfolios while providing a full-range ofwealth services for a better overall client experience.22 Years, 10 Months (3/1/1999 - 12/31/2021) 5.00B 5.0B 4.5B 3.84BAUM 4.0B 3.5B 2.66B 2.74B 3.0B 2.0B 1.5B 1.0B 0 4.21B 3.08B 2.23B 2.5B 500M 4.08B 3.60B 260M 355M 6M 35M 55M 80M 175M 703M 1.04B 812M 1.03B 1.33B 1.44B 1.73B1999* 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Year Ending*IFA was Founded in 1999Past performance does not guarantee future results. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security,product or service. There are no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal.3IFA 12-Step Brochure

IFA FIDUCIARY WEALTH SERVICESIFA combines personalized advice with customized wealth management services to assist our clients in achieving theirlong-term financial goals. These services are listed below and include:FIDUCIARY WEALTH SERVICESWEALTH MANAGEMENTTAX RETURNS & ACCOUNTINGthat focus specifically on matching peopletax planning, accounting, bookkeepingwith portfolios of passively managed orand tax return services to individuals andindex mutual funds, based on the client’sbusiness entities across the United States.IFA provides investment advisory servicesIFA Taxes provides collaborative tax advice,risk capacity.SOCIAL SECURITYOPTIMIZATION SERVICESFINANCIAL PLANNINGIFA offers robust financial planning utilizingIFA Wealth Advisors and expert resourceseMoney to provide a complimentary, wealthprovide a powerful solution to determinemanagement system that will allow ourhow to maximize your social securityclients to track their assets, liabilities, income,benefits and further outline your completeand spending across all their accounts aswell as store all their important picture.RETIREMENT PLANNINGCHARITABLE GIVING SERVICESWith the aid of the IFA Retirement PlanIFA Wealth Advisors assist clients in settingAnalyzer, IFA Wealth Advisors are able toup donor advised funds, which are charitablehelp clients make more informed decisionsgiving accounts that provide an efficient wayin each stage of make grants to charities.COLLEGE PLANNINGPLEDGED ASSET LINEIFA’s College Savings Analyzer helps IFAIFA Wealth Advisors can assist clients inWealth Advisors align a client’s collegeaccessing various lending solutions thatfunding objectives with an appropriateare secured by the client’s portfolio. Thesecollege savings and investment include pledged lines of credit,non-purposeRETIREMENT PLAN nloansthrough Charles Schwab and Fidelity.andDefined Benefit retirement plan solutionsESTATE PLAN ANALYSISconstructed to support the specific needsThrough our relationship with the Vanillaand objectives of owners/plan sponsors- while helping employees define a clearestate planning platform, IFA providespath for a successful financial analysis services for all clients.REFERRAL SERVICESINSURANCESERVICESIndex Fund Advisors, Inc.TRUSTEESERVICESESTATE PLANNINGATTORNEYSBANKING& CHECKING4MORTGAGESCREDIT CARD

