Actively managed funds

[CordMcNally]

Why have I chosen this path? It chose me. I migrated away from what didn't work for me and towards what does. It's a more difficult path than the traditional investor-saver path. I see here physicians regularly complaining about burnout, depression, long work ours, employers, discontent with the actual job and administrative hassles, complacency accumulating long term debt. I decided long ago not to have any of that, and that makes this path more than worth it for me.

The thug life has chosen me, as well. Also, you can help fight all of those things you mentioned with a traditional path to FI. Actually, the traditional path to FI is basically guaranteed for the typical physician.

I haven't actually seen data regarding long term active versus passive fund returns, after expenses. I can't really deny or confirm. It's very nuanced - even if a fund outperforms it can actually underperform in the real world due to tax efficiency in taxable vs. tax advantaged accounts, etc. There can certainly be a whole bunch of funds concentrated in poor sectors that underperform or in strong sectors that outperform for a decade or two then the entire sector goes out of favor and underperforms the averages. A prolonged major recession like 2008 can reverse outperformance to underperformance upon a market turn at least for the correction phase. Doing what I do blindly without continuing financial education likely will lead to underperformance and indexing would be preferred. Not unlike what I did with business start-up/expansion and commercial real estate. Easy is not an option.

No, I know you've seen the data but you just refuse to acknowledge it. This is the first time where you've even partially acknowledged that passive investing typically beats active investing.

1- I found it quite easy (for myself, perhaps not others) to choose sectors for which data supports continued strength versus those that have remained weak, and as you know I posted this a few years ago. Maybe it was luck, but what I said then seems to still hold true.

Why waste time and gambling with money on trying to pick winners from losers when you can own all the winners (and losers, too) but ultimately do better than a majority of other investors?

2- I found it quite easy (for myself, perhaps not others) to research and find a vast array of funds that have consistently outperformed SP for a long time - inception date, 10-year annualized, since I bought in, etc. Of my current holdings, perhaps 1 or 2 didn't keep up with SP (as you know I tend to hold about 10-12 funds at any given time); however the others had significant outperformance - that's partially how I got about 50% returns this year in retirement accounts despite that, and a lot better than indexing almost every year. Even half of 50% in normalized years would be a big deal to me. I personally have found plenty of actively traded funds that have outperformed SP over the long term.

The article I posted in another thread where 91.6% of active funds couldn't beat their S&P 500 benchmark over 15 years disagrees that there is a 'vast array of funds' out there that have consistently outperformed the S&P.

3- Neither I nor my portfolio care how any individual fund is performing.

And nobody should care how other people's portfolios are performing. As Benjamin Graham said, it's about controlling yourself at your own game.

6- Was it worth all the effort? It feels like it's in my DNA and perhaps why so few have the drive. It was a pleasure to problem solve and meet the challenge, probably regardless of the returns though they look pretty good with overall NW estimates approach 9 figures at some point based on current, long term trajectory.

Your constant arrogance while speaking to a generally incredibly motivated population aside, projecting a 9 figure net worth long term could easily be done with a decent earning/saving physician.

7- If I'm forced to retire early (health issues, PCP's replaced by robots, etc.) I'm fully at peace as a lot of my income and returns are not dependent on active work.

So of course any investment (market or otherwise) can outperform or underperform SP over the short and long term. I've spent 20 years making sure my portfolio of investments (market and otherwise) are optimized. Some luck yes. A lot of luck maybe. All luck no. Some effort yes. A lot of effort gosh yes. All effort, no. Strategically planning for another 20 yeas of the same or better. Not married to any specific investment, fund, sector, active or passive fund strategy, plan. Seasons change, I evolve with them rather than accepting a suboptimal status quo. I say this because I think it is central to success but very difficult for may docs.

While your plan has worked for you, you still seem to miss the point that your path is likely not generalizable to most physicians. Making smart decisions in their personal life, learning basic personal finance/investing, and living beneath their means is a guaranteed successful path for any physician and that's the most important take away from this forum.

[jacoavlu]

Why have I chosen this path? It chose me...

rather than accepting a suboptimal status quo.

my biggest issues with you

1. arrogance and obfuscation
2. consistent denigration of the bogleheads / WCI index approach

[EntrepreneurMD]

my biggest issues with you

1. arrogance and obfuscation
2. consistent denigration of the bogleheads / WCI index approach

When traditional index funds are the better performers, I will be glad to buy them back. I have no problem with them. Why would I?

Or are you saying I should give up the returns I obtained with my current holdings over the years, moving forward regardless?

Many here don't agree with Jim regarding real estate (I happen to agree with him though). No one else resorts to name calling. You're better than that (and the repeated swearing).

Wish you well.

[jacoavlu]

When traditional index funds are the better performers, I will be glad to buy them back. I have no problem with them. Why would I?

Or are you saying I should give up the returns I obtained with my current holdings over the years, moving forward regardless?

Many here don't agree with Jim regarding real estate (I happen to agree with him though). No one else resorts to name calling. You're better than that (and the repeated swearing).

Wish you well.

read again what I wrote and if you still have questions let me know.

[EntrepreneurMD]

read again what I wrote and if you still have questions let me know.

Same question. Swap CPOAX or DXQLX for VTSAX or VFIAX? Asking for help with a retirement portfolio as others do here, as they are widely held SP index funds from what I understand. You seem rather confident about it.

