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Tom Lee, the managing partner and head of research at Fundstrat Global Advisors, shared his bullish prediction for the S&amp;P 500, foreseeing it reaching 15,000 by 2030.

Fundstrat&#39;s Tom Lee Predicts S&amp;P 500 Will Hit 15,000 By 2030 Driven By Gen Z And AI Wave

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Tom Lee, the managing partner and head of research at Fundstrat Global Advisors, shared his <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39350137/s-p-500-poised-to-extend-bull-run-market-strategist-sees-ai-fervor-and-ebbing-infla">bullish prediction</a> for the S&amp;P 500, foreseeing it reaching 15,000 by 2030 riding the AI wave.
What Happened: Lee&#8217;s forecast is based on the emergence of a new cycle in the stock market, where annual returns are expected to compound at a high rate. This cycle is being driven by the younger generations, particularly millennials and Gen Z.
&#8220;This will be the 3rd time that stocks entered a cycle where annual returns compound at high teens,&#8221; Lee said in an interview with CNBC&#8217;s Last Call. 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">.<a href="https://twitter.com/fundstrat?ref_src=twsrc%5Etfw">@fundstrat</a>&#39;s Tom Lee says the S&amp;P 500 will hit 15,000 by 2030. &quot;This will be the 3rd time that stocks entered a cycle where annual returns compound at high teens.&quot; <a href="https://twitter.com/search?q=%24SPX&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$SPX</a> <a href="https://t.co/31vzaEaGpo">pic.twitter.com/31vzaEaGpo</a>
&mdash; Last Call (@LastCallCNBC) <a href="https://twitter.com/LastCallCNBC/status/1806110011669549190?ref_src=twsrc%5Etfw">June 26, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
The growth of companies focused on artificial intelligence is expected to yield high returns, according to Lee. Additionally, the increasing number of digital laborers investing in the economy is contributing to this cycle.
S&amp;P 500 ETF options provide investors with <a href="https://www.benzinga.com/money/best-sp-500-etfs">multiple ways to invest</a> in America&#8217;s largest 500 companies. Interested investors may check out the Schwab U.S. Large-Cap ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SCHX#NYSE">SCHX</a>), Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>), and iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>) to diversify their portfolios.
See Also: <a href="https://www.benzinga.com/news/24/06/39493328/hillary-clinton-offers-advice-to-biden-ahead-of-presidential-debate-its-a-waste-of-time-to-try-to-re?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Hillary Clinton Offers Advice To Biden Ahead Of Presidential Debate: &#8216;It&#8217;s A Waste Of Time To Try To Refute Mr. Trump&#8217;s Arguments&#8217;</a>
Why It Matters: Lee&#8217;s prediction is in stark contrast to the forecasts of other financial experts. In May, Goldman Sachs predicted a <a href="https://www.benzinga.com/markets/equities/24/05/38863242/stock-market-rally-for-2024-has-peaked-goldman-sachs-forecasts-flat-return-from-now-till-the-end">flat return for the S&amp;P 500</a> for the remainder of 2024, suggesting that the stock market rally had peaked. However, Lee&#8217;s forecast indicates a more extended period of growth.
Another analyst, Gene Munster, predicted that the stock market would continue to rise for <a href="https://www.benzinga.com/markets/equities/24/05/38910879/stock-market-to-rally-for-3-5-years-before-ai-bubble-bursts-predicts-veteran-analyst-gene-munste">another three to five years</a> before an AI bubble bursts. This aligns with Lee&#8217;s forecast of a sustained period of growth driven by AI-focused companies.
However, not all experts share this optimistic outlook. Economist Harry Dent warned of a <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39257592/economist-warns-crash-of-a-lifetime-is-coming-predicts-s-p-500-to-plummet-86-from-t">looming &#8220;crash of a lifetime&#8221;</a> due to the current &#8220;everything&#8221; bubble, which he believes has yet to burst. Despite this, Lee&#8217;s prediction suggests a period of sustained growth, particularly in the AI sector.
Read Next: <a href="https://www.benzinga.com/news/24/06/39516013/mark-cuban-accuses-trump-of-ripping-off-thousands-of-hard-working-americans-and-not-wanting-to-leave?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Mark Cuban Accuses Trump Of Ripping Off &#8216;Thousands Of Hard Working Americans&#8217; And Not Wanting To Leave The White House</a>
Image Via Shutterstock 
This story was generated using <a href="https://www.benzinga.com/author/benzinga-neuro">Benzinga Neuro</a> and edited by <a href="https://www.benzinga.com/topic/Kaustubh-Bagalkote" target="_blank" rel="noreferrer noopener">Kaustubh Bagalkote</a>

Fundstrat's Tom Lee Predicts S&P 500 Will Hit 15,000 By 2030 Driven By Gen Z And AI Wave

Broad market U.S. equity exchange traded funds have been fertile ground in the ETF fee wars. While annual fees are a fact of life in the fund universe, some ETFs charge barely noticeable expense ratios and data confirm investors love these low-cost products.
Just look at the iShares S&amp;P 1500 Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/itot#NYSE">ITOT</a>). With an annual fee of just 0.03 percent, or $3 on a $10,000 investment, ITOT competes with ETFs such as the Schwab U S Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) and the Schwab U.S. Broad Market (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) for honors among the least expensive US-listed ETFs.
ITOT competes with those Schwab funds &ldquo;as the lowest cost ETPs available in the U.S. listed ETP spectrum. This fact is surely helping asset raising assets in this fund (over $2.7 billion in inflows thus far in 2017),&rdquo; said <a href="http://streetonefinancial.com/">Street One Financial</a> Vice President Paul Weisbruch in a recent note.
<h3>
	Somewhat Different</h3>
Total market ETFs, such as ITOT, offer some differences when measured against the S&amp;P 500, but there are similarities as well. ITOT follows the S&amp;P Total Market Index, which is a vastly different benchmark than the S&amp;P 500. The big difference is in the number of holdings. While the S&amp;P 500 holds just over 500 stocks, ITOT&#39;s roster <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/10/8562034/an-overlooked-etf-rakes-in-the-cash">is just over 3,600 stocks</a>.&nbsp;
None of ITOT&#39;s holdings command 3 percent of the ETF&#39;s weight. Top 10 holdings in the ETF include fare typical of cap-weighted, broad market funds, such as Apple Inc. (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>), Microsoft Corporation (NASDAQ: <a class="ticker" href="/stock/msft#NASDAQ">MSFT</a>) and Exxon Mobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>).
Even with the differences between itself and the S&amp;P 500, ITOT&#39;s three-year returns and annualized volatility over that span only show negligible differences relative to the benchmark U.S. equity index.
<h3>
	Cheap Is Popular</h3>
As is often said, fees make a difference for long-term investors, which likely explains why so many of this year&#39;s top asset-gathering ETFs can be deemed &ldquo;low-cost&rdquo; products.
&ldquo;The fact that expense ratios are extremely low in these ETFs when compared to other ETPs across the U.S. listed landscape show that both retail and institutional portfolio managers continue to exhibit a very healthy appetite for &#39;cheap, passive beta&#39; exposure to markets in spite of the presence of more expensive alternatives (Active, Smart Beta) that have in many cases raised assets in their own rights,&rdquo; said Weisbruch.
ITOT now has $9.7 billion in assets under management, $2.8 billion of which has flowed into the fund this year.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/07/9742463/focusing-on-an-alternative-to-s-p-500-etfs">An S&amp;P 500 Alternative</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/07/9736860/etfs-dominate-first-half-leaving-active-with-work-to-do">ETFs Add Assets At Warp Speed</a>

