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Politics : Ask Michael Burke

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To: Michael Bakunin who wrote (78946)4/3/2000 8:23:00 PM
From: BGR  Read Replies (1) of 132070
 
Michael,

As for choosing the benchmark, S&P500 has been the accepted diversified benchmark used in the academia for a long time. As for leverage, that is done solely to adjust the beta, again straight out of Finance 101. As for the S&P500 outperforming most others, that is precisely the point, that passive indexing in a diversified index with appropriate leverage (matching risk tolerance) yields the best results! Sorry, but your criticism about cherry picking would hold water if I had chosen something like the NASDAQ - which has outperformed the S&P500 but is less diversified.

As for which economy to choose to invest in, I was talking strictly about domestic investment. I do not know a lot about international index funds, but would be happy to do the research to see how JR's performance stacks up against any representative international index. Any suggestions about indexes?

-BGR.
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