[jacoavlu]

Same question. Swap CPOAX or DXQLX for VTSAX or VFIAX? Asking for help with a retirement portfolio as others do here, as they are widely held SP index funds from what I understand. You seem rather confident about it.

anywhere did I tell you to invest your funds differently?

[TheDangerZone]

When traditional index funds are the better performers, I will be glad to buy them back. I have no problem with them. Why would I?

There are always going to be cherry picked active funds that outperform the index. Knowing those ahead of time has proved to be a fool's errand for the vast majority. You seem to think you belong in the minority.

Time will tell (and no, your shift to active funds and claimed overperformance for a few years is not definitive proof that it is an overall good strategy).

[EntrepreneurMD]

anywhere did I tell you to invest your funds differently?

You confuse me. You say over the long term active funds will underperform traditional indexing. The implication is that even if active investing outperforms for now/years, they're still not worth buying. You did acknowledge that I was able to put together a portfolio of outperforming funds, acknowledged as arrogance when I say I didn't find it too difficult to beat indexing by utilizing them for a few years now. So asking for feedback on what to do now? Might give me some humility. Thread is about actively managed funds. Based on your position I was asking what I should do. Should I sell and swap out? If you can show resolve, we'll know you stand by your position. You don't seem to be confident if you can't answer a routine question that has been asked and answered many times on this site. I think I know why. Nothing wrong with keeping your true feelings to yourself.

[CordMcNally]

You confuse me. You say over the long term active funds will underperform traditional indexing. The implication is that even if active investing outperforms for now/years, they're still not worth buying. You did acknowledge that I was able to put together a portfolio of outperforming funds, acknowledged as arrogance when I say I didn't find it too difficult to beat indexing by utilizing them for a few years now. So asking for feedback on what to do now? Might give me some humility. Thread is about actively managed funds. Based on your position I was asking what I should do. Should I sell and swap out? If you can show resolve, we'll know you stand by your position. You don't seem to be confident if you can't answer a routine question that has been asked and answered many times on this site. I think I know why. Nothing wrong with keeping your true feelings to yourself.

I think you're looking for something that was never said.

[EntrepreneurMD]

There are always going to be cherry picked active funds that outperform the index. Knowing those ahead of time has proved to be a fool's errand for the vast majority. You seem to think you belong in the minority.

Time will tell (and no, your shift to active funds and claimed overperformance for a few years is not definitive proof that it is an overall good strategy).

Jaco knows I've owned most of them for years now. I've repeatedly challenged anyone here to find any fund, PASSIVE or ACTIVE, with a 10 year return (long term) better than my largest holding (currently showing 37.5%), which he also knows I first purchased in 2014. No takers. I was hoping to get some hits so I can consider them.

[jacoavlu]

Should I sell and swap out? If you can show resolve, we'll know you stand by your position. You don't seem to be confident if you can't answer a routine question that has been asked and answered many times on this site. I think I know why. Nothing wrong with keeping your true feelings to yourself.

yes my advice would be move 100% of your investment assets in tax protected accounts, to low cost index funds based on your chosen asset allocation, across your entire portfolio. Do it Monday

assets in taxable with unrealized gains is different. But should still be factored into overall AA

[Tim]

Jaco knows I've owned most of them for years now. I've repeatedly challenged anyone here to find any fund, PASSIVE or ACTIVE, with a 10 year return (long term) better than my largest holding (currently showing 37.5%), which he also knows I first purchased in 2014. No takers. I was hoping to get some hits so I can consider them.

Funny how it doesn't really matter, does it.
Hope you can afford college for your kids. That was the original question.

[EntrepreneurMD]

yes my advice would be move 100% of your investment assets in tax protected accounts, to low cost index funds based on your chosen asset allocation, across your entire portfolio. Do it Monday

assets in taxable with unrealized gains is different. But should still be factored into overall AA

Which 3 funds in retirement accounts, and in what relative proportions? 1/3, 1/3, 1/3? I'd be new to the pure indexing thing. Assume I stay aggressive, no bonds in tax advantaged for AA.

[TheDangerZone]

Jaco knows I've owned most of them for years now. I've repeatedly challenged anyone here to find any fund, PASSIVE or ACTIVE, with a 10 year return (long term) better than my largest holding (currently showing 37.5%), which he also knows I first purchased in 2014. No takers. I was hoping to get some hits so I can consider them.

We've been over this, if you were getting these types of returns for the last 6-7 years, you'd be well in to the 8 figures by now. Last time your response was well you really haven't been doing it very long with most of your portfolio. Now you're once again saying you've owned them for "years." Which is it? The math doesn't add up.

Furthermore, getting good returns during the longest bull market in history is not really anything special. Most of us are investing for the long term. 30, 40, 50+ years through many bulls and bears. Active investing has never been able to see itself through thick and thin. Your inability to acknowledge this continues to be astounding.

[EntrepreneurMD]

Funny how it doesn't really matter, does it.
Hope you can afford college for your kids. That was the original question.

Thanks for asking. My first kid is in the scholarship application process. I was pleasantly surprised by how much funding is available in the form of merit based grants to the desired private university. I didn't see that coming at all. One more scholarship to apply for, which could mean a free 4 year ride. We'll see what happens with the next kid, and grad school.