Quote of the day

“Buy and hold is eternal.” –John Bogle, December 19, 2008

Update on disgraced stock picker Bill Miller: Back at work like nothing ever happened

Bill-“Every decision to buy anything has been wrong”-Miller is a walking reminder of the central trouble with mutual funds. Even though his $1.3 billion Legg Mason Opportunity Trust has declined 65 percent this year, his people still love him. To prove it, they just gave him a new fund to help manage. His name recognition [...]

Audio: Is it different this time?

Wes Wellington of Dimensional Fund Advisors presents a pitch-perfect analysis of the curent economic climate, including reasons for optimism that avoid speculative forecasting. A treasure trove of relevant adviser comunications talking points. (Impressive Adobe podcast technology to boot.)

Vanguard is first mega fund company to turn the corner on redemptiuons

Vanguard’s lead in stopping the bleed of redemptions is no fluke. Ever since it was founded by index investing icon John Bogle, the fund company has attracted advisers and investors who seek the gains of the capital markets by pursuing disciplined portfolio strategies that focus on broad diversification with low-cost and transparent investment vehicles. Market [...]

Post-meltdown era right around the corner?

The growning gap between income and profit amoung S&P 500 companies suggests new efficeincies and investment bargains. S&P 500’s Worst Writedowns Signal Rally as Gap Widens Dec. 15 — Just when U.S. companies are about to report their biggest writedowns, the losses may be the strongest signal yet that it’s time to buy stocks. Companies [...]

401(k) Plans to be restructured?

Lots of people are spending lots of time talking and writing about how to make 401(k)s more reliable retirement vehicles. The first notion is to implement “automation” across the board. That is, to mandate auto-enrollment, auto-contribution increases with raises.and auto-IRA contributions for smaller companies. The IRA component would take new legislation while, as we’ve mentioned [...]

Hedge fund swindler routed out transparency first

In this latest installment of meltdown learning opportunities, Bernie Meldoff the hedge fund swindler crafts walls of secrecy within walls of complexity and covers them in a fog of phony expertise. If you want an investor to know why transparency is important, what better way than to revisit the brazen crimes of one of the [...]

Hedge fund manager arrested after confession: my fund just a “giant ponzi scheme”

Renowned trader and former chairman of the Nasdaq Stock Market Bernard Madoff has been arrested and will apparently plead guilty to fraud. (This is the Wall Street everyone has been talking about lately, up close and personal.) Madoff Confessed $50 Billion Fraud Before FBI Arrest Dec. 12 — Bernard Madoff confessed to employees this week [...]

Tricked by Mr. Market: Bill Miller, manager, Value Trust: “Every decision to buy anything has been wrong.”

These losses have wiped away Value Trust’s years of market-beating performance. The fund is now among the worst-performing in its class for the last one-, three-, five- and 10-year periods, according to Morningstar. Here is the type of learning opportunity that will become increasingly available as chronicles of the demise of stock pickers and market [...]

Costs of mutual funds on the rise

With assets hollowed out to 29%, the mutual fund industry is forecast to raise fees by 10%, a move evidently necessary to maintain capital flow in the face of far fewer dollars to manage. If active money managers cannot deliver alpha under the current cost framework, how will they reach it in a higher cost [...]