100% Equities Strategy

  

Oh, there are so many investing strategies, and this is one of 'em. All in. A hundo percent. Long equities. Long America. Long the world. The rationale behind the 100 percent equities strategy is that, simply put, over long periods of time, equities go up. A lot. So if you have plenty of time on your investing horizon, then be 100 percent long equities and enjoy great wealth in your '90s.

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Finance: How Do You Judge the Performanc...132 Views

00:00

finance a la shmoop. how do you judge the performance of an index fund? very

00:07

carefully. actually performance means something very different when it comes

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to an index fund versus an actively managed fund. in an index fund the

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manager doesn't really do anything per se other than rebalance the indices so [man sleeps at a desk]

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that they conform to whatever the product was that you bought in the first

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place. for example a technology index fund might claim that 12% of its

00:28

holdings will have wireless telecommunications related stocks as a

00:32

target, but never less than 10% and never more than 15% .and in most cases the

00:37

actual stocks that go in the fund are identified beforehand like before the [man smiles at camera]

00:40

funds actually really launched. and the relative weightings of those investments

00:44

is also predetermined .ie the fund might target having three percent of its total

00:50

as shares in Verizon. but if Verizon suddenly does extremely well and doubles

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in price in a short period of time well the index fund might have to sell

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shares of that stock so that it's weighted holding amount won't pierce the

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maximum weighting of 15%. but all this relates to the composition of the fund [pie chart]

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not necessarily the performance. since an index fund is a reflection of a given

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area like these examples they conform to a general theme, like the Vanguard total

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stock market index. the broadest based reflection of the overall market. like

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the S&P 500 plus Nasdaq plus the New York Stock Exchange indices or another

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one might be the Vanguard small cap Value Index, largely companies under a

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few billion bucks in market cap which trade at relatively low price to [value index listed]

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earnings ratios ie they are value stocks rather than say growth stocks. all right

01:42

next one might be the Vanguard emerging markets stock index. that one's all about

01:48

third world countries trying to become second worlders how's that Nigerian

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oil exchange looking? or what about investing in Vietnam these days? the

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Napalm is mostly washed away by now. and then move it on. yep there's the Vanguard [sink with the water on]

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intermediate term bond index, and yes there are bond index funds as well.

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intermediate just means that the bonds in this set of bonds mostly come due

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within about five years or so. the bottom line is that an index fund

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isn't really a managed fund. it's just a reflection of whatever group of stocks

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or bonds it is supposed to reflect. so if an index performs poorly, all of the [man holds stock]

02:25

fault lies in the one who chose that particular index fund, not the manager of

02:30

the fund because well there basically wasn't one, so if your fund as poorly and

02:34

you want to scream at the idiot moron financial manager who screwed up your

02:38

retirement by picking a bad investment vehicle ,well go find a mirror. [woman grimaces and cries]

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