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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (2193)	11/21/1998 7:19:00 AM
From: Justa Werkenstiff	Read Replies (3) \| Respond to of 15132

I2: Returns for 1972 through 1977 from Ibbotson: 1972: 19% 1973: -14.7% 1974: -26.5% 1975: 37.2% 1976: 23.8% 1977: -7.2% My figures for the rest of the years are a little bit different than your numbers but we are talking about tenth(s) of a percentage so no big deal. Thanks for the great table.

To: Investor2 who wrote (2193)	11/21/1998 11:56:00 AM
From: David Bogdanoff	Read Replies (1) \| Respond to of 15132

I2; Just came across your interesting post on index performance vs. managed funds and have not had an opportunity to look closely at it. But I will offer a some comments. It is important to compare like with like(as BB says); do the managed funds represent diversified larger cap stocks typical of the make up of the S&P 500? It would not be meaningful to compare the S&P 500 to sector funds, income funds, international funds, allocation funds, bond funds, etc. I recall reading articles in the WSJ in the past 2 or 3 years on the performance of index funds, since index funds have done so well. One article was a summary of an academic study of index funds which found outstanding performance of index funds vs. managed funds, especially when comparing a managed fund over a multi-year period. It is very hard to find a fund which has outperformed an index fund over a 5 year period. Another point made was that index funds have an inherent advantage in bull markets because they are fully invested, whilst managed funds keep some money in cash, waiting for buying situations. IMHO it is tricky to make truly meaningful quantitative comparisons because many managed funds cease to exist(are dissolved or merged with other funds) and disappear from the comparison data base. Also, tax efficiencies are different for different funds and have differential impacts depending on an investor's tax bracket in each year. And there are also differences in dividends which are not easily incorporated in a comparison. Nonetheless, index funds do seem to have genuine outstanding performance and tax efficiencies. David