THE VALUE OF A PASSIVE ADVISORAs low-cost index fund investing continues to gain inA knowledgeable passive advisor can provide severalpopularity, numerous researchers have turned theirservices, including the critical discipline needed toattention to quantifying the value a passive advisor cancombatbring to an index portfolio. One such study conductedis combined with funds from DFA, a science-basedby Vanguard, the leading provider of index fundspassive fund company, investors avail themselves of thequantified the “advisor alpha.” This advisor alpha is theopportunity to keep more of what the market delivers.emotional,reflexreactions.Whenadvicesum of the value added by advisors who adhere to theprinciples of controlling costs, maintaining discipline andIFA analyzed the performance of 533 clients who hadtax awareness, relative to other advisors or unadvisedbeen working with our advisors for at least 11 yearsinvestors. The greatest contribution a passive advisorfrom 2008 through 2018. This period included thebrings is behavioral coaching, according to the study —decline of equities during the global financial crisisor as William Bernstein so succinctly puts it: “Wall Streetof 2008 and early 2009, as well as the subsequentis littered with the bones of those who knew just whatrecovery period. Even though many of these clientsto do, but could not bring themselves to do it.”Thehad inception dates prior to Jan. 1, 2008, we chosebreakdown of the advisor alpha set forth in Vanguard’sthis time period so that each investor would have2014 & 2018 studies are shown below.experienced the same market conditions. For each ofthe 100 benchmark IFA Index Portfolios, our researchBreakdown of Vanguard Advisor's Alphateam maintains monthly historical returns that can20142018Implementation with Cost-Effective Funds0.45%0.34%be used to benchmark clients’ time-weighted returns.Disciplined Rebalancing0.35%0.26%IFA determined the annualized returns of the clients’Behavioral Coaching1.50%1.50%index portfolios and compared that to the originalAsset Location0-0.75%0-0.75%recommended IFA Index Portfolio. The clients wereAnnual Withdrawal Strategy0-0.70%0-1.10%divided into three groups based on how closely theyDetermining an Appropriate Asset AllocationNot Quantified Not Quantifiedfollowed IFA’s advice. The results of the study areTotal Return Investing vs. Reaching for Yield Not Quantified Not Quantifiedillustrated in the chart below.Source: Francis M. Kinniry Jr., Colleen M. Jaconetti, Michael A. DiJoseph, YanZilbering, and Donald G. Bennyhoff, 2019. Putting a value on your value: QuantifyingVanguard Advisor’s Alpha. Valley Forge, Pa.: The Vanguard Group “Putting a Valueon Your Value: Quantifying Vanguard Advisor’s Alpha”, Vanguard Research, 2014.IFA Client Success at Capturing Benchmark Index Returns11 Years (1/1/2008 to 12/31/2018)Client’s Average Percentage of Benchmark Annualized Returns100.32%Clients that Did FollowIFA's AdviceAverage of 209 clients that keptwithin 9 risk levels of IFA’s originalrecommendation82.35%Clients thatRecalibratedAverage of 163 clients that decreasedtheir risk level by 10 to 25 compared toIFA’s original recommendation77.93%Clients that Did Not FollowIFA's AdviceAverage of 161 clients that either decreasedtheir risk level by more than 25 or increasedby more than 10 compared to IFA's originalrecommendationSource: Internal analysis of 533 portfolios of IFA clients that were clients as of 1/1/2008 and stayed through 12/31/2018. Returns calculated as annualized returns. Thebenchmark is IFA’s recommended IFA Index Portfolio at the beginning of the client relationship. All client index portfolios were evaluated for that 11-year period, whichwe consider to be a difficult period because it includes a steep drop followed by a full recovery. This is not to be construed as an offer, solicitation, recommendation, orendorsement of any particular security, product or service. There are no guarantees investment strategies will be successful. Investing involves risks, including possibleloss of principal. IFA Index Portfolios are recommended based on an investor’s risk capacity, which considers their time horizon, attitude towards risk, net worth,income, and investment knowledge. Take the IFA Risk Capacity Survey to determine which index portfolio matches your risk capacity.5IFA 12-Step Brochure

