Are You A Schwab Client? Gosh BobC, am I sensing a little hostility here? You used to say (correctly) that TIAA Traditional (what you called the "
traditional bucket") provided "limited options to make changes". But now here you are saying that they
always "treat client dollars as TIAA-CREF dollars and put up all kinds of roadblocks to retain them."
That's a rather curious observation in a thread ostensibly addressing retail customers, and discussing
nonTIAA funds that one might invest in through them. If I invested in, say, TWEIX through a TIAA DIY brokerage account, how would they treat my client dollars as their own?
When I look at their retail after tax VA (Intelligent Life), I see a product that
Kitces praised as being clear and flexible when it came out a decade ago. As far as putting up roadblocks to getting dollars out is concerned, I see TIAA doing just the opposite. With most annuities, at death (if not annuitized), it's possible to keep the money there for
years. With this annuity, if it doesn't go to the spouse, the entire annuity must be cashed out immediately.
It is true that the annuity discourages people from leaving (while alive) by dropping the annuity fees to a mere 10 basis points after a decade. If that's the kind of roadblock you were talking about, give me more roadblocks :-)
Looking For a Good Mid-Cap Growth Fund
I'm looking specifically for growth because I believe this bull market has years left to run - perhaps to 2030. After nearly a decade, we're finally transitioning from an interest rate driven market to an earnings driven market, and growth stocks are likely to benefit the most. Earnings will come from the application of new technologies.
Okay. Ask yourself this question. What are the changes of an actively managed mid cap growth fund outperforming VIMSX over the next 13
years?
I don't mean to preach. When I buy an actively managed fund, I'm not trying to mimic/outperform the market. I want to buy it because I want to assume MANAGER RISK. In my retirement accounts, I buy index funds because I am assuming MARKET RISK.
The worst outcome is when you get both MANAGER RISK and MARKET RISK. So if you want to buy an actively managed mid growth fund, maybe you can consider something like VMRGX. Take any of the above suggestions that are "mid growth" and compare against VMRGX. Hopefully that is instructive.
Looking For a Good Mid-Cap Growth Fund VIEIX, VIMSX would be my recommendations, frankly. Not sure why you want "growth". FMIMX is another option.
I'm looking specifically for growth because I believe this bull market has
years left to run - perhaps to 2030. After nearly a decade, we're finally transitioning from an interest rate driven market to an earnings driven market, and growth stocks are likely to benefit the most. Earnings will come from the application of new technologies.
Are You A Schwab Client? We have used Schwab (almost) exclusively for our client accounts for 20+ years. No company is perfect, but the combination of technology, pricing, and service has been darned good over the years. My view is that Vanguard and Fidelity (to some extent) have been late to the party in terms of services they offer. Vanguard has a brokerage account capability, but it is light years behind TD, Schwab and a handful of others from a technology standpoint.
How to download price info for a list of symbols I would like to d/l price info (price, date/time, etc) for a group of about 10 specific stocks and mutual funds. I've used yahoo.com for several years, but they've changed formats several times w/o warning, forcing me to revise my processing. It's frustrating. I would like to find a good, solid, established, easy-to-use source.
Suggestions?
Are You A Schwab Client? Thanks for the praise, though rather overstated. Thanks also for the reminder that the biggest problem (at least for me) with the BofA cards has been their simultaneous paranoia on card use (e.g. refusing a $500 car repair charge 15 miles from home) and frequent issuing of new numbers (due to security breaches on their end).
To protect against problems abroad, I try to always carry cards from two different issuers. Capital One is an excellent card for that, with 1.5% and no foreign transaction fee.
Rather surprisingly, Discover Card is also becoming a reasonable alternative (1% and no foreign transaction fee), since it's been
working hard at expanding its
overseas presence in the last couple of
years.. The current Fidelity VISA card's also reasonable (2% rewards reduced by a 1% foreign transaction fee).
Are You A Schwab Client? As it turns out, what I keep with Merrill Edge is a fund that they won't sell me (they'll only hold it). A good place to drop a fund that I'm just going to let sit for years. Also, while brokerages make money lending securities that can be sold short, generally mutual funds cannot be shorted.
So Merrill, and its parent BofA are stuck servicing an account that they can't make a dime from, that costs them money to maintain, where I won't be trading (so they'll have to send me periodic inactivity notices costing them more money), and servicing a credit card where they're paying me over 2% on everything I charge on their cards (including Costco).
The only way I can see that I'm helping BofA is that they're able to count me as an account holder when they present to shareholders the number of accounts that are held with them. I think I can live with that.
I wouldn't dream of actually banking with them.
Are You A Schwab Client? I've been with Schwab since 1997 and love it. I had a brief dalliance with VG a few years ago with part of my portfolio, but did not care for them. Among other reasons, you can call Schwab 24/7, not so with VG.
Schwab people on the phone are probably the most polite people you will ever talk to. In the 20 years I've been with them, the only time I've been to one of their offices was last fall. I was encouraged by the local rep to come in so I did, but aside from a good conversation it was a waste of time. Everything I need to do is available on the website, or is a quick phone call away with a very nice person (who speaks English).
Their website and its portfolio tools are pretty good. They have a huge selection of NL funds (they don't have everything, nor does anyone else). ETFs are now $4.95 per trade (not really relevant to me, I'm not a trader).
Active Managers: All Bark, No Bite. A well managed index fund can do a little better than the index minus expenses.
It can make some money by lending its securities. (Some funds let the fund management keep some or all of this; in
Vanguard funds all of this revenue goes into the fund.)
Depending on the flexibility allowed to the fund, it can trade a little earlier or later than when the index changes, allowing it to take advantage of price movements. DFA advertises this "
patient trading" as a specific advantage of its funds.
Virtually all funds even index funds keep some cash around to manage cash flows. Most
years (when the market is rising) this "cash drag" pulls the performance of the fund down (toward the performance of the cash, which is now around 0%). But in
years when the index drops, this "drag" tends to pull the fund performance
up toward zero.
Active Managers: All Bark, No Bite. Over the last 15 years, how many *passively* managed domestic large cap funds beat their index? If they are truly tracking their index, don't they all fail each year by at least the amount of their expense ratio?
Active Managers: All Bark, No Bite. Hi Ted,
Thanks for the SPIVA reminder. It's a terrific service that deserves more investor attention.
These guys have been doing this mind numbing, numbers crunching job for a good many years now, I agree with your observation that the output is monotonous and easily predictable. A major fraction of Active fund managers have consistently and persistently failed to match their benchmark standards.
There are a few random exceptions for brief periods, but the record is substantial and overall it is very discouraging. It is depressing!
What is even more depressing is the fact that many investors still seek and fail to find the magic criteria that allow a forecast of who these few exceptions might be ahead of time. There's a good reason for that failure too. Those elusive magic criteria simply do not exist. What works now will likely change and fail in the future. The investment world is in constant change.
It took me a long time to learn that lesson. I recommend that MFO regulars consider just how challenging the Active fund management selection task really is. There are multiple thousands of candidate funds and only a handful will succeed for a short period. Given those dire odds, Index choices seem like an attractive alternate portfolio construction approach.
It's not that Active managers are not smart guys. They are very smart, totally committed, with large research staffs. That's just not enough to win. Their costs and competition against one another limits their potential outsized performance, and turns their considerable efforts into a Loser's game.
That's too, too bad, but that's the current ballgame. There will be a few brief exceptions. Good luck on identifying and capturing these exceptions in a timely and a profitable manner.
Best Wishes
