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Massachusetts doesn't listen to Buffett or Dilbert
Posted by Fired Fred on February 6, 2008 5:07 PM
If I've blogged about firings that involved companies instead of people, I've forgotten them. People are funnier, anyway.
Governments and big companies can be funny too. Just look at Goldman Sachs, the latest money firm fired by Massachusetts for navigating state pension funds into less than profitable waters...
Travaglini alleged Goldman had been failing to meet the pension board's expectation to outperform the S&P 500 index. The board will now temporarily invest the money in a passive fund that tracks the index until it completes a review of its domestic equity allocation.I'm going to break with tradition here to pass along advice from a couple of the wisest philosophers of our time. Warren Buffett and Dilbert's human side, Scott Adams, both offer the same investment suggestions.
The Oracle of Omaha put it this way...
In response to a question about why Buffett recommends index funds to investors, he said that for "a know-nothing investor, a low-cost index fund will beat professionally managed money." He also said he had a standing offer to anyone who could name 10 hedge funds that will beat a low-cost index fund. No one has taken him up on his offer.As for the guy who wags Dogbert's tail, Scott Adams echoed that advice in his 9-Point Investment Plan...
Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirementSee, if Massachusetts spent more time listening to cartoonists and old billionaires, and less time over the past five months firing money managers and obsessing over the choke-job Patriots, they would have been ticking along nicely in an index fund, probably with a discount for being a big investor.
But what does a snarky blogger know? Well, this one knows how to get to Vanguard's web site and not dump money into funds with front-end loads and high expense ratios. That would make me the smartest kid in Boston.