There are times, particularly when it comes to individual stocks, when analyst ratings do not do investors much good. Some sell-side analysts put a buy rating on a stock after it has surged and could be overvalued.
Likewise, there have been instances of analysts letting stocks incur significant drubbings before tagging those issues with sell ratings. So investors are right to be leery of analyst ratings, whether those ratings apply to stocks or exchange traded funds. Kudos to <a href="https://www.cfraresearch.com/">CFRA Research</a> because as the firm pointed out in a note released earlier this week, some of its overweight-rated ETFs are performing well to start 2017.
<h3>Overweight Vs. Underweight Ranked ETFs And Their Performances</h3>
&ldquo;In the first two months of 2017, the Overweight ranked ETFs had 6.30 percent total return, exceeding the 5.94 percent for the S&amp;P 500 index,&rdquo; said CFRA. &ldquo;Meanwhile, the Underweight ranked ETFs gained only 4.23 percent. On a three-year and five-year total return basis, Overweight ranked ETFs outperformed the benchmark by 219 and 270 basis points, respectively, while Underweight ranked ETFs lagged by 1,206 and 1,076 basis points.&rdquo;
CFRA&#39;s ratings on fixed income ETFs are proving accurate as well. Bond ETFs rated overweight or marketweight by the firm are outpacing the Bloomberg Barclays US Aggregate Bond Index over the past year while CFRA&#39;s underweight bond ETFs are trailing the widely followed bond benchmark over the past four years.
<h3>A Look At 2 Specifics</h3>
The research firm rates over 1,000 equity ETFs. One of its overweight names is the Schwab U.S. Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>). With an annual fee of just 0.03 percent, SCHX is one of the cheapest broad market ETFs in the U.S. SCHX holds 780 stocks, significantly more than are found in the S&amp;P 500.
The PowerShares S&amp;P 500 Quality ETF (NYSE: <a class="ticker" href="/stock/sphq#NYSE">SPHQ</a>), which is up 5.4 percent year-to-date, <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/02/9088863/a-quality-etf-that-delivers">is another one of</a> CFRA&#39;s overweight ETFs.
SPHQ, which came to market in late 2005, follows the S&amp;P 500 Quality Index. That index &ldquo;tracks the performance of stocks in the S&amp;P 500 Index that have the highest quality score, which is calculated based on three fundamental measures, return on equity, accruals ratio and financial leverage ratio,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPHQ">according to PowerShares</a>.
SPHQ &ldquo;earns an Overweight ranking not only for the low risk considerations of its holdings, but also for the relative attractiveness of the constituents. The ETF, which has a net expense ratio of 0.29 percent (0.38 percent gross expense ratio), has top-10 holdings in Altria Group Inc (NYSE: <a class="ticker" href="/stock/mo#NYSE">MO</a>), Home Depot Inc. (NYSE: <a class="ticker" href="/stock/hd#NYSE">HD</a>), and Boeing Co. (NYSE: <a class="ticker" href="/stock/ba#NYSE">BA</a>); all three have above-average S&amp;P Capital IQ Quality Rankings and are undervalued according to CFRA equity analysts,&rdquo; said the research firm.
Related Links:
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<a href="https://www.benzinga.com/news/17/03/9163527/index-shake-ups-boosts-shares-of-amd-raymond-james">Index Shake-Ups Boosts Shares Of AMD, Raymond James</a>

The Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) did not enter the exchange-traded funds business until late 2009, a relatively late entry, but the company is making up for lost time. Home to $50.4 billion in ETF assets under management as of July 21, Schwab is now the fifth-largest U.S. ETF sponsor.
<h3>Late To The Party, But No Problem</h3>
Year-to-date flows indicate Schwab is competing quite well with larger rivals, such as BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>)'s iShares and Vanguard, the two largest U.S. ETF issuers.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/07/8268649/shorts-still-like-this-etfs-holdings">Shorts Still Like This ETF's Holdings</a></bzrelatedlink>
Schwab, &ldquo;a long-time provider of brokerage services and mutual funds, has emerged as one of the faster growing ETF providers in 2016. Aided by $7.69 billion of net inflows year to date through July 15, the firm has risen up the ranks and pulled closer to BlackRock iShares and Vanguard Group. Schwab, which has among the lowest expense ratios in the industry, has benefited from growing use of ETFs among retail investors and financial advisors,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a note out Wednesday.
<h3>High Ratings</h3>
The research firm has a five-star rating, its highest, on shares of Schwab. Although it has surged more than 19 percent in just the past month, the stock is down more than 12 percent year-to-date.
A big reason advisors and investors are embracing Schwab ETFs is fees, as in Schwab has some of the lowest fees in the ETF universe. In some cases, Schwab ETFs sport lower fees than Vanguard equivalents, an impressive feat when considering Vanguard is often thought as the low cost leader in the fund world.
&ldquo;Schwab U S Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) and Schwab U S Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) are the firm&#39;s two largest ETFs and each have a 0.03 percent expense ratio. SCHB gathered $681.5 million of new assets year to date through July 15, while SCHX had $569.6 million of net inflows,&rdquo; said S&amp;P Capital IQ.
The research firm rates both of those ETFs Overweight.
Schwab&#39;s ETF lineup is also benefiting from increased flows to <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/07/8206269/another-milestone-for-bond-etfs">fixed income ETFs</a> this year. Overall, the issuer sponsors four bond ETFs.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/07/8261845/new-direxion-etfs-target-gold-miners-european-financials">New Direxion ETFs Target Gold Miners, European Financials</a></bzrelatedlink>
&ldquo;With $994.3 million, Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>) gathered the second most net inflows thus far in 2016 among the firm&#39;s offerings. The $3.18 billion product, which holds investment-grade corporate bond and U.S. government securities, has a 0.05 percent expense ratio that is lower than comparable ETFs from iShares and Vanguard,&rdquo; added S&amp;P Capital IQ.
The research firm rates SCHZ Overweight as well.
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
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Most people invest in a 401(K) plan with high hopes of strong returns on their investment. However, the only thing guaranteed when it comes to your 401(k) plan is that participation comes at a price.
According to a new Hearts and Wallets poll, many Americans don&rsquo;t realize how much their 401(K) plan is costing them in fees.
The majority of 401(K) plans invest in mutual funds and ETFs, almost all of which charge an &ldquo;expense ratio&rdquo; for fund management. As of 2014, the average expense ratio for funds that invest in stocks was around 0.54 percent, which may seem small. However, for a number of Americans that don&rsquo;t realize they are paying anything at all for their 401(k), several hundred dollars in fees per year could come as quite a surprise.
<h3>It Doesn't Matter How The Fund Performs</h3>
The bad thing about these fees is that they are taken out of a fund each year no matter how it performs. In other words, if your 401(K) loses 15 percent of its value in one year, you will still be paying these fees.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/general/education/16/05/8008339/how-do-rising-interest-rates-affect-the-average-american#ixzz49UfyWYmk">How Do Rising Interest Rates Affect The Average American?</a></bzrelatedlink>
&ldquo;When you add together the Americans who say they don&rsquo;t know what they pay for their financial products and the number of people who say they pay nothing for the products they obtain through their retail financial stores, we have a major problem,&rdquo; <a href="http://www.heartsandwallets.com/most-americans-are-clueless-on-cost-of-their-financial-products/news/2016/04/">Hearts and Wallets</a> CEO Laura Varas explained.
The good news for 401(K) participants is that expense ratios have generally been on the decline in recent years. <a href="http://www.wsj.com/articles/401-k-fees-already-low-are-heading-lower-1463304601">ICI reports</a> the average expense ratio for funds invested in stocks was 0.74 percent as recently as 2009.
According to etfdb.com, the following five broad equity ETFs all have expense ratios of 0.05 percent or lower:
<ul>
<li>Schwab U S Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>)
</li><li>Schwab U S Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>)
</li><li>Vanguard Total Stock Market ETF (NYSE: <a class="ticker" href="/stock/vti#NYSE">VTI</a>)
</li><li>Vanguard 500 Index Fund (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>)
</li><li>Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>)</li></ul>
If you want to know exactly how much you are paying in fees for your 401(K) plan, the information is required to be disclosed to you in your quarterly report from your plan&rsquo;s provider. And by the way, the roughly $4 quarterly cost of providing this information to you <a href="http://www.bankrate.com/finance/retirement/paying-401k-plan-1.aspx">may be</a> deducted from your 401(K) by your employer.
Disclosure: The author holds no position in the stocks mentioned.

In an announcement made Tuesday, BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>)'s iShares unit, the world&#39;s largest issuer of exchange-traded funds, said it is paring the fees on seven of its core ETFs, bringing some of the annual expense ratios on those funds to as low as 0.03 percent per year. That works out to be a mere $3 for every $10,000 invested.
The news extends a multi-year theme of ETF issuers paring fees to lure advisor and investor assets while putting iShares&#39; rivals, such as Vanguard and Charles Schwab, on notice that the ETF giant is more than willing to compete on cost.
Just last month, State Street Global Advisors (SSgA), the third-largest U.S. ETF sponsor,<a href="http://www.benzinga.com/news/15/10/5902336/sector-spdrs-pare-fees"> lowered the annual expense ratios</a> on its popular sector SPDR lineup, including the Energy Select Sector SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) and the Technology SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>), to 0.14 percent a year from 0.15 percent.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5974088/this-tech-etf-has-almost-doubled-in-size-in-a-month">This Tech ETF Has Almost Doubled In Size In A Month</a></bzrelatedlink>
<h3>iShares ETFs With Newly Lowered Fees</h3>
One of the ETFs iShares lowered fees on is the $2.7 billion iShares S&amp;P 1500 Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/itot#NYSE">ITOT</a>), which now charges 0.03 percent per year. That prompted Schwab to say it will lower the annual expense ratio on the Schwab U S Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) to 0.03 percent <a href="http://www.etftrends.com/2015/11/schwab-responds-to-ishares-fee-cuts/">from 0.04 percent</a>.
&ldquo;As ETFs gather assets, it is routine for expense ratios to come down. Through September 2015, the iShares Core series gathered $63 billion since its creation. However, we think investors need to also understand how ETFs trade and what&#39;s inside,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a new research note.
The research firm highlights the $8.6 billion iShares Core MSCI Emerging Markets ETF (iShares Inc. (NYSE: <a class="ticker" href="/stock/iemg#NYSE">IEMG</a>)) as an example of the iShares core suite&#39;s asset-gathering proficiency. IEMG has been a hit with professional and retail investors, and now with a new lower fee of 0.16 percent per year, it is one of the <a href="http:// http://www.benzinga.com/trading-ideas/long-ideas/15/11/5972014/blackrocks-ishares-struts-its-low-fee-etf-stuff">least expensive</a> emerging markets ETFs on the market today.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5972014/blackrocks-ishares-struts-its-low-fee-etf-stuff">Blackrock's iShares Struts Its Low Fee ETF Stuff</a></bzrelatedlink>
While the iShares Barclays Aggregate Bond Fund (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>) has been a success and is one of the largest bond ETFs in the United States, the core suite now has an international equivalent in the form of the iShares Core International Aggregate Bond ETF (NYSE: IAGG).
S&amp;P Capital IQ sees IAGG as a credible competitor to the Vanguard Total International Bond ETF (Vanguard Charlotte Funds (NASDAQ: <a class="ticker" href="/stock/bndx#NASDAQ">BNDX</a>)).
&ldquo;IAGG takes a currency hedged approach to offering exposure to investment grade international bonds. However, the index IAGG will track has a lower issuer cap than BNDX, which we think will reduce the iShares ETF&#39;s exposure to Japanese sovereign bonds for example. We expect that the different exposures will impact the ETF&#39;s duration, yield and performance,&rdquo; said the research firm.
Image Credit: <a href="https://pixabay.com/en/stock-exchange-trading-floor-738656/">Public Domain</a>