IFA’S INVESTMENT PHILOSOPHYIFA’s evidence-based, passive investment strategy isIFA utilizes the following five investment tenets deriveddesigned to capture the returns of the global markets,from academic research, much of which has beenwith the goal of keeping fees low. IFA’s investmentrecognized with the awarding of the Nobel Prize inphilosophy and subsequent portfolio implementationEconomic ingexposures to the asset class and sub-asset class indexes1) FINANCIAL MARKETS ARE EFFICIENTthat have a long history of rewarding investors for riskstaken. Specifically, IFA’s philosophy is guided by long-As free market prices fully incorporate availableterm historical data, avoiding attempts to outsmartinformation,the market through timing, style selection, or payingunexpected new information; therefore the currentthe high prices associated with active management.price is the best estimate of a fair price.pricechangeconsequentlyreflectsThese destructive behaviors simply erode the returnsthe market provides patient investors who focus2) RISK AND RETURN ARE INSEPARABLEinstead on appropriate asset allocation and portfolioAlthough there is no such thing as return without risk,implementation. IFA avoids the futile, speculative, andnot all risks are equally rewarded. Long-term historicalunnecessary cost-generating activities of stock, time,risk and return data informs IFA’s investment selectionmanager, and style picking. Contrarily, IFA employsprocess, and IFA’s Index Portfolios seek to capturea disciplined, quantitative approach that emphasizesthe historical risk factors that have appropriatelybroad diversification and consistent exposure to thecompensated investors for risks taken, includingstructural trends of global publicly-traded, size, value, and profitability for equity and termand default for fixed income.IFA’s investment philosophy is rooted in Nobel Prizewinning research. Notably, IFA’s strategy is guided byThe Efficient Market Hypothesis and Modern Portfolio3) DIVERSIFICATION IS ESSENTIALTheory. IFA bases its portfolio construction on theDiversification within and among asset classes letshighly respected research indexes designed by Nobelinvestors effectively capture the returns offered by theLaureate Eugene Fama and his associate Kennethfinancial markets, in accordance with their risk capacity.French, incorporating more than 94 years of IFA Index4) STRUCTURE EXPLAINS PERFORMANCEPortfolio risk and return data and third generationindex fund designs.The expected return of a diversified portfolio isdetermined by its exposure to the compensated riskIFA matches people with portfolios by carefully qualifyingfactors, therefore the high costs and risks of activeand quantifying five dimensions of an investor’smanagement are unnecessary and potentially harmfulrisk capacity and matching it to five dimensions ofto an investor’s long-term outlook.a portfolio’s risk exposure. IFA obtains academicallyidentified capital market rates of returns for our clients5) ADVISOR ADVANTAGEfrom approximately 13,000 public companies in theThere are distinct benefits to enlisting the servicesU.S. and approximately 45 other countries globally. Weof a passively-oriented advisor, including disciplineddesign highly tax-managed, low cost trading strategies,rebalancing, tax loss harvesting, asset location, andmaintaining proper risk exposures through rebalancing.Index Fund Advisors, Inc.glide path.6

STEP 1: ACTIVE INVESTORSRecognize an Active InvestorActive investing is a strategy that investors use whenThe chart below tells the story. It reflects the findings oftrying to beat a market or appropriate benchmark.a 2021 Dalbar study, revealing that the average equityActive investors rely on speculation about short-termfund investor significantly underperformed the S&P 500future market movements. They commonly engage inIndex over a 30-year period. The study shows that duringpicking stocks, times, managers, or investment styles.the 30 years from 1992 through 2021, the average equityfund investor earned returns of only 7.13% per year,These self-defeating practices of active investorswhile the S&P 500 returned 10.65%. This means that theunnecessarily increase their risk, expenses, taxes, andaverage equity fund investor grew a 100,000 investmentanxiety. Most importantly, the sport of speculationto 789,465, while the growth of 100,000 invested in thedeprives investors of the returns they could earn ifS&P 500 would have been 2,082,296.they would simply buy and hold a passively managedblend of globally diversified index funds matched totheir risk capacity.The Dalbar Study: 30 Years of Average Equity Fund Investor vs. Indexes30 Years (1/1/1992 - 12/31/2021)AverageAnnualized Return12%Growth of ge Equity Fund InvestorS&P 500 2.5M 2.0M 2,082,296 1.5M 1.0M 0.5M 0 201,104Inflation 789,465Average Equity Fund InvestorS&P 500Average Equity Investor as determined by Dalbar Study source: Dalbar QAIB 2022 study, Morningstar, Inc. Past performance does notguarantee future results. TheS&P 500 Index is an unmanaged float-adjusted market capitalization-weighted index that is generallyconsidered representative of the U.S. stock market. Other indexesmay be more appropriate to benchmark your investments against. It is notpossible to invest directly in an index. Data is provided for illustrative purposes only, it doesnot represent actual performance of any clientportfolio or account and it should not be interpreted as an indication of such performance.7IFA 12-Step Brochure

