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Company research
Below are papers and/or articles that were published and written by the principals of Portfolio Solutions:
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Updated August 1, 2008
Each year we analyzed four primary drivers of market returns: risk, inflation, earnings growth, and cash payments from interest and dividends. These factors are part of every valuation model. From the data, we have developed or best estimate for major market returns over the next 30 years.
ETFs expenses have been increasing over the years as this once a no-frills low-cost 'market index' product has grown into a full fledged actively managed products based on 'strategy indexes'. The ABCs of ETF – Alpha, Beta and Cost examines the correlation between the complexity of strategy and rising index fund costs.
Comparing exchange-traded funds to traditional open-end mutual fund can be complex, especially when it comes to costs. To ETF or Not to ETF is a guide to understanding the pros and cons of investing in one or the other, or both.
Index investing is booming, and it is revolutionizing the way people manage their portfolios. Investors have become overwhelmed and confused with all the different index funds available. This paper examines the burgeoning index fund marketplace, and introduces a new categorization system that will help investors understand how various indexes are constructed and maintained, and if the new methodologies are right for them.
A shorter explanation of Index Strategy Boxes. The index classification methodology maps the universe of index strategy by categorizing ETFs based on the way an underlying index selects securities and weights securities.
BUY THE NUMBERS research reports offer periodic highlights and insight into different areas of investment analysis and portfolio management. The purpose of our research is to educate and inform investors rather than to offer specific advice. Three reports are available annually in the fouth quarter.
> Economic Analysis PDF
> Asset Class Valuations PDF
> Asset Class Correlations PDF
The presidential election cycle asserts that major market changes can be predicted based on the U.S. presidential election cycle. We looked at the returns of the S&P 500 index from 1948 to the present to show how the cycle works. We also compare the returns of the Clinton and Bush administrations to show whether the cycle has been accurate over the last six years.
1/1/1999
How to use total market index funds to create tax losses in a personal account while avoiding a wash sale.
7/7/2000
How much should you pay for advice? Many advisors tout the virtues of low mutual fund fees and commissions, but that discussion rarely extends to their own fee. The average advisor charges 1% of assets under management, and that is a bad deal for investors.
10/12/2000
How much should you invest in the stock market? This article explains the asset allocation process step by step. It is a must read for all serious investors.
12/15/2000
History shows that most investors simply cannot handle the risk of an all-stock portfolio, all of the time. Bonds provide stability and safety of income.
11/19/2001
Predicting the market is never easy and never accurate. There are too many variables and too much uncertainty. Nevertheless, we must try to calculate expected returns so that we have a guide to use when planning a portfolio.
3/25/2002
Business is tough for the active mutual fund companies, especially since index funds are catching on with the public. Who can blame the trustees of active fund companies for trying to spice up the performance of their funds by using an assortment of reporting techniques?
9/1/2000
There is a growing disparity between asset allocations in individual 401(k) accounts and acceptable risk. This could lead to a disaster for employees and employers.
8/7/2001
Dimensional Fund Advisors (DFA) funds should be available to all investors, not just the clients of investment advisors.