Accessing the S&amp;P 500 via exchange traded funds is not difficult. Three ETFs &ndash;- the SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>), the Vanguard S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>) and the iShares Core S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>) &ndash;- offer exposure to the traditional version of the benchmark U.S. index.

	Although the aforementioned ETFs all track the same index, there are differences among the trio that long-term investors need to consider. For example, SPY, the world&#39;s largest ETF, is structured as a unit investment trust. That means investors that are considering holding SPY for extended periods cannot reinvest the dividends paid by the fund.

	&ldquo;This creates a cash drag when prices are rising. SPY is also not allowed to engage in securities lending--a technique many funds use to generate extra income that can be used to defray the cost of replicating an index,&rdquo; according to <a href="http://www.morningstar.com/Cover/videoCenter.aspx?id=713948">Morningstar</a>.

	Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5831186/an-apple-etf-for-rising-rates">An Apple ETF For Rising Rates</a>

	SPY is also the most expensive of the three S&amp;P 500 ETFs mentioned here with an annual expense ratio of 0.0945 percent, or less than $9.50 per $10,000 invested. IVV and VOO charge 0.07 percent and 0.05 percent per year, respectively. Knowing that, it is not surprising that VOO offers a modest performance advantage over longer holding periods. For example, VOO is up 45.2 percent over the past three years, a tenth of a percentage point ahead of IVV and four basis points ahead of SPY.

	That is not to say SPY is bereft of advantages. As Morningstar notes, it is the most liquid S&amp;P 500 ETF and home to the most robust options market among S&amp;P 500 tracking funds.

	IVV and VOO &ldquo;are set up as regulated investment companies, a more flexible legal structure that allows reinvesting dividends and securities lending. While iShares&#39; IVV is a stand-alone exchange-traded fund, Vanguard&#39;s VOO is a separate share class of a mutual fund. VOO also has the lowest expense ratio of the three, and this has given it a slight performance edge since its inception,&rdquo; according to Morningstar.
<h3>
	Cheaper Options</h3>

	Penny-pinching investors can take heart because there are broad market ETFs that are even less expensive, in terms of annual fees, than VOO. For example, the Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) charges just 0.04 percent per year, or a mere $4 per $10,000 invested.

	SCHB has some other advantages over VOO and the S&amp;P 500 ETFs. The Schwab offering is home to more than 2,000 stocks, providing a deeper bench than S&amp;P 500 funds. Additionally, Schwab clients can trade SCHB commission-free, further reducing their investment costs. Vanguard clients have commission-free access to VOO while Fidelity clients can trade IVV sans commission.

	The Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) is also slightly less expensive than VOO. SCHX also carries a 0.04 percent annual fee and holds 760 stocks. That ETF can also be traded commission-free by Schwab clients.

S&P 500, Broad Market ETFs On The Cheap

Less than four years after the debut of its first exchange traded fund, discount broker Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) announced Thursday that its suite of 15 equity-based and bond ETFs has reached a combined $10.02 billion in assets under management. That number pertains to the firm's ETF AUM total as of February 8.

Schwab's first ETFs debuted in November 2009 and were immediately made available to the firm's clients on a commission-free basis. Since that time, California-based Schwab has leveraged the combination of commission-free trading and paltry expense ratios to become one of the fastest-growing U.S. ETF sponsors.

With $10.2 billion in ETF assets, Schwab is the tenth-largest U.S. ETF sponsor, just behind PIMCO, which has $10.3 billion in ETF assets. Three Schwab ETFs – the Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) and the Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>) – combine for about 38 percent of the firm's ETF assets.

SCHX, which competes with the Vanguard Large Cap ETF (NYSE: <a class="ticker" href="/stock/vv#NYSE">VV</a>) among other funds, has $1.2 billion in AUM, <a href="https://www.schwabetfs.com/summary.asp?symbol=SCHX">according to Schwab data</a>. SCHF, which competes with the massive iShares MSCI EAFE Index Fund (NYSE: <a class="ticker" href="/stock/efa#NYSE">EFA</a>), has $1.1 billion in AUM. SCHB is Schwab's largest ETF with $1.6 billion in assets.

Schwab's largest bond ETF is the Schwab U.S. TIPS ETF (NYSE: <a class="ticker" href="/stock/schp#NYSE">SCHP</a>) with $602.4 million in AUM. All 15 of the firm's ETFs have over $100 million in asssets.

Earlier this month, Schwab unveiled its Schwab ETF OneSource platform, which allows its clients to buy and sell 105 ETFs with $0 online trade commissions. In additional Schwab ETFs, OneSource allows the firm's clients to trade ETFs from State Street Global Advisors, PowerShares, Guggenheim, ETF Securities and United States Commodity Funds commission-free.

For more on Schwab ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3314763/schwab-unveils-massive-additions-to-commission-free-etf-lineu">here</a>.

Discount broker Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>), sponsor to some of the least expensive ETFs on the market, is making some of those funds even cheaper. In a filing with the <a href="http://www.sec.gov/Archives/edgar/data/1454889/000119312512398527/d403516d497.htm">Securities and Exchange Commission</a>, Schwab outlined fee cuts a wide array of its ETFs.

Among the Schwab funds with lower expense ratios will be two of the firm's most popular products. The Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) will see its fee reduced to 0.04 percent per year from 0.06 percent. The annual expense ratio on the Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) goes to 0.04 percent from 0.08 percent. SCHB has $1.1 billion in assets under management while <a href="https://www.schwabetfs.com/summary.asp?symbol=SCHX">SCHX had $887.5 million in AUM at the end of August</a>.

The Schwab U.S. Large-Cap Growth ETF (NYSE: <a class="ticker" href="/stock/schg#NYSE">SCHG</a>), Schwab U.S. Large-Cap Value ETF (NYSE: <a class="ticker" href="/stock/schv#NYSE">SCHV</a>). Schwab U.S. REIT ETF (NYSE: <a class="ticker" href="/stock/schh#NYSE">SCHH</a>) and the Schwab U.S. Mid-Cap ETF (NYSE: <a class="ticker" href="/stock/schm#NYSE">SCHM</a>) will see annual fees reduced to 0.07 percent from 0.13 percent.

The Schwab U.S. Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scha#NYSE">SCHA</a>) goes down three basis points to 0.1 percent from 0.13 percent. In the dividend space, Schwab slashed the expense ratio on the Schwab U.S. Dividend Equity ETF (NYSE: <a class="ticker" href="/stock/schd#NYSE">SCHD</a>) to 0.07 percent from 0.17 percent.

Schwab also reduced expenses on several of its international funds, including the Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>), which is going to 0.09 percent from 0.13 percent. The Schwab International Small-Cap Equity ETF (NYSE: <a class="ticker" href="/stock/schc#NYSE">SCHC</a>) will now have an expense ratio of 0.2 percent down from 0.35 percent.

Interestingly, the Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>) has lost the title of cheapest emerging markets ETF. That honor now goes to the Schwab Emerging Markets Equity ETF (NYSE: <a class="ticker" href="/stock/sche#NYSE">SCHE</a>), which will now charge 0.15 percent compared with 0.25 percent in the past.

