Monday, July 10, 2006

Ben Stein's Money

Ben Stein has an article in Barron's Mutual Funds Quarterly that caught my eye. Here's an excerpt:

"We'd change the allocation little by little, as sectors become too expensive or get cheap. Our approach takes advantage of the fact that over long periods (very long periods, to be sure), indexes beat all but the very best and rarest stockpickers.

Adding to our potential to do well: The costs of holding these exchange-traded funds and high-paying utility stocks and real-estate investment trusts would be very low. Except for the tax on the income from the utilities and REITs, it would be extremely tax-efficient (and we'd probably offer a version without the high current income, too)."

Read the rest (I think a subscription is required)

That should sound familiar to our clients. An all asset, index fund approach is simple, cheap and effective. It's nice to see smart guys like Ben Stein validate our approach.

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