Date: Thu, 3 Mar 2005 14:09:45 CST
From: "Elle" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Expense ratios
	iQBVAwUAQidvCvl/I4+O31e5AQFH8QIAwpGzrcBVYnKo/v6GpdDqRe333GqVMX+t
	0PZwGj54YJ+vfuBQ2GjavglxD+aq/GynzLh+q5yFlWacK0RwFk/kdg==
	=rB2b

"Tad Borek"  wrote
> Elle wrote:
> > Do you have a citation for this?
> >
> > I thought it was a roll of the dice as to whether low expense ratios
and
> > low portfolio turnover vs. others tend to beat their competition "by a
> > mile" over time. If it was as clear as you say, then it seems to me
index
> > funds would be a lot more popular. They're really not all that popular,
> > from my recollection of my reading.
>
> That's funny, based on your posts I had you pegged in the low-cost/index
> fund camp!

Yes, you are correct, for the greater part. As of I dunno five years ago
all of my IRA is in an S&P 500 index fund, for example.

But my reasons for the IRA S&P 500 positioning have been largely based on
(1) a guess that such funds will do better than their compatriots and (2)
principle. The principle being that I want to encourage fund companies to
lower costs, promote competition and the like.

All of this derives from some reading on the subject of index funds. I am
acquainted with the books you mentioned, which of course are much cited in
financial circles.

I agree Beliavsky's citation of the recent Malkiel paper gives support to
the theory that index funds are the better bet. But I'd say it's not quite
dispositive. That is, there are a few holes to be punched in what he says,
if one is an avid proponent of, say, market timing. There's also the
likelihood that Malkiel could be trying to toot his own 30-year-old horn.

Not that I credit market timing "principles" with much.