Fees on the Schwab U.S. TIPS ETF (NYSE: <a class="ticker" href="/stock/schp#NYSE">SCHP</a>) were cut in half to 0.07 percent from 0.14 percent. The Schwab Short-Term U.S. Treasury ETF (NYSE: <a class="ticker" href="/stock/scho#NYSE">SCHO</a>) goes to 0.08 percent from 0.12 percent while the Schwab Intermediate-Term U.S. Treasury ETF (NYSE: <a class="ticker" href="/stock/schr#NYSE">SCHR</a>) will now charge 0.1 percent compared with 0.12 percent in the past.

The Schwab U.S. Aggregate Bond ETF (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>) also cut its fees in half to 0.05 percent from 0.1 percent while the Schwab U.S. REIT ETF (NYSE: <a class="ticker" href="/stock/schh#NYSE">SCHH</a>) will now charge 0.07 percent, down from 0.13 percent. 

All that on top of the fact that Schwab offers all of its ETFs on a commission-free basis to its clients.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

In a research note, S&amp;P Capital IQ extolled a bullish view on the Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) and gave the fund an Overweight rating.

SCHX, which debuted in November 2009 and now has $827.4 million in assets, is frequently compared against the SDPR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>), the Vanguard S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>) and the iShares S&amp;P 500 Index Fund (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>), but the Schwab offering tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, not the S&amp;P 500, and is home to 749 stocks, not 500.

"SCHX has a Marketweight ranking for the risk category. SCHX received a relatively favorable assessment from the holdings-based S&amp;P Quality Ranking input, which puts a focus on consistency and growth of historical earnings and dividends. Also, there was a relatively favorable appraisal from an analytic that is based on S&amp;P Credit Ratings of companies owned by the ETF," S&amp;P Capital IQ said in the research note.

The ETF allocates 19.3 percent of its weight to technology issues and 14.9 percent to financials. Consumer discretionary and health care names receive weights of nearly 12 percent each while consumer staples, industrials and energy each account for more than 10 percent of the ETF's weight.

"All three of the elements utilized in the cost ranking category are related to the ETF security and not its holdings. SCHX has an Overweight ranking for Cost Factors, including a relatively favorable assessment of its gross expense ratio (0.08%), and Bid/Ask Spread, and a mid-range appraisal related to Price to NAV," according to S&amp;P Capital IQ.

With an expense ratio of 0.08%, SCHX is slightly more than expensive than VOO, which charges 0.06% per year, but the Schwab ETF is cheaper than both IVV and SPY. Those funds charge about 0.09% per year. Schwab clients can also trade SCHX free of charge.

Apple (Nasdaq: <a class="ticker" href="/stock/aapl#Nasdaq">AAPL</a>) is SCHX's top holding with a weight of almost 4.1 percent. No other stock receives an allocation of more than 1.62 percent. Other top-10 holdings include AT&amp;T (NYSE: <a class="ticker" href="/stock/t#NYSE">T</a>), Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>), Exxon Mobil (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and Pfizer (NYSE: <a class="ticker" href="/stock/pfe#NYSE">PFE</a>).

Year-to-date, SPY has outperformed SCHX by 20 basis points.

S&P Likes Schwab Large-Cap ETF (SCHX)

Large Cap Blend ETFs provide access to both growth and value stocks, looking for high returns while hedging that risk with more stable securities. Large Cap ETFs invest across the entire spectrum of the US market. Stocks in the top 70% of the capitalization of the US equity market are defined as large cap.
Despite strong returns, US Large Cap Blend ETFs, including the Russell Large Cap Index (IWB), have underperformed mid cap and small cap ETFs. With a one-year trend score of 8.52%, the Russell Large Cap Index falls towards the bottom of the US Style Return Table as seen below.
<h2>US Equity Style Return</h2>
<h3>4/29/2011</h3>
 
<table border="2">
</table>
<table border="0" cellspacing="12">
<tbody>
<tr>
<th align="left">Assets Class</th>
<th>Symbols</th>
<th>04/27 Trend Score</th>
<th>04/20 Trend Score</th>
<th>Direction</th>
</tr>
<tr>
<td>Russell Smallcap Growth</td>
<td>IWO</td>
<td>14.01%</td>
<td>13.06%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Midcap Growth</td>
<td>IWP</td>
<td>12.57%</td>
<td>11.91%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Smallcap Index</td>
<td>IWM</td>
<td>11.05%</td>
<td>9.92%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Midcap Indedx</td>
<td>IWR</td>
<td>10.9%</td>
<td>10.15%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Midcap Value</td>
<td>IWS</td>
<td>9.84%</td>
<td>9.03%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Largecap Growth</td>
<td>IWF</td>
<td>9.25%</td>
<td>8.24%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Smallcap Value</td>
<td>IWN</td>
<td>8.56%</td>
<td>7.26%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Largecap Index</td>
<td>IWB</td>
<td>8.52%</td>
<td>7.38%</td>
<td>^</td>
</tr>
<tr>
<td>Russell Largecap Value</td>
<td>IWD</td>
<td>8.15%</td>
<td>6.96%</td>
<td>^</td>
</tr>
</tbody>
</table>
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
<a rel="lightbox" href="http://www.myplaniq.com/LTISystem/article_toptablechart.action?tableName=USStyleReturnTableWed"> <img src="http://www.myplaniq.com/LTISystem/article_toptablechart.action?tableName=USStyleReturnTableWed" width='600' height='400' /> </a>
<a rel="lightbox" href="http://www.myplaniq.com/LTISystem/article_lowtablechart.action?tableName=USStyleReturnTableWed"> <img src="http://www.myplaniq.com/LTISystem/article_lowtablechart.action?tableName=USStyleReturnTableWed" width='600' height='400' /> </a>
<h2>US Large Cap Blend</h2>
<h3>4/29/2011</h3>
<table id="USLargeCapBlend" class="tablesorter" border="1" cellspacing="1" cellpadding="2">
<thead>
<tr>
<th > Description </th>
<th > Symbol </th>
<th > 1 Yr </th>
<th > 3 Yr </th>
<th > 5 Yr </th>
<th > Avg. Volume(K) </th>
<th > 1 Yr Sharpe </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td>SPDR S&amp;P 500</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=SPY&amp;type=1&amp;includeHeader=true" target="_blank">SPY</a></td>
<td>15.13%</td>
<td>1.42%</td>
<td>2.64%</td>
<td>169,849</td>
<td>83.79%</td>
</tr>
<tr class="odd">
<td>iShares S&amp;P 500 Index</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=IVV&amp;type=1&amp;includeHeader=true" target="_blank">IVV</a></td>
<td>14.66%</td>
<td>2.18%</td>
<td>2.45%</td>
<td>2,992</td>
<td>79.99%</td>
</tr>
<tr class="even">
<td>Vanguard Total Stock Market</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=VTI&amp;type=1&amp;includeHeader=true" target="_blank">VTI</a></td>
<td>17.54%</td>
<td>3.35%</td>
<td>3.48%</td>
<td>1,833</td>
<td>92.09%</td>
</tr>
<tr class="odd">
<td>iShares Russell 1000</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=IWB&amp;type=1&amp;includeHeader=true" target="_blank">IWB</a></td>
<td>15.83%</td>
<td>2.66%</td>
<td>2.84%</td>
<td>886</td>
<td>86.04%</td>
</tr>
<tr class="even">
<td>Rydex S&amp;P Equal Weight</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=RSP&amp;type=1&amp;includeHeader=true" target="_blank">RSP</a></td>
<td>18.18%</td>
<td>5.79%</td>
<td>4.44%</td>
<td>1,115</td>
<td>94.46%</td>
</tr>
<tr class="odd">
<td>iShares S&amp;P 100</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=OEF&amp;type=1&amp;includeHeader=true" target="_blank">OEF</a></td>
<td>12.47%</td>
<td>0.94%</td>
<td>2.15%</td>
<td>883</td>
<td>67.2%</td>
</tr>
<tr class="even">
<td>Vanguard Large Cap</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=VV&amp;type=1&amp;includeHeader=true" target="_blank">VV</a></td>
<td>15.8%</td>
<td>2.78%</td>
<td>3.54%</td>
<td>223</td>
<td>85.55%</td>
</tr>
<tr class="odd">
<td>Schwab U.S. Large Cap</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=SCHX&amp;type=1&amp;includeHeader=true" target="_blank">SCHX</a></td>
<td>15.95%</td>
<td>NA</td>
<td>NA</td>
<td>297</td>
<td>87.97%</td>
</tr>
<tr class="even">
<td>Vanguard S&amp;P 500</td>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/fundcenter/View.action?symbol=VOO&amp;type=1&amp;includeHeader=true" target="_blank">VOO</a></td>
<td>NA</td>
<td>NA</td>
<td>NA</td>
<td>311</td>
<td>NA</td>
</tr>
</tbody>
</table>
 