STEP 2: NOBEL LAUREATESDefer to the Higher Knowledge of AcademiaActive investors disregard some of history’s most importantand researchers regarding risk, probability theory, statistics,lessons. Most do not read the peer-reviewed academicthe random nature of prices and asset-pricing theory havestudies and Nobel Prize-winning economic researchbeen painstakingly studied, analyzed and summarized byavailable. They instead rely on media messages to guidethe legends of financial science, some of whom are depictedtheir investing decisions, largely unaware of the fact thatbelow. Collectively, these great minds have delivered to usmedia outlets profit handsomely from the advertisinga method of investing that is founded on the principlesdollars of online brokers, trading services and active traderof market efficiency, the returns of capital markets, andpublications that encourage us to trade. Nearly 300 yearsthe “Invisible Hand” which guides market forces, prices,of statistical, scientific and economic research explain whyallocation of resources, the cost of capital, and the returnsinvestors who buy, hold and rebalance an investment inof capitalism. Investing according to the findings of theseglobal capitalism reap rewards in proportion to the riskslegends enables you to be a better investor.they take. Three centuries of study from notable scientistsBlaise PascalAdam SmithLouis BachelierHarry MarkowitzWilliam SharpeMerton MillerFriedrich von HayekPaul SamuelsonEugene FamaKenneth FrenchDavid BoothRex SinquefieldJohn BogleBurton MalkielMichael JensenIndex Fund Advisors, Inc.8

STEP 3: STOCK PICKERSAccept That Stock Pickers Do Not Beat the MarketThe financial press largely focuses on the daily movementsluck, not skill. Professors Laurent Barras, Olivier Scaillet andof stocks and markets, showering rewards on those who areRussell Wermers conducted a study2 of 2,076 mutual fundlucky enough to be in the right place at the right time. Butmanagers over a 32-year period. They found that from 1975it is virtually impossible for a stock picking fund manager– 2006, 99.40% of these managers displayed no evidence ofor individual stock picking investor to consistently predictstock picking skill. In another study, the S&P Indices Versusand invest in the stocks that will be future winners, basedActive (SPIVA) Scorecard revealed that a large percentageon the tenets of market efficiency. Stock pickers tend to beof U.S. and International active funds underperformedoverly confident in their “skill” to generate alpha (defined astheir respective benchmarks for a 20-year period endingany return above the benchmark return), but studies haveDecember 31, 2021. Highlights of the SPIVA study are shownshown that their “winning performance” is usually due toin the chart below.Active Funds Versus Their Benchmarks: U.S. Equity and International Equity Funds20 Years (1/1/2002 - 12/31/2021) (Risk-Adjusted Returns)U.S. Equity FundsAll Domes c FundsAll Large-Cap FundsPercentage of Funds That OutperformedTheir Respec ve Benchmarks95.39%Percentage of Funds That UnderperformedTheir Respec ve Benchmarks95.65%All Mid-Cap FundsAll Small-Cap FundsAll Mul -Cap FundsReal Estate Funds90.10%93.61%93.84%78.95%Interna onal FundsGlobal FundsInterna onal FundsInt’l Small-Cap FundsEmerging Market Funds87.70%92.83%87.88%94.74%Source: SPIVA U.S. Scorecard, S&P Dow Jones Indices LLC, eVestment Alliance. Performance is calculated using returns divided by standard deviation, ameasureof risk. Past performance is no guarantee of future results. Indexes are not available for direct investment and performance does not reflect expenses of anactualportfolio. Chart is provided for illustrative purposes. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particularsecurity,product, service, or considered to be tax advice. There are no guarantees investment strategies will be successful. Past performance is no guarantee of futureresults.Investing involves risks, including possible loss of principal.9IFA 12-Step Brochure

STEP 4: TIME PICKERSAccept That Time Pickers Cannot Time the MarketTime pickers (market timers) mistakenly believe they cancorrect 74% of the time in order to outperform a passivepredict the future movement of the stock market, movingportfolio at a comparable level of risk.3 In 1992, SEI Corporationinto the market before it goes up and getting out beforeupdated Sharpe’s study to include the average 9.4% stockit goes down.return from the period 1901 – 1990. This study determinedSuch decisions usually do not fare well,because they are based on the fallacy that the direction ofthat gurus must be right at least 69% of the time.4future price movements can be predicted. At any point intime, any investor can only know the current and past priceCXO Advisory Group tracked public forecasts of self-of any given security. Nonetheless, market timing can beproclaimed market timing “gurus.” The chart below showsalluring, likely because investors don’t understand that thethe percentage grades of 28 market timers who had mademarket continuously sets prices in response to news, whichmore than 100 forescasts from 2000 through 2012. Theis shows that not one of the “gurus” was able to meetSharpe’s requirement of 74% accuracy, or SEI’s minimumIn a study titled, “Likely Gains from Market Timing,” Nobel69%, thereby failing to delivery accuracy sufficient to beat aLaureate William Sharpe concluded a market timer must besimple index portfolio.5Sources: *William F. Sharpe “Likely Gains From Market Timing,” Financial Analysts Journal, March/April 1975**CXO Advisory, Limited to 28 Market Gurus with more than 100 Forecasts for the period ending Dec. 31, 2012, Copyright: CXO AdvisoryGroup LLC: Reproduced with permission;This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantee investmentstrategies will be successful. Investing involves risks, including possible loss of principal.Index Fund Advisors, Inc.10

