Advice After Stock Market Drop: Take Some Deep Breaths, and Don’t Do a Thing – The New York Times 08-21-15

Salient to Investors:

Stocks are most useful for long-term goals so it does not make sense to change your investment strategy based on a blip (sic) of market activity. There is absolutely nothing abnormal going on in the market. Research shows that long-term portfolio performance suffers badly by missing just a few days of the market’s biggest gains.

The fundamentals of capitalism have not changed, not should your confidence in very long-term ownership of equities. Few investments deliver the kinds of returns that stocks can without their own accompanying anxiety. It would take decades of systemic economic erosion to prove that stocks are not the most accessible route to earn the returns you will need to retire.

Read the full article at http://www.nytimes.com/2015/08/22/your-money/stocks-and-bonds/advice-after-stock-market-drop-take-some-deep-breaths-and-dont-do-a-thing.html

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The Dumb Money Is Getting Smarter Every Day – Bloomberg 09-17-14

Salient to Investors:

  • Amateur investors are giving up on trying to beat the market, while even the most sophisticated investors are rejecting strategies that require advanced math and managers with million-dollar salaries. ICI reports the average expense ratio on an equity mutual fund is down 25% in 10 years.
  • Boston Consulting estimates the market share of index funds and ETFs has doubled since 2003.
  • Target-date funds are taking over retirement plans, and are the favorite of young workers.
  • Grant Easterbrook at Corporate Insight said that the new online advisors eliminate a million features that only 5% of the user base actually wants.

Read the full article at http://www.bloomberg.com/news/2014-09-17/the-dumb-money-is-getting-smarter-every-day-.html

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Morningstar shocker: Active funds lose heat – MarketWatch 08-14-14

Salient to Investors:

John Rekenthaler at Morningstar said:

  • Over the trailing 12 months, 68% of net sales to mutual funds ended up in passive investing vehicles versus 32% active.
  • Of $134 billion going into active funds, $30 billion is being placed in target-date funds.
  • Low-cost, passive funds keep more of the investor’s money in their pocket.

Read the full article at http://www.marketwatch.com/story/morningstar-shocker-active-funds-lose-heat-2014-08-14

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