Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, October 24, 2016. You can also find the re-balance calendar for 2016 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Stock Investing: Actively Managed Funds vs. Index Funds

In previous newsletter August 8, 2016: Portfolio Construction Using Stock ETFs And Bond Mutual Funds, we advocate a mixed ETF and mutual fund investment portfolio that uses low cost index ETFs for stock (equity) assets and uses actively managed total return bond funds for fixed income (bond) asset. It drew some questions from several readers. In this newsletter and a follow up one, we will discuss the rationale behind choosing index funds or active funds for stocks and bonds. 

For stock asset classes including US stocks, international stocks, emerging market stocks and REITs, in principle, we prefer using low cost index funds (ETFs or mutual funds). 

Active stock funds rarely outperform index funds consistently

Though it’s been a popular and hotly debated topic on the value of active stock funds, the very first common sense and experience tell us that there have been way too many great stock funds that suffered from sudden downward performance. SEQUX (Sequoia) is one of the recent examples. The following table shows some of recent ‘disgraceful’ funds: 

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