Among US Large Cap Blend ETFs the Ryder S&amp;P Equal Weight ETF (RSP) and the Vanguard Total Stock Market ETF (VTI) have performed the strongest, offering one-year returns of 18.18% and 17.54% respectively. The ETF in the sector with the highest level of average volume, the SPDR S&amp;P 500 Index, returned 15.13% in the past year, near the middle of the pack.
While US Large Cap Blend ETFs have provided investors with strong returns in recent periods, many in the market believe that the sector is due for a retraction based on overheated valuations. For the time being, investors will likely find better returns elsewhere.
Symbols: <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SPY&amp;count=00149'>SPY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IVV&amp;count=0054'>IVV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VTI&amp;count=00113'>VTI</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWB&amp;count=008'>IWB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=RSP&amp;count=0050'>RSP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=OEF&amp;count=004'>OEF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VV&amp;count=0046'>VV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SCHX&amp;count=0046'>SCHX</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VOO&amp;count=001'>VOO</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWO&amp;count=0024'>IWO</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWP&amp;count=0020'>IWP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWM&amp;count=00108'>IWM</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWR&amp;count=0030'>IWR</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWS&amp;count=0023'>IWS</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWF&amp;count=0011'>IWF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWN&amp;count=0025'>IWN</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWB&amp;count=008'>IWB</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWD&amp;count=0013'>IWD</a>
 Tickers: (NYSE: SPY) (NYSE: IVV) (NYSE: VTI) (NYSE: IWB)(NYSE: RSP)(NYSE: OEF)(NYSE: VV)(NYSE: SCHX)(NYSE: VOO) (NYSE: IWO) (NYSE: IWP) (NYSE: IWM) (NYSE: IWR) (NYSE: IWS) (NYSE: IWF) (NYSE: IWN) (NYSE: IWB) (NYSE: IWD)
 
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
 
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<div class="entry" style="margin: 0px; padding: 0px; overflow: hidden;">
<div class="posttitle" style="margin: 0px; padding: 0px;"><a href="http://portfolioist.com/2011/03/28/relax-arguments-for-doing-less-with-your-investments/">Doing Less With Your Investments</a> March 28, 2011 by <a href="http://portfolioist.com/author/nanettebyrnes/">Nanette Byrnes</a></div>
<div class="entry" style="margin: 0px; padding: 0px; overflow: hidden;">
 
In his latest<a href="http://www.behaviorgap.com/"> Behavior Gap</a> Newsletter, Carl Richards nails that feeling of confusion that comes when we learn first hand that “past performance is not a guarantee of future results.”
<a href="http://smarterinvesting.files.wordpress.com/2011/03/carlrichards-hot-funds1-591x456.jpg"><img src="http://smarterinvesting.files.wordpress.com/2011/03/carlrichards-hot-funds1-591x456.jpg?w=500&amp;h=385" alt="" /></a>
Investing isn't like hiring a basketball coach, Richards argues, but rather like planting an oak tree:“You never plant a tree and then pull it out every time the wind blows just to check the roots.”
He also quotes this gem from Warren Buffett: “Benign neglect, bordering on sloth, remains the hallmark of our investment process.”
<h3 style="margin: 2em 0px 0px; padding: 0px; font-family: Helvetica,Verdana,Arial,sans-serif; font-size: 1.2em; font-weight: bold; color: #333333;">Why We Should Do Less With our Investments</h3>
In his book <a href="http://www.amazon.com/Investing-Simpler-Second-Focus-Investor/dp/0976657457">Wise Investing Made Simpler</a> Larry Swedroe makes a similar point using a study conducted by a trio of academics. Edwin J. Elton and Martin J. Gruber of New York University, and Christopher R. Blake of Fordham University, examined 43 401(k) plans from 1994 through 1999.
Over those five years, the 401(k) plans added 215 new fund options for participants and dropped 45 funds from their plans. The funds added had a strong track record. Those that were dropped had poor recent performance.
The professors soon discovered that the new funds promptly underperformed those that had been given the heave-ho.
That brought the overall quality of the offerings down. Making matters worse, participants in the plans constantly chased performance by shifting money into last quarter's top performers, the study notes.
<h3 style="margin: 2em 0px 0px; padding: 0px; font-family: Helvetica,Verdana,Arial,sans-serif; font-size: 1.2em; font-weight: bold; color: #333333;">Give Your Money A Chance To Grow</h3>
The argument Richards, Swedroe, and others make is simple. Having put thought and effort into setting up their investments, investors need to give them a chance to grow. That doesn't mean you can't appreciate their beauty and even check in on their performance now and again, but successful long-term investing requires patience.
If you have ideas for setting the right balance between enlightened remove and dangerous neglect, <a href="http://portfolioist.com/2011/03/28/relax-arguments-for-doing-less-with-your-investments/">chime in</a>.
 
 
Symbols:<a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol= SPY&amp;count=001'> SPY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VTI&amp;count=0099'>VTI</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00107'>IYR</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VNQ&amp;count=00104'>VNQ</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=ICF&amp;count=0088'>ICF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=AGG&amp;count=00141'>AGG</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BND&amp;count=00151'>BND</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=DBC&amp;count=0098'>DBC</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IVV&amp;count=0048'>IVV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IYY&amp;count=0040'>IYY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWV&amp;count=0045'>IWV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VV&amp;count=0040'>VV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=DLN&amp;count=0042'>DLN</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=RSP&amp;count=0044'>RSP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SCHX&amp;count=0040'>SCHX</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CLY&amp;count=006'>CLY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0067'>LQD</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BLV&amp;count=0010'>BLV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VCLT&amp;count=008'>VCLT</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol= DGL&amp;count=001'> DGL</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IAU&amp;count=004'>IAU</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=DBG&amp;count=003'>DBG</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=AGOL&amp;count=003'>AGOL</a>
<div class="sidebar_box_content">(SPY), (VTI), (IYR), (VNQ), (ICF), (AGG), (BND), (DBC), (IVV), (IYY), (IWV), (VV), (DLN), (RSP), (SCHX), (CLY), (LQD), (BLV), (VCLT),  (DGL), (IAU), (DBG), (AGOL)</div>
 
 
</div>
 
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AGOL

iShares Trusthen & Steers Realty Majors Index Fund

iShares Trust Dow Jones US Real Estate Fund Index

VCLT

Relax: Doing Less With Your Investments

<a href="http://portfolioist.com/2011/03/25/will-harry-brownes-permanent-portfolio-continue-to-work/">Portfolioist Article </a>March 25, 2011 by <a href="http://portfolioist.com/author/geoffc1/">Geoff Considine</a>
<div class="entry" style="margin: 0px; padding: 0px; overflow: hidden;">
I just published an article over at Advisor Perspectives that is titled <a href="http://www.advisorperspectives.com/newsletters11/What_Investors_Should_Fear_in_the_Permanent_Portfolio.php">“What Investors Should Fear in The Permanent Portfolio”</a> that looks at a very simple model portfolio proposed by Harry Browne.  This portfolio contains equal allocations to four elements: stocks, gold, long-term government bonds and cash.  Back in 1998 when Browne first proposed this portfolio in his book, <a href="http://www.amazon.com/Fail-Safe-Investing-Lifelong-Financial-Security/dp/031226321X/ref=sr_1_1">Fail Safe Investing</a>, it was decidedly harder to create your own version of this allocation model.  Today, you can easily implement this portfolio at fairly low cost using four ETFs. 
Harry Browne's <a href="http://portfolioist.com/2010/08/27/bernstein-bogleheads-and-the-permanent-portfolio/">Permanent Portfolio</a> has gotten a great deal of attention–and many new advocates–due to its solid performance in recent years when more traditional asset allocations suffered substantial losses.  However, the question that investors need to ask is whether this will be a successful way to invest in the future. 
I am not going to go through all of the analysis–but I will present three brief highlights here: 1) There is no question that the simple asset allocation in the Permanent Portfolio has done very well in the last decade and more.
2) The reliance on long-term bonds and gold has led to great performance but yields on long bonds are near historic lows and gold is near historic highs.
3) The Permanent Portfolio is not likely to fare well in a rising interest rate environment.
Ultimately, my conclusion is quite similar to that reached by William Bernstein, when he looked at this deceptively simple asset allocation.  The statistics suggest that the Permanent Portfolio does indeed capture elements that will do well in a wide variety of market conditions.  The danger for investors is piling into this strategy after a period that has been almost optimal for this approach vs. more conventional asset allocations.  For many of the latecomers to the Permanent Portfolio, there is a substantial risk that they are chasing performance and are thus setting themselves up for much lower future returns.
<span class="Apple-style-span" style="border-collapse: separate; color: #000000; font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;">
Symbols:<a href ='../../../../LTISystem/f401k_symbols.action?symbol= SPY&amp;count=001'> SPY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VTI&amp;count=0096'>VTI</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00105'>IYR</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VNQ&amp;count=00102'>VNQ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=ICF&amp;count=0086'>ICF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=AGG&amp;count=00139'>AGG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BND&amp;count=00149'>BND</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBC&amp;count=0096'>DBC</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IVV&amp;count=0046'>IVV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYY&amp;count=0038'>IYY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWV&amp;count=0043'>IWV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VV&amp;count=0038'>VV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DLN&amp;count=0040'>DLN</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RSP&amp;count=0042'>RSP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SCHX&amp;count=0038'>SCHX</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CLY&amp;count=004'>CLY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0065'>LQD</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BLV&amp;count=008'>BLV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VCLT&amp;count=006'>VCLT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol= DGL&amp;count=001'> DGL</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IAU&amp;count=002'>IAU</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBG&amp;count=001'>DBG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=AGOL&amp;count=001'>AGOL</a>,
<span class="Apple-style-span" style="border-collapse: separate; color: #000000; font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;">Exchange Symbols:<span class="Apple-style-span" style="border-collapse: separate; color: #000000; font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;">
<div class="sidebar_box_content">(NYSE: SPY), (NYSE: VTI), (NYSE: IYR), (NYSE: VNQ), (NYSE: ICF), (NYSE: AGG), (NYSE: BND), (NYSE: DBC), (NYSE: IVV), (NYSE: IYY), (NYSE: IWV), (NYSE: VV), (NYSE: DLN), (NYSE: RSP), (NYSE: SCHX), (NYSE: CLY), (NYSE: LQD), (NYSE: BLV), (NYSE:VCLT),  (NYSE: DGL), (NYSE: IAU), (NYSE: DBG), (NYSE: AGOL)</div>


