Free Money Finance: Index Investing Out-Performs Most Actively Managed Funds, Costs Taxes are Why

Free Money Finance: Index Investing Out-Performs Most Actively Managed Funds, Costs Taxes are Why:

"Here's a piece a reader pointed to that details many of the benefits of index investing from the NY Times. I'll highlight a couple of their main points including how indexing out-performs most actively managed funds on a regular basis: This year through September, only 28.5 percent of actively managed large-capitalization funds — which try to beat the market through stock selection — were able to outpace the S.& P. 500 index of large-cap stocks, according to a new study by S.& P. In the third quarter alone, it was even worse, with only one in five actively managed large-capitalization funds beating the index. Over the five years through the end of the third quarter — a span that included both bull and bear markets — only 29.1 percent of large-cap funds managed to beat the S.& P. 500. What’s more, only 16.4 percent of mid-cap funds beat the S.& P. 400 index of mid-cap stocks, and 19.5 percent of small-cap funds outpaced the S.& P. 600 index of small-company shares. “The long term does seem to favor the indexes,"

We will be using this in all classes before the year is out, for right now it might be of most interest to SIMM.

The results are in..

Wow was that close...

22 to 21!

And the winner is...

October 11th...

The SIMM test will be October 18th.

Anyone looking for a job?

Help Wanted:

Work in finance without leaving SBU!

Flexible hours (work mainly on computer from wherever-research, editing website etc.) but some face time (shredding papers, cleaning office, copies from library).

Probably about 10 hours a week.

Looks good on resume, flexible hours. Oh and a great boss!!

While ideally I hire someone NOT in my class (so they can correct tests etc), I have to confess I am pretty desperate so I may end up hiring someone from class.

Bonds

Week 4 Tues

Accounting and Finance, Ratios

The Living Yield Curve (One Bond Strategy) | SmartMoney.com

The Living Yield Curve (One Bond Strategy) | SmartMoney.com:

"A normal yield curve, therefore, slopes gently upward as maturities lengthen and yields rise. From time to time, however, the curve twists itself into a few recognizable shapes, each of which signals a crucial, but different, turning point in the economy. When those shapes appear, it's often time to alter your assumptions about economic growth. To help you learn to predict economic activity by using the yield curve, we've isolated four of these shapes — normal, steep, inverted and flat (or humped) — so that we can demonstrate what each shape says about economic growth and stock market performance"

Types Of Bonds

Types Of Bonds:

"Bonds have many characteristics such as the way they pay their interest, the market they are issued in, the currency they are payable in, protective features and their legal status. Bond issuers may be governments, corporations, special purpose trusts or even non-profit organizations. Usually it is the type of issuer or the particular nature of a bond that sets it apart in its own category

We will be discussing the valuation of stocks and bonds in class. Figured you might like another view (instead of just the class discussion).

Interviewing for Finance and Accounting

Getting a job is too frequently overlooked at SBU. Maybe less so for accountants who seem to "get it" when it comes to job searches, but many other majors (and alas I must confess finance often falls into this category), seem to think the job will come to them.

I am not sure why that is (distance, the Bona Bubble, other?). It seems WAY too many put off search until spring or even AFTER graduation. Which is WAY too late. Start now.

"Interviewing for Accounting & Finance Majors - A Demonstration & Discussion

Wednesday, September 19
4 - 5:15 p.m.
Room 211/213 Reilly Center

All students are invited to attend this program which will simulate a typical interview experience. Find out what to expect in an interview by watching an employer/student role-play of the situation. Ask questions and get advice from alum (Andy Neyman, Ernst & Young) who's a professional in the field. Please sign up in advance with the Career Center, if you plan to attend this program.

Please contact the Career Center, room 216 RC, x2384, if you have any questions.

Rene e Caya-Bizzaro, Assistant Director, The Career Center"

20 Essentials for Achieving Financial Literacy - TheStreet.com University -

20 Essentials for Achieving Financial Literacy - TheStreet.com University:

"There is a tendency to select courses on the basis of the ease of the curriculum or grade-friendliness of the instructor. As a student, this type of strategy tends to benefit you in the short term, but later in life you will regret not having taken certain courses with more valuable, practical content."

His list includes Economics, math, and even finance!

Tues of week 3

Predominantly TVM

Thursday of week 3

Thursday of week 3--covered future values, problems with relying on historical returns, importance of expenses in Mutual funds.

Note this is out of order. Somehow forgot to upload Tues of week 3.

Thursday of the second week of class

The first part of this (75 minutes) is class, the last part is that I left the recorder on by mistake, but had not realized it until I uploaded it. Sorry...

Finance 401 Advance Corp Finance class 1

A look at the Financial System, Nexus of Contracts, and REMM model of Human Behavior

BonaSIMM

Just an FYI...if you want to follow the goings on in SIMM, here is your chance! a new Blog.

BonaSIMM: "Blog will be for Students in Money Management at St. Bonaventure University. We will use it to keep up to date on changes in our portfolio as well as to communicate with various stakeholders (donors, investors, as well as each other). The students in the class will be writing [much of] the material."

'Different World' Video - Bucky Covington - AOL Music

'Different World' Video - Bucky Covington - AOL Music: "'Different World' Video | Bucky Covington"

We will be talking about expected future returns and that has to bring up survivorship bias problems. Think about how this song is a great example of the survivorship bias. (Or if you have read Black Swan, you can also think of Casanova.)

Two emails from a past student

I won't say who (unless I get permission), but I got two emails from a former student today...

in first email:

"I wanted to drop you a note to say hello and share with you that your class has helped me tremendously at my job. I randomly have memories of your class lectures pop into my head....from Ratios to Backdating Stock Options (weird huh). Also, being able to speak in meetings and discuss the Nexus of Contracts to summarize the 'entire picture' has earned me brownie points.

Hope all is well."

I then thanked him/her and asked what exactly work involved etc. The reply contained the following:

"I work for [large investment bank who I will delete] doing Corp. Fin. Started in Jan. in Core Deposits Finance....but through successful networking got on their Finance Mergers & Acquisition team...so now I am working on the LaSalle Bank merger in Chicago.

It's a pretty sweet gig because they got me a corporate apartment in downtown Chicago, let me fly anywhere I want on the weekends (within reason..), and I still have my apt in Charlotte.

It's interesting how in school I heard people say "We don't need to know this stuff now, because we'll be trained on the job".... well that is completely false... You should share it with your kids.

The competition is so intense in the workplace (from my observation) that there really isn't formal on the job training. You're given some guidance, but it's up to you to understand how things work. That is why I find myself going back to your website and re-reading Nexus of contracts and other notes (NPV, Cap Budgeting etc)...starting at the very high level to see the entire picture...not just the task that is asked of me. Now I see more and more of how you emphasized it every single day...

Financial Rounds: Advice For New College Freshmen

Financial Rounds: Advice For New College Freshmen

Freshmen or grad student, much good advice from the Unknown Professor and Ben Stein.

Chapter 12 readings for 401

It was pointed out to me that I failed to mention what parts of chapter 12 you are to read. So for now, let's just read section 12.3. It is on some examples of agency cost problems.

Finance 401 Advance Corp Finance class 1

A look at the Financial System, Nexus of Contracts, and REMM model of Human Behavior