STEP 5: MANAGER PICKERSRealize That Winning Managers Were Just LuckyActive investors unnecessarily increase their risk, expenses,Selection and Termination of Investment Managementtaxes, and anxiety. Numerous studies have shown activelyFirms by Plan Sponsors,” reveals the negative impact ofmanaged investments generally carry more risk andmanager picking. The results of hiring 8,755 managerslower returns than globally diversified, risk-calibratedshown below, illustrate that during the 10-year periodindex portfolios. Despite this fact, investors frequently fallfrom 1994 through 2003, managers that were hired hadprey to the allure of past winners, hiring the hottest newoutperformed their benchmarks by 2.91% over the threefund managers only to fire them later because their pastyears before being hired. However, over the following threeperformance doesn’t persist in subsequent periods.years the managers underperformed their benchmarksby 0.47% per year. Plan sponsors often proceeded to fireA 10-year study conducted by Amit Goyal of Emorytheir underperforming managers in favor of other recentUniversity and Sunil Wahal of Arizona State Universitytop performers, only to repeat the cycle again. The studyfound that manager hiring and firing decisions madeconcluded, “In light of such large transaction costs andby consultants, board members and trustees were apositive opportunity costs, our results suggest that thecomplete waste of time and money. The study, “Thetermination and selection of investment managers is anexercise that is costly to plan beneficiaries.”6The bar chart reflects the results of the study minus an estimated annual 0.5% management fee and an annual 0.5% cost of transition in the after hiringmanager returns. Source: Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” The Journal ofFinance, Volume LXIII, No. 4, published August 2008.Past performance does not guarantee future results. All data, including performance data, is provided for illustrative purposes only, it does not representactual performance of any client portfolio or account and it should not be interpreted as an indication of such performance.11IFA 12-Step Brochure

STEP 6: STYLE DRIFTERSComprehend Active Management Style DriftStyle drift occurs when an active manager drifts from athe 40-year period from 1982 to 2021, Magellan morphedspecific style, asset class or index that is described as theand evolved several times. For example, in mid-1995, thestated investment purpose of a fund. Style drift is a seriousfund looked like a large value fund, despite the fact that itsproblem for investors who believe they are invested in abenchmark was the large blend S&P 500.portfolio that matches their risk capacity. Since managers ofactive funds seek to outperform the benchmark, they oftenIn contrast to the style drifting tendencies of activelywander outside the boundaries of the benchmark, alteringmanaged funds like Fidelity’s Magellan, passively managedthe fund’s exposure to risk and its volatility of returns.funds (specifically those provided by DFA) adhere to strictrules of construction and are held constant regardlessOne particularly egregious example of style drift is theof market conditions. The figure on the bottom showsFidelity Magellan Fund as shown in the top figure below. Inthe relative style purity of the DFA U.S. Large CompanyPortfolio, which also has the S&P 500 as its benchmark.40 Years (1/1/1982 - 12/31/2021)Russell 1000 GrowthRussell 1000 ValueRussell 2000 GrowthRussell 2000 ValueFund Allocation 16‘18‘20‘2240 Years (1/1/1982 - 12/31/2021)Russell 1000 GrowthRussell 1000 ValueRussell 2000 GrowthRussell 2000 ValueFund Allocation 16‘18‘20‘22Sources: Morningstar,Inc. IFA. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service.There are no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal.Index Fund Advisors, Inc.12

