I am also a financial advisor and I have traded dirivatives for over 13 years now. I love having the lowest fees within reason. However, I would have to agree with M.Beiter when it comes to long term investing Actively managed is the best way to go. Even though you pay on average .50% more than an index fund, if you find the good actively managed fund will beat the index by 1% after the fee. Thus, you are up in reality over 1% on average in any given year (based on history which doesn't necassarily represent future results.) This is due to index funds having no down side protection...That is where the good active funds thrive the down markets. when the index funds will be down whatever the index is plus the management fee, a good active fund will beat that same index by 1% or better, many I have seen have only lost half of the index (see GAMCO small cap value). However, I do think no loads are great options as well to lower upfront expenses (see Yacktman, Fairholme, Amana trust, those are my favorites)
Advisorof AZ10:08AM May 26, 2010
PIMCO is a great, but let's not leave out Harbor Bonds. It's mainly subadvised by PIMCO and there are no loads for individual investors. As far as the argument of index vs active management, that's all individual perference. The question is whether you can live with the returns without regret at the end of the day or holding period in which you've had the funds. Indexing is a great way to "go for the ride", cut your costs, and reduce your tax exposure. Active management is great to potentially beat the index, or lose to it ;). People can argue which method is better until the cows come home. No matter what method you choose it all comes down to finding something with low cost, quality management, and proper asset allocation. Review and rebalance at least annually and pray the overall market keeps chugging along.
Tonyof CA12:03PM May 25, 2010
I advocate having the bulk of your portfolio in index funds (I use Vanguard), but to add some spice and return I added on smaller stakes in high quality actively managed funds with reasonable fees: Fairholme, T. Rowe Price, Primecap, and Dodge & Cox. Seems to work for me over the year.
Mark Royerof CA5:00PM May 24, 2010
I'm a financial advisor and index funds are not the place to be for the long-term. I've done several 10 year and 20 year hypothetical portfolio's using some of these funds in my clients accounts and my own and everytime I outperform the index funds and the reason is I picked the best funds with great managers and as the saying goes you get what you pay for. I do belive fee's and expenses should be a deciding factor in choosing great funds but I've done it on a consistncy basis for over 10 years. I've read it and studied it all and everyone has a different view. Stick with the pimco total return and Loomis I use them both and I've had the opportunity to meet Bill Gross and I place great confidence in him in running money! M.Beiterfinancial advisor,CA
michael beiterof CA1:40AM May 24, 2010
I have had both Managed Funds with high expense ratios and Index Funds with low expense ratios. I had to finally pull out of the managed funds two years ago when the funds were sinking quickly. I plan to re-enter the market this summer but it will only be in index funds. Managed funds are entirely too expensive for their rate of return.
Betty Wilsonof NC8:57AM May 20, 2010
Funds like PIMCO Total Return and Loomis Sayles Bond Fund deserve mention - these are funds that seek to gain price appreciation in addition to income and can offer returns similar to stock fund returns usually with lower risk.
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donald of IN 3:02PM May 28, 2010
Advisor of AZ 10:08AM May 26, 2010
Tony of CA 12:03PM May 25, 2010
Mark Royer of CA 5:00PM May 24, 2010
michael beiter of CA 1:40AM May 24, 2010
Betty Wilson of NC 8:57AM May 20, 2010
wogga of MA 12:30AM May 20, 2010