As far as my background, I don’t claim any expertise in investing, or any financial field. Earlier on, I did some studying with friends called the Foolish Collective at the Motley Fool, including taking a course on line from Dr. Aswath Damodaran of Stern U, NY. It was quite enlightening and enjoyable, and I still miss my friends from way back then.

I guess I might identify with the Black Sheep, as I have yet to fit in with any group politics, philosophy or religion. The irony with my experience with the Foolish Collective was a statement Dr. D made during the course came true. He said that before the end of the course, we would believe more strongly in EMH. By the end of the course I did, in fact so strongly, I decided to pass on individual equities in favor of buying and selling index funds.

To cut to the chase, as I can get long winded, I will offer the more I studied index funds as well as later ETFs, the more I came to the conclusion a fairly sharp economist, John Maynard Keynes knew what he was talking about when he said; “The market can stay irrational longer than you can stay solvent.”

Over the years and mega-arguments with saintly patient, heavy hitters at the Vanguard Diehard forum, I came to the conclusion trading index and low cost managed funds and/or ETFs offered no more opportunity than trading individual equities.

Pretty much what I am trying to say in this long-winded introduction is, I came to believe;

Asset allocation is the only control you have over your investment risks and returns.

Chin

Hi Chin:

"Asset allocation is the only control you have over your investment risks and returns."

You may have overlooked costs, tax-efficiency, behaviorial actions (or non-action).

Best wishes.
Taylor

[quote user="Taylor Larimore"]

Hi Chin:

"Asset allocation is the only control you have over your investment risks and returns."

You may have overlooked costs, tax-efficiency, behaviorial actions (or non-action).

[/quote]

Hi Taylor,

Thanks for the thoughts. There are higher trading costs associated with Slice-n-Dice, which, yes, should be considered. However, we now have records of how well Vanguard has managed to track their benchmarks with their various funds, both indexed and managed. Vanguard appears to be fairly decent as positive tracking.

I covered taxes in the "Choosing funds, fixed and taxable," and the greatest way to reduce behavioral actions is to set your asset allocation and stick with it, huh?

Chin