STEP 7: SILENT PARTNERSRecognize The Partners in Your ReturnsThere are many silent partners that quietly but determinablyPart of the disparity in ending wealth is due to activeeat away at an active investor’s returns pie. A partial listmanagers charging higher fees than passive managersof silent partners that erode investors’ returns includesas compensation for their perceived “skill.” In both U.S.state and federal taxes, sales commissions, mutual fundand non-U.S. strategies, the average actively managedexpense ratios, fund turnover, and transaction is more expensive than the average passive fund.A John Bogle study concluded that over a 25-year period,The bar chart reveals the disparity in average expense 10,000 invested in the average managed equity fundratios between all mutual funds and IFA Index Portfoliogrew to a pre-tax value of 108,300, and an after-tax60. As of December 2021, a similar portfolio of all mutualvalue of 71,700. In contrast, 10,000 invested in the S&Pfunds would have been more than three times as costly500 grew to a pre-tax value of 181,800 and an after-taxas IFA Index Portfolio 60.value of 159,000.7Turnover is also a silent devourer of wealth. Activemutual funds are known to have higher turnover ratesAs of 12/31/2021than passive funds, creating tax liabilities that erodereturns. Even for non-taxable investors, high turnovercan be expensive. An article in the Financial AnalystsJournal stated that the average annual cost of trading0.90%incurred by equity mutual funds was 1.44%, which evenexceeds the average expense ratio of 1.19%.8Although most index funds are tax efficient by nature,some indexes can be further tax-managed to save aninvestor more in taxes. Tax-managed index funds0.27%are efficient at offsetting realized gains with realizedlosses, deferring the realization of net capital gains andminimizing the receipt of dividend income. The ben

Source: Internal analysis of 533 portfolios of IFA clients that were clients as of 1/1/2008 and stayed through 12/31/2018. Returns calculated as annualized returns. The benchmark is IFA's recommended IFA Index Portfolio at the beginning of the client relationship. All client index portfolios were evaluated for that 11-year period, which

Related Documents:

SPARC T3-4 ActiveAug 2012 SPARC T4-1 Mar 2016 Active SPARC T4-1B Sep 2014 Active SPARC T4-2 Dec 2014 Active SPARC T4-4 Dec 2014 Active SPARC T5-1 Aug 2016 Active SPARC T5-2 Aug 2017 Active SPARC T5-4 Aug 2017 Active SPARC T5-8 Aug 2017 Active SPARC T7-1 Aug 2020 Active SPARC

Shake the bag so that everything mixes together (at least 1 min.) Store in a dark, dry place for 5 days Primary Growing Process Steps one Step two Step three Step four Step five Final step 11 12 Step two Step three Step five Step four Step one Step three Step 7, 8, & 9 Step four Step ten Step 3 &am

with money taken from new investors. As long as a steady flow of new investors keeps coming in, there will be money to pay off the old investors. This early return on investment is misleading, however, because when the new investors stop coming in, the scheme collapses, investors lose their money

Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 2 Step 2 Request For Quotation (RFQ) If you're a hardball negotiator at heart, this next step should bring you some real enjoyment. On the other hand, if you are not a negotiator by trade, don't worry; this step can still be simple and painless. Now that you have a baseline of what

Save the Dates for Welcome Programs CHECKLIST Step 1: Step 2: Step 3: Step 4: Step 5: Step 6: Step 7: Step 8: Step 9: Step 10: Step 11: Step 12: Step 13: . School of Social Work 218 Bellerive Hall 314-516-7665 socialwk/

DNS is a requirement for Active Directory. Active Directory clients such as users computers) use DNS to find each other and locate services advertised in Active Directory by the Active Directory domain controllers. You must decide whether DNS will be integrated with Active Directory or not. It is easier to get Active Directory up and

An Active Directory forest is a collection of one or more Active Directory domains that share a common Active Directory schema . Most Active Directory environments exist with one Active Directory domain in its own Active Directory forest .

Step 1: Registration Step 2: Personal Information Step 3: Select a Job Step 4: Fill Application Step 5: Review Application Step 6: Submit Application Step 7: Check Application Status Step 8: Set up Job Alerts STEP-BY- STEP GUIDE TO APPLYING AT UNFPA