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Will Harry Browne's Permanent Portfolio Continue To Work?

streetTRACKS Dow Jones U.S. Small Cap Value Index Fund

iShares S&P SmallCap 600 Value Index Fund

iShares Morningstar Small Value Index Fund

LSVEX

PTTRX

PowerShares Exchange Traded Fund Trust Dynamic Small Cap Value Portfolio

Rydex ETF Trust S&P Smallcap 600 Pure Value ETF

Accenture 401K Retirement Plan: High Quality and Low Cost Funds with Proper Diversification

Amazon.com (Ticker: AMZN) is the largest online book and goods seller. It was founded in 1994 and is headquartered in Seattle, Washington. It pioneered in online ecommerce and has been very successful in its aggressive business expansion. When it comes to its retirement plan investment choices, however, it provides a somewhat U.S. centric and old style plan.
The <a rel="nofollow">Amazon.com 401K Plan</a> consists of 12 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income. This is a very conventional retirement plan that has been clearly U.S. and developed countries centric.
<table style="width: 50%;" border="0">
<thead>
<tr>
<th align="left">Asset Class</th>
<th align="left">Ticker</th>
<th align="left">Name</th>
</tr>
</thead>
<tbody>
<tr>
<td width="40%">LARGE GROWTH</td>
<td width="20%">RGAEX</td>
<td width="40%">American Funds Growth Fund of Amer R4</td>
</tr>
<tr>
<td width="40%">LARGE BLEND</td>
<td width="20%">VFINX</td>
<td width="40%">Vanguard 500 Index Investor</td>
</tr>
<tr>
<td width="40%">LARGE GROWTH</td>
<td width="20%">VFTSX</td>
<td width="40%">Vanguard FTSE Social Index Inv</td>
</tr>
<tr>
<td width="40%">LARGE VALUE</td>
<td width="20%">VWNFX</td>
<td width="40%">Vanguard Windsor II</td>
</tr>
<tr>
<td width="40%">MID-CAP BLEND</td>
<td width="20%">VSEQX</td>
<td width="40%">Vanguard Strategic Equity</td>
</tr>
<tr>
<td width="40%">SMALL VALUE</td>
<td width="20%">AVPAX</td>
<td width="40%">American Beacon Small Cp Val Plan</td>
</tr>
<tr>
<td width="40%">Small Growth</td>
<td width="20%">VEXPX</td>
<td width="40%">Vanguard Explorer</td>
</tr>
<tr>
<td width="40%">Foreign Large Blend</td>
<td width="20%">JIEIX</td>
<td width="40%">Artio International Equity I</td>
</tr>
<tr>
<td width="40%">Intermediate-Term Bond</td>
<td width="20%">PTTRX</td>
<td width="40%">PIMCO Total Return Instl</td>
</tr>
<tr>
<td width="40%">Retirement Income</td>
<td width="20%">VTINX</td>
<td width="40%">Vanguard Target Retirement Income</td>
</tr>
<tr>
<td width="40%">US EQUITY</td>
<td width="20%">AMZN</td>
<td width="40%">Amazoncom Inc</td>
</tr>
<tr>
<td width="40%">Money Market</td>
<td width="20%"></td>
<td width="40%"> </td>
</tr>
</tbody>
</table>
 
The list of minor asset classes covered: Foreign Large Blend: EFA, VEU, GWL, PFA Intermediate-term Bond: AGG, CIU, BIV, BND Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX Large Growth: IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG Large Value: IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV Retirement Income: Small Growth: IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK Small Value: IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT Us Equity: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
<table border="0">
<thead>
<tr>
<th align="left">Asset Class</th>
<th>Number of funds</th>
</tr>
</thead>
<tbody>
<tr>
<td>REITs</td>
<td>0</td>
</tr>
<tr>
<td>Balanced Fund</td>
<td>1</td>
</tr>
<tr>
<td>Fixed Income</td>
<td>1</td>
</tr>
<tr>
<td>Commodity</td>
<td>0</td>
</tr>
<tr>
<td>Sector Fund</td>
<td>0</td>
</tr>
<tr>
<td>Foreign Equity</td>
<td>1</td>
</tr>
<tr>
<td>Emerging Market Equity</td>
<td>0</td>
</tr>
<tr>
<td>US Equity</td>
<td>8</td>
</tr>
<tr>
<td>Other</td>
<td>9</td>
</tr>
<tr>
<td>Total</td>
<td>12</td>
</tr>
</tbody>
</table>
As of Mar 21, 2011, this plan investment choice is rated as below average based on MyPlanIQ <a rel="nofollow">Plan Rating methodology </a> that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings:
Diversification -- Rated as average (43%) Fund Quality -- Rated as below average (19%) Portfolio Building -- Rated as average (38%) Overall Rating: 		below average (34%)
Since Amazon.com was founded in 1994, the world has gone through dramatic changes. Globalization has enabled countries like China, India and Brazil to emerge as strong economic powers in the world, partly due to the rapid development in internet and communication. Ironically, Amazon.com, while being aggressive to pursue its cutting edge business practice and technology, has provided its employees a very traditional retirement plan that lacks of other major asset exposure including emerging market stocks and real estate investments (REITs). This is reflected in the performance of the following model portfolios that adopt asset allocation strategies: strategic and tactical asset allocation strategies (<a rel="nofollow">SAA </a>and <a rel="nofollow">TAA </a>for participants in Amazon.com 401K Plan).
Strategic Asset Allocation is based on well known modern portfolio theory and its key features include: diversification, proper fund selection and periodically re-balancing.
Tactical Asset Allocation works on a diversified array of assets provided by funds in a plan and adjusts asset mixes based on market conditions such as asset price momentum utilized by TAA.
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies. For comparison purpose, we also include the moderate model portfolios of a typical 3 asset <a rel="nofollow">SIB (Simpler Is Better) plan </a>. This SIB plan has the following candidate index funds and their ETFs equivalent:
US Equity: SPY or VTI Foreign Equity: EFA or VEU Fixed Income: AGG or BND Performance chart (as of Mar 21, 2011)
<a rel="lightbox"> </a>
<a rel="lightbox" href="../LTISystem/article_viewchart.action?portfolioID=17111,17117,31628,31631"> <img style="margin: 6px;" title="chart" src="http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=17111,17117,31628,31631" alt="chart" /></a><a rel="lightbox" href="../LTISystem/article_viewchart.action?portfolioID=17111,17117,31628,31631"> </a>
Performance table (as of Mar 21, 2011)
<div id="show_Port_div" style="display: block;">
<table id="comparetablePort" class="tablesorter" style="width: 100%;" border="0" cellspacing="1" cellpadding="0">
<thead>
<tr>
<th class="header" width="40%">Portfolio Name</th>
<th class="header" width="10%">1Yr AR</th>
<th class="header" width="10%">1Yr Sharpe</th>
<th class="header" width="10%">3Yr AR</th>
<th class="header" width="10%">3Yr Sharpe</th>
<th class="header" width="10%">5Yr AR </th>
<th class="header" width="10%">5Yr Sharpe</th>
</tr>
</thead>
<tbody>
<tr>
<td><a> Amazon.com 401K Plan Tactical Asset Allocation Moderate</a></td>
<td>4%</td>
<td>32%</td>
<td>7%</td>
<td>70%</td>
<td>8%</td>
<td>70%</td>
</tr>
<tr>
<td><a> Amazon.com 401K Plan Strategic Asset Allocation Moderate</a></td>
<td>7%</td>
<td>60%</td>
<td>4%</td>
<td>26%</td>
<td>5%</td>
<td>30%</td>
</tr>
<tr>
<td><a> Three Core Asset ETF Benchmark Tactical Asset Allocation Moderate</a></td>
<td>-2%</td>
<td>-32%</td>
<td>2%</td>
<td>16%</td>
<td>4%</td>
<td>28%</td>
</tr>
<tr>
<td><a> Three Core Asset ETF Benchmark Strategic Asset Allocation Moderate</a></td>
<td>11%</td>
<td>69%</td>
<td>4%</td>
<td>13%</td>
<td>4%</td>
<td>14%</td>
</tr>
</tbody>
</table>
</div>
Currently Commodities, Real Estate and US Equity are doing well. Only US Equity is available to Amazon.com 401K Plan participants.
This plan beats the three asset benchmark by virtue of the US asset class choices. If would be a stronger plan with more fixed income choices and an additional asset class.
To summarize, Amazon.com 401K Plan would do well by their employees to consider reviewing their existing funds and adding additional asset classes such as REITs and emerging market stocks.
Symbols:<a href ='../../../../LTISystem/f401k_symbols.action?symbol=AMZN&amp;count=002'>AMZN</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SPY&amp;count=00127'>SPY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VTI&amp;count=0091'>VTI</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EFA&amp;count=00142'>EFA</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VEU&amp;count=00124'>VEU</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=AGG&amp;count=00134'>AGG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BND&amp;count=00144'>BND</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IVV&amp;count=0044'>IVV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYY&amp;count=0036'>IYY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWV&amp;count=0041'>IWV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VV&amp;count=0036'>VV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DLN&amp;count=0038'>DLN</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RSP&amp;count=0040'>RSP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SCHX&amp;count=0036'>SCHX</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CIU&amp;count=00104'>CIU</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BIV&amp;count=0045'>BIV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=GWL&amp;count=0038'>GWL</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PFA&amp;count=0035'>PFA</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IVE&amp;count=0035'>IVE</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWW&amp;count=0032'>IWW</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=JKF&amp;count=0025'>JKF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VTV&amp;count=0037'>VTV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=ELV&amp;count=0024'>ELV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PWV&amp;count=0025'>PWV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RPV&amp;count=0025'>RPV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SCHV&amp;count=0027'>SCHV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IVW&amp;count=0040'>IVW</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWZ&amp;count=0032'>IWZ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=JKE&amp;count=0029'>JKE</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VUG&amp;count=0041'>VUG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=ELG&amp;count=0028'>ELG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=QQQQ&amp;count=0081'>QQQQ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RPG&amp;count=0029'>RPG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SCHG&amp;count=0031'>SCHG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IJH&amp;count=0026'>IJH</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWR&amp;count=0026'>IWR</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=JKG&amp;count=0017'>JKG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VO&amp;count=0026'>VO</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=MDY&amp;count=0072'>MDY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EMM&amp;count=0020'>EMM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PJG&amp;count=0017'>PJG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DON&amp;count=0020'>DON</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EZM&amp;count=0020'>EZM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=MVV&amp;count=0016'>MVV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IJS&amp;count=0022'>IJS</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWN&amp;count=0022'>IWN</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=JKL&amp;count=0013'>JKL</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VBR&amp;count=0021'>VBR</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DSV&amp;count=0014'>DSV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PWY&amp;count=0013'>PWY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RZV&amp;count=0013'>RZV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=UVT&amp;count=0013'>UVT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IJT&amp;count=0019'>IJT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWO&amp;count=0020'>IWO</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=JKK&amp;count=0013'>JKK</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VBK&amp;count=0024'>VBK</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DSG&amp;count=0013'>DSG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PWT&amp;count=0011'>PWT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RZG&amp;count=0010'>RZG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=UKK&amp;count=0010'>UKK</a>,
Exchange Tickers:(AMZN),(SPY),(VTI),(EFA),(VEU),(AGG),(BND),(IVV),(IYY),(IWV),(VV),(DLN),(RSP),(SCHX),(CIU),(BIV),(GWL),(PFA),(IVE),(IWW),(JKF),(VTV),(ELV),(PWV),(RPV),(SCHV),(IVW),(IWZ),(JKE),(VUG),(ELG),(QQQQ),(RPG),(SCHG),(IJH),(IWR),(JKG),(VO),(MDY),(EMM),(PJG),(DON),(EZM),(MVV),(IJS),(IWN),(JKL),(VBR),(DSV),(PWY),(RZV),(UVT),(IJT),(IWO),(JKK),(VBK),(DSG),(PWT),(RZG),(UKK)
Disclosure:
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
 
