Fund Insider

Ten ETF Trends for the Next Ten Years

401k using ETF is a simple matter of having firms like etrade or schwab get into the 401k plan administration market. Mutual fund firms established infrastructure to meet govt and employer needs long ago, pre-ETF days, and that infrastructure doesn't include executing stock trades, just mutual funds. If brokers make the same investment, so you can trade in your 401k, then the question will be whether employers and the govt, want to allow trading any stocks or limit to just a list of ETFs. Of course we all want flexibility, but some think the 401k is sacred and we should be protected from our own stupidity with rules and restrictions.
Hard to predict how & when govt policy based issues will be decided, could be 10 years, could be never....

Very Long-Term Asset Allocation Results

If you have an account at Vanguard, they not only give you above numbers, but will tell you exactly how your portfolio would fall into the above chart. This includes non-vanguard funds too.

Some Graham and Dodd Type Thoughts on Stocks vs. Bonds

I don't know how any professional investor can talk about dividends as having anything to do with the merits of one stock over another. Companies are not obligated to pay dividends, and when they fall on hard times, they cut the dividend. Stocks are not bonds, bond issuers have to default, a very serious step, compared to cutting a dividend. Stocks are NOT tips. If true that the real return is same as TIPS, nobody should buy any stocks at all, as you have more risk with no commensurate reward. Your entire analysis is based on the false views of dividends being like bond coupons, and pure index buy and hold equity investing returns (not even asset allocation trades).

I really want to believe you, so I can move all my stocks to TIPS
and sleep better at night, knowing I'll get the same return with less risk, but I don't think this is even close to true.

Key Asset Categories vs. Cash

So what is the conclusion from this data ?

Also, Junk behind cash ? Where did you get this data ?
My junk fund is way up.

Stock vs. Bond Performance

Long term historical data, while not something to be ignored, is not something that should be the major factor in your investment decision making.
1) Do you really care about 100 years stats ? Are you investing
for the likely outcome in 100 years ?
2) Technology has changed the world forever. The pace of information transmittal, and the pace of wealth creation/destruction is much faster than even 20 years ago, much less 100.
3) And yes, regulations are not perfect now, but they are DIFFERENT, no disputing that. Anyone ever read about Teddy Roosevelt and the trusting legislation ? There were a handful of huge companies controlling most industry 100 years ago, and otherwise small family businesses/farms for less mature industries.
Now there are many small/med/large/gigantic global companies competing in many more industries. Far more competition than ever before.
4) The bond market in particular, has a very fast pace of innovation.
30 years ago came the first mortgage backed securities. 20 years ago the first "junk" bonds. More recently CDO/CLO/CMO/ABS/CDS
and the list will continue to grow. I can't believe that the relatively simple bond market of 100 years ago has ANYTHING to do with the bond market today. People actually "clipped coupons" (paper) to get their interest payments 100 years ago (even 30 years ago).

I think you need to consider human nature and the fact that the world is a cyclical place. Whatever is doing well, is soon overdone, overbought, and don't be the last guy in. If you buy Treasury bonds now, you are the last man in. If you buy junk, you have to know when to get out. I happen to agree junk and corporates in general are a good place to be now, but I will reconsider that decision once others come to the same conclusion, and take the profits. Diversification with some recognition that you don't need to own everything to be diversified, diversify amongst the reasonably priced choices base on last 10 years, not 100 years !

ETF Family Attributes: Vanguard

Why does it matter how complete a suite of offerings are available from one fund family for ETFs ? To me one of the many benefits of opening a brokerage acct vs just opening a regular mutual fund acct at Vanguard (or elsewhere) is so that you are not locked into one fund family's offerings. If you want to stick with just Vanguard, you can escape commissions and just invest directly @ vanguard.com into their funds. You do lose some other benefits of ETFs that way, but you gain some too. As a direct investor in a fund, you are serviced directly by that fund. If you have questions, you are somebody to them and get service. As an ETF customer you are anonymous to them, not even a customer as far as they know.

I personally would use Vanguard for buy and hold investing of core index type exposures (low expense in common indices), but anything you want to trade, other ETFs offer additional options
(sectors etc) or for indices more liquidity (better for day trading
where price rather than expense ratios are more important).

Articles focusing on the best of breed in each type of exposure would be a better way to present. Which S&P 500 ETF is best ?
Which commodity ETF ? Which Bond ETFs ?