[Slava]

Originally Posted by HockeyIlliterate

Perhaps, but if an individual is getting ready to make a significant decision with regard to their investments, the prudent person would likely conduct research and (if needed) procure the services of a tax professional as a one-off event prior to making the decision.

Simply paying, on an ongoing basis, for advice that isn't needed doesn't make a great deal of sense to me.



One element of being a successful investor is simply staying the course and being boring. If someone can do that successfully, I don't see the point of paying someone else to tell them to ignore the noise, not do anything, and just stand there.




I like being average. In fact, being average in finance is, as someone else said*, pretty darn good.

* See here: http://www.forbes.com/sites/realspin...-stock-market/



I guess, but even if you did buy at the top, the index fund threw off dividends (which the "passive" investor would, presumably, reinvest back into the fund), so I'd be surprised if it took a "full six years" to have a portfolio balance equal to what it was in mid-2008 (or whatever cherry-picked year you'd like to use).



I'm not sure where you get that idea from. Many "passive" investors buy (and buy and buy and buy and buy and buy) and hold...

And many "passive" investors rebalance in order to maintain their desired asset allocation as well (either by buying what is underweight or selling what is overweight and buying what is underweight).



I'd like to see the comparison on that one.

All too often the mutual fund(s) used in the comparison aren't the same fund during the entire time span being reviewed, so that what you really are comparing is an "index" of mutual funds v. a single index*, or dividends/cap appreciation/gains are included in one comparison but not in the other, or the fund(s) being compared are really comparable to the index they are being compared against, or the comparison changes the composition of compared-index over time, or, well, you get the idea.

* Which is particularly grating, because, well, who really cares how great some mutual fund was from, say, 2004 to 2008? What you care about is which mutual fund will be the best one next year. And good luck figuring that one out, year after year after year after year after year from now until you stop investing.

I'm trying to avoid a mammoth post here. Its interesting that you say passive investors are seemingly completely passive though, when there are a number of decisions to be made there. Asset allocation being the first. You can't buy and buy and buy as you suggest without first deciding what to buy and how much. Do you want that currency exposure hedged? The in the next sentence you talk about re-balancing. On what basis exactly? So you cut the flowers to water the weeds or how do you make the decision that one sector/holding is overvalued and the others are undervalued? Clearly there is an active strategy of some kind here.

I'm not even going to address the mutual fund index (which I don't even know what that is or how its formulated). I do think its interesting that you are willing to forgo knowing what to buy in order to just buy the index, but not willing to forgo that thought for something actively managed though. Its seems incongruent to me.