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AMZN

Online Pioneer Amazon.com Can Expand Its 401K Plan for More Diversification

Aging boomers highlight the major retirement crisis as they come to the end of their working careers. They don't have enough money. There is no money to bail out retirement – it's already been spent on salvaging the economy for the working. This is one of the first generations for whom their retirement is based on what they have with little assistance from Social Security. Henceforth, the bleak reality is that this will apply to everybody.
 It is going to be up to the individual to make the most of what they have. We will have to accept less or work longer or achieve better returns from their investments.
 We are exploring a range of different portfolios looking for ideas to help improve returns for retirement investors. We believe that it is vital for the individual to be more involved with their retirement investing to see better results. These articles are intended to help build the foundational understanding that will enable better returns, lower risk and less angst in our lives.
 The Harry Browne Permanent Portfolio has defied conventional thinking with a lazy portfolio of four assets, Cash, Gold, US Equities and Long term treasury bonds. This is a three asset class portfolio with two fixed income assets (50%) of the portfolio with US Equities and Gold -- being a specialized type of commodity.
<ul>
<li>25% in U.S. stocks, to provide a strong return during times of prosperity. For this portion of the portfolio, Browne recommends a basic S&amp;P 500 index fund such as <a href="http://www.google.com/finance?client=ob&amp;q=MUTF:VFINX">VFINX</a> or <a href="http://www.google.com/finance?q=MUTF%3AFSMKX">FSKMX</a>.(VTI, SPY) </li>
<li>25% in long-term U.S. Treasury bonds, which do well during prosperity and during deflation (but which do poorly during other economic cycles).(LQD)</li>
<li>25% in cash in order to hedge against periods of “tight money” or recession. In this case, “cash” means a <a href="http://www.money-rates.com/BasicGuides/MoneyMarket/MMA_versus_MoneyMarketFunds.htm">money-market fund</a>. (Note that our current recession is abnormal because money actually isn't tight — interest rates are very low.)</li>
<li>25% in precious metals (gold, specifically) in order to provide protection during periods of inflation. Browne recommends gold bullion coins.(GLD) </li>
</ul>
<div class="sidebar_box_noPadding roundHeadingBlue"></div>
<div class="sidebar_box_noPadding roundHeadingBlue">Annualized Return</div>
<div class="sidebar_box_noPadding roundHeadingBlue">
<div class="sidebar_box_noPadding roundHeadingBlue">
<div class="sidebar_box_content">
<table style="background-color: #ffffff; width: 50%;" border="0" cellspacing="1" cellpadding="0">
<tbody>
<tr bgcolor="#ffffff">
<td style="text-align: center;">
<h3>Name</h3>
</td>
<td width="90" align="center">
<h3>Last 1 Year</h3>
</td>
<td width="90" align="center">
<h3>Last 3 Years</h3>
</td>
<td width="90" align="center">
<h3>Last 5 Years</h3>
</td>
</tr>
<tr class="vf_even">
<td height="30"><a href="../LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17551&amp;type=4" target="_blank">Harry Browne Permanent Portfolio</a></td>
<td style="text-align: center;" height="30">11%</td>
<td style="text-align: center;" height="30">6%</td>
<td style="text-align: center;" height="30">8%</td>
</tr>
<tr class="vf_odd">
<td height="30"><a href="../LTISystem/jsp/fundcenter/View.action?symbol=vfinx&amp;type=4" target="_blank">VFINX (Vanguard (S&amp;P 500) Index)</a></td>
<td style="text-align: center;" height="30">13%</td>
<td style="text-align: center;" height="30">0%</td>
<td style="text-align: center;" height="30">0%</td>
</tr>
<tr class="vf_even">
<td height="30"><a href="../LTISystem/jsp/fundcenter/View.action?symbol=vbinx&amp;type=4" target="_blank">VBINX (Vanguard Balance (60% stocks/40% bonds)</a></td>
<td style="text-align: center;" height="30">10%</td>
<td style="text-align: center;" height="30">2%</td>
<td style="text-align: center;" height="30">2%</td>
</tr>
</tbody>
</table>
</div>
</div>
</div>
<div class="sidebar_box_noPadding roundHeadingBlue">
<div class="sidebar_box_content"></div>
</div>
<div class="sidebar_box_noPadding roundHeadingBlue">
<div class="sidebar_box_heading_white"> Historical Portfolio Chart</div>
<div class="sidebar_box_content"><img src="http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=17551&amp;securityID=1144,91&amp;width=680&amp;height=500&amp;Type=0" alt="" width="595" height="437" /> 
 The first thing to note is that the portfolio is very stable. It has similar properties to a tactical asset allocation in the sense that it resists taking losses very well. Just about every lazy portfolio has the same unpleasant V in the 2009 timeframe and the Browne permanent is about the only one that avoids this. The combination of gold, cash, long term treasury and US equities turned out to be the perfect hedge against the downturn. 
 And even after the downturn, gold and US equities have performed very well even until today where Gold and US are second and third on the rank of major asset classes.
 We now compare the returns of the original portfolio compared with the same funds being deployed with strategic and tactical asset allocation strateties. 
<ul>
<li>SAA keeps all the funds in the portfolio but moves assets between cash and treasury bonds -- so that the fixed income may all be treasury bonds or equally split with cash or all cash.</li>
<li>TAA will do the same as SAA but can also move all the risk assets into cash or bonds</li>
</ul>

