HdOut11Cont-MrktEfficiency

HdOut11Cont-MrktEfficiency - ,. / / . a ,: t'71 -t'...

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Unformatted text preview: ,. / / . a ,: t'71 -t' l\a.rr...tt r-FF L- | \ t< /.fr .':i:L _ 'B--he'-- ,.ru I C I r'r1cj 'T: z* r t-r -L / | lt<'.-1.7 f\ efr''' (l - rR' ?(tt,.u\x" [ .,.ritN \\ \r\ '.t ,,. r5t \ L\ LE'\ \ f1. t t, ,-f E n.FE-.,r,1a,€ I (q.K,W Ur,r-5u.,fr.-,t - O f< .-.1 u,_,1s lT*-''tr ( r't: i,1 €-*ca+, u \ t't -:>/-)z-+i . ( ,t i nv'r.-.,12';- (f,,-f i7, { e,,, fr."-.lr-Z Tti t-t,,-te .'3 filpi i^t-vr krl Frsh e x 7,r,-/-<*{) (i,7 fh e- )a.-, 12 1., "F LAt /1)) $ \l ttlng Go ;rte llenchmarlc tnrlcr: For'[ans oI activr]ly managerl funds, the results alen't enc0rir'- cleiir, investors shorrldn't hlinrlll comparc Lheir funrls to thc S&l' 500r I:lut thilt isn't thr'0nlv l(,s- son. l,ooking to index'l I would lrl inclincd to skip S&P 500-index funds, wtth tht:ir focrrs on large stocks, anri instead brrv Wilslrire 5000 "total ma|ket" index frrnrls. because these fLtnrls pve You ct- posulc to tlre enti|0 ll.S stocl( Falllndl Oradw thc porconlnge ol slock htndg trefl tlnI tholr 00tsP"0ry'$ b0n0hm0rl( lndox ovsr tho past llvn yoanr [$rds.6ap orowtlr Il 4z.ax steno t4z,a Valuo [H46,'t Alld.osn Gmwth I 4,0 Blond ro 14.7 voluo R 6.1 $rnoll.e*p 0rowth U 27,tj stonu f 39.0 Voluo f, 54.2 Sourc,!: Slnndi(l & Poo/3 li0()0 \',,irs ul) lf . l''; , ltr:hind tlrc 2{).ll',1 ilv0llg(' lol Il.S. sIo(:l( lun(ls. It Ihltl hothcls \'ou, l,'on cortlrl cornpenSiLte [r1',sticl(ing it littlc extt'it rr.ronev irr rt srnull-stocl< irrdrr lrrnrl 'lhlt tvill g'ivc filtt tL pottfolto tltat Itrol<s ltl<t' the l\.picul ac1ivcLl, rnitniLgcd st0cl( fur)d, I)lrt withottt thc hr11h t:osls ttltal'gcd lt), t5,,t. tut'tnt. Irt l;tct, rvilli srr nranv irr- tlcx lunrls nov,,rrvailable, \,oL colrlrl nrix iLnd rnrLtch incle.r Iun(ls Lo l)lril(l illntosl anV porllolio yolr x';utt. Lookinq [o overweigltt ernerging-ntat' l(('l stocrl(s'.' 13uv VrLng utr|d TOCK-FUND MANAGERS have lately trounced the Standard & Poor's stock index, But they'r'e stlll ;r bttnr:h of rs. i, There's r lesson here for [raders, Suppose y0u want to overwelght smull :ks, or make a big bet on eme rglng mar- ;, or trade in 0nd Out ol stoclrs, Surc, irs active investor, it mlght seem nittttral to ' activel), managed funds. But you would probnbly fare b0tte t' wlth ex funds, whlch slmply.,mlmlc thc per- mance of a market lndex. Wl!h_q_Ehd: ' ahead of the S&P 500's 15.9%. Soon ough, mutual.fund companies wlll trumpet s triumph, headlines wlll dcclare "stock rds beat market," and experts wlll pt'o- unce "index funds are fol Iosers." Baloney, market. 0ver th0 l)irst :j0 -yeil s, tlre \Vilslrirr: llf)()r) has climbed l0 5r,l ;t t,ciLr', slightll,helo\\, ll)(' S&l' 500's 10.7ii but r:otnforlablt' itheitd oI lht, l].5' I stock-f llnrl il\'ctilg(, /rltct'nativelt,, if you ulrearll' o\vn iut S&l' i()ll f und, you nriglrt complern0nt tlllrl lrrrlrling rvillr ;r Wtlshire.1500 erlended murk(,1" fund, rvlriclr rrr' clrrdes [J.S stocks nol inclrrcled rn the S&l'5011.-llr duplir:ale the hroirrl mat ket, plrt Sl ln tlre \\rrls)tir c 4500 fol'ever)i S4...
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This note was uploaded on 09/08/2010 for the course BUS 172B at San Jose State University .

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HdOut11Cont-MrktEfficiency - ,. / / . a ,: t'71 -t'...

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