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Index Funds Book
Index Funds: The 12-Step Program for Active Investors (Hardcover)

by Mark T Hebner
ISBN: 0-9768023-0-9




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Videos
Harry M. Markowitz explains Portfolio Theory: what it is and how it's used from a top-down model from the asset classes to the investments. He covers Standard Deviation, Variance, Correlation, and Covariance. Markowitz also explains what happened in 2008 with Modern Portfolio Theory. (39 Min.)

Harry M. Markowitz - Portfolio Theory and 2008

Mark covers historic recovery patterns and probability of future returns, the risks and returns that come with big government, the role of commodities in your investments, the pros and cons of inflation-hedging securities, and an investment strategy that has been highly successful historically. (92 Min.)

Mark T. Hebner - Big Losses, Big Government and Your Investments

Harry Markowitz gives an IFA Exclusive Presentation on Portfolio Theory Vs. Financial Engineering, and Their Roles in Financial Crises. Markowitz explains the difference between Portfolio Theory and Financial Engineering. Markowitz also covers Black Monday (October 19, 1987), Long Term Capital Management, and Now. (47 Min.)

Harry Markowitz - Portfolio Theory Vs. Financial Engineering, and Their Roles in Financial Crises

The first step on the index funds journey is to recognize active investor behavior. If all investors were lined up in a row, could the active investors be identified? Active investors actively engage in stock picking, time picking (market timing), manager picking, and style picking.

Step 1: Active Investors - Podcast Interview with Mark Hebner

Mark Hebner explains the Nobel Laureates. Mark suggests a higher power of non-biased information from academics who carefully analyze data and have that data peer reviewed before it is published. Mark identifies the five basic concepts of the Modern Portfolio Theory.

Step 2: Nobel Laureates - Podcast Interview with Mark Hebner

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Index Your Way to Investment Success

IndexFunds.com Staff
Friday, January 01, 1999

Among indexing books, Index your Way to Investment Success has the most comprehensive description of how to build an investment plan. It presents a simple investment strategy and then describes ways to enhance the strategy in hopes of higher return.

The authors start off with the obligatory ode to the advantages of index funds. They also include some interesting passages about the early history of passive investing and the derision with which the early indexing proponents were met.

Next, the book looks at the indexes tracked by index funds and gives a thorough description of how they work and how index funds are run. An analysis of the cost advantage of index funds is then presented which includes operating expenses, transaction costs, sales loads, and taxes. From this exercise, the authors devise what they call the "rule of 1-2-3":

 
"In order to equal the return of the benchmark index fund, the actively managed mutual fund must invest in issues that average a significantly higher annual rate of return: about 1% for bonds, 2% for large-cap stocks, and 3% for [mid- and small]-cap stocks." (p. 129)

 


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