<div id="show_Port_div" style="display: block;">
<h3>Portfolio Performance Comparison</h3>
<table id="comparetablePort" class="tablesorter" style="width: 100%;" border="0" cellspacing="1" cellpadding="0">
<colgroup><col style="width: 359px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /><col style="width: 82px;" /></colgroup>
<thead>
<tr>
<th class="header" width="40%">Portfolio Name</th>
<th class="header" width="10%">1Yr AR</th>
<th class="header" width="10%">1Yr Sharpe</th>
<th class="header" width="10%">3Yr AR</th>
<th class="header" width="10%">3Yr Sharpe</th>
<th class="header" width="10%">5Yr AR </th>
<th class="header" width="10%">5Yr Sharpe</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17551">Harry Browne Permanent Portfolio</a></td>
<td>11%</td>
<td>168%</td>
<td>6%</td>
<td>61%</td>
<td>8%</td>
<td>81%</td>
</tr>
<tr class="odd">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17707">Harry Browne Permanent Portfolio Plan Strategic Asset Allocation Moderate</a></td>
<td>12%</td>
<td>164%</td>
<td>7%</td>
<td>56%</td>
<td>9%</td>
<td>76%</td>
</tr>
<tr class="even">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17701">Harry Browne Permanent Portfolio Plan Tactical Asset Allocation Moderate</a></td>
<td>10%</td>
<td>140%</td>
<td>2%</td>
<td>20%</td>
<td>5%</td>
<td>50%</td>
</tr>
</tbody>
</table>
</div>
 We would expect the Tactical Asset Allocation strategy to struggle. With only three asset classes, there is nowhere to hide in terms of hedging and doesn't do well until the last couple of months when it catches up with the original. Both the SAA and TAA portfolios only have 40% in fixed income as opposed to the original that has 50% so the SAA and TAA are more aggressively positioned in risk equities.
 In the middle of 2010 when US equities corrected, the SAA dropped significantly while the TAA and Browne original plans use different approaches to minimize downside. As we entered 2011, the fixed long term treasuries weighed on the Browne Original where TAA and SAA rotated them out into cash and let the risk assets pull them up.
 Despite this, the Browne portfolio charts an uncannily even path through volatile waters and delivers reasonable returns with little effort and volatility. We can see benefits from being able to rotate subclasses in but at the cost of some volatility and extra trading that some would think unwelcome.
 In a future article we will add consider adding an extra asset class to see if that would enable us to get better returns without sacrificing volatilty.
 <span class="Apple-style-span" style="border-collapse: separate; color: #000000; font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;">
Disclosure:
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols (NYSE: SPY), (NYSE: VTI), (NYSE: IYR), (NYSE: VNQ), (NYSE: ICF), (NYSE: AGG), (NYSE: BND), (NYSE: DBC), (NYSE: IVV), (NYSE: IYY), (NYSE: IWV), (NYSE: VV), (NYSE: DLN), (NYSE: RSP), (NYSE: SCHX), (NYSE: CLY), (NYSE: LQD), (NYSE: BLV), (NYSE:VCLT),  (NYSE: DGL), (NYSE: IAU), (NYSE: DBG), (NYSE: AGOL)
 <a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/FullChart.action?ID=17,551&amp;name=Harry%20Browne%20Permanent%20Portfolio&amp;includeHeader=false" target="_blank"></a> </div>
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Gold, US Equities, Long Term Treasuries and Cash Make For an Uncanny Portfolio

Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>), the largest U.S. discount broker, has made its presence felt in the <a href="http://marketbulletin.com/etf.php">ETF</a> arena in a short amount of time, garnering $3.5 billion in assets under management since entering the game in November 2009. That total is likely helped by the fact that Schwab fired one of the first shots in the ETF price war by offerings its clients commission-free trades on Schwab ETFs.

The firm published its "ETF Select List" on Wednesday, a grouping of what Schwab deems to be the best ETFs across 48 different asset classes. 

To be included on the "ETF Select List, an ETF must meet certain minimum requirements for criteria such as assets under management, length of track record, trading volume, bid-ask spread, tracking errorof the ETF to its underlying index, and number of competitive market makers," Schwab said in its report.

One criticism of the Schwab ETF Select List would be that 11 of the 13 ETFs the firm issues appear across the various rankngs, though it should be noted Schwab said no one issuer could make up a third of the list, which includes nearly 50 ETFs and at least Schwab does make good on that stipulation.

Along those lines, there are plenty of SPDRs, iShares and Vanguard ETFs on the list as well along with a couple of PowerShares offerings.

Funds to garner the top rankings include the Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) U.S. equity category and the Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>) in the international equity category. The Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>) was the top bond ETF on the list while the sector rankings were dominated by various SPDR ETFs.

A Look At Schwab's ETF Select List

Long time reader WH made an interesting comment yesterday in response to the idea in <a href="http://randomroger.blogspot.com/2011/02/friday-randoms.html">yesterday's post</a> about the extent to which low savings rates and overspending are obstacles to financial plan success. He noted from the Felix Salmon article I linked to that Felix said that whatever the market does in your investing career you will probably do a little worse. WH noted the extent to which various fees and expenses associated with investing could be the biggest impediment to success. 
This sort of inefficient investing is certainly a huge obstacle but I don't think it is the biggest thing getting in the way of success. Intuitively, living a $100,000 lifestyle on $50,000 portfolio and repeated panic selling would seem to be more harmful.
Disirregardless (hat tip to my buddy Mikey who just became a father for the fourth time) of whether inefficiency is the biggest impediment or not, we all can benefit from a little more efficiency. One way to do this is the various free ETF trading programs that now exist. TD Ameritrade has about 100 ETFs, Fidelity has now 30 iShares funds that can be traded for free, Vanguard ETFs can be traded for free at Vanguard and Schwab ETFs can be traded for free at Schwab.
Below is the list of Schwab ETFs, there will probably be more than you think;
Schwab US TIPS ETF (SCHP) Schwab Short Term US Treasury ETF (SCHO) Schwab Intermediate US Treasury ETF (SCHR) Schwab US Broad Market ETF (<a class="ticker" href="/stock/schb#">SCHB</a>) Schwab US Large Cap ETF (<a class="ticker" href="/stock/schx#">SCHX</a>) Schwab US Large Cap Growth ETF (SCHG) Schwab US Large Cap Value ETF (<a class="ticker" href="/stock/schv#">SCHV</a>) Schwab US Mid Cap ETF (SCHM) Schwab US Small Cap ETF (<a class="ticker" href="/stock/schb#">SCHB</a>) Schwab US REIT ETF (SCHH) Schwab International Equity ETF (<a class="ticker" href="/stock/schf#">SCHF</a>) Schwab International Small Cap Equity ETF (SCHC) Schwab Emerging Markets ETF (SCHE)
Clients below a certain size own SCHB and SCHA and that is the point. Below a certain size it becomes even more important to minimize the number $8-$10 commissions. The Schwab roster of ETFs covers a lot of asset class ground. Someone with less than $50,000 could build the majority of their portfolio from that list and then add three or four things for narrower exposure and only have a commission drag of $36. Obviously this would be mostly a broad based portfolio but that is just fine for someone who would rather not spend a ton of time on this. The investor I have in mind might want to layer on one country fund, something like gold and maybe one stock they feel comfortable with. This seems pretty realistic to me, especially if they can be diligent savers, they can DCA in to these funds.
While the Schwab program is a more overt asset grab the TD Ameritrade program goes farther in terms of actually helping people (make no mistake, it is in asset grab too) by including quite a few iShares single country funds in its list of 101 ETFs. I would note that the expense ratio in the Schwab funds is lower than most of the funds in the Ameritrade program. Again though the program helps increase efficiency WRT to fees which becomes more important the smaller the accounts get and people just starting out will usually have smaller accounts, but now can get pretty good asset class diversification.
I should clarify one thing from the above paragraph. Spending $300 to implement a $1 million portfolio is not really an issue IMO but that would be a colossal drag on a $55,000 portfolio.
True to yesterday's post maybe today's post can count toward spreading the gospel to people who come to you for this sort of advice. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8532070-6093908407802152336?l=randomroger.blogspot.com' alt='' /></div>


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