Sometimes the Magic Can Just Fade Away
Do you believe in magic?
Lots of investors do. I keep hearing that certain investment strategies are sure-fire winners and that certain investment axioms are etched in stone. But in reality, the only certainty seems to be the muddled thinking of the folks involved.
Here's a sampling of some of the magic that investors believe in.
1. You can't go wrong with the American Funds.
I am, in truth, fairly impressed by the American Funds, which are run by Capital Research & Management in Los Angeles. It seems like an intelligently run fund family with reasonable expenses, low turnover and a clever fund-management style that involves divvying up a fund's assets among multiple money managers.
Still, all the hoopla surrounding the American Funds makes me leery. During my two decades covering the fund business, I have heard plenty of mutual funds touted as a slam-dunk way to earn market-beating returns. But invariably, these celebrated funds fall by the wayside.
One reason: Performance-hungry investors throw money at such funds, causing them to become bloated and unwieldy. Eventually, even if a fund's managers are truly talented, it becomes all but impossible to sustain the earlier record.
A spokesman for the American Funds responds that the firm's stock funds continue to look distinctly different from the market averages, which suggests the funds aren't having any problem finding investment ideas. Nonetheless, he cautions that the funds are meant to be long-term investments, and shareholders shouldn't expect to beat the market every year.
2. Home improvements are a great investment.
You wouldn't buy a new set of clothes, wear them for a few years and then assume you can sell them for more than you paid. Yet many homeowners think they can do just that when they sink thousands of dollars into remodeling the kitchen or replacing the siding.
For a reality check, consider the annual survey by Remodeling magazine. Its 2005 survey estimates that, if you make a home improvement and then sell your home a year later, you might recoup a little less than 87% of the money spent.
3. Stick with five-star funds.
As anybody who has ever bought a stock fund can attest, past performance is a lousy guide to future results. That should immediately make you suspicious of Morningstar's fund-rating system, which awards funds as many as five stars -- and bases that award partly on past performance.
To be sure, the system wisely compares each fund's performance to others in the same category and it factors in risk and fund sales commissions. Still, as the Chicago investment research firm says on its Web site, the stars are "a useful tool for identifying funds worthy of further research, but shouldn't be considered buy or sell signals." Many investors, unfortunately, don't seem to have gotten that message.
4. Value stocks win in the long run.
I have some sympathy with this notion. Historically, you could have notched superior long-run returns by buying stocks that appear cheap based on market yardsticks like price-to-book-value and price-to-earnings. But history isn't destiny. Thanks to a heap of favorable publicity, many investors have piled into value stocks, pushing up share prices and possibly eliminating much or all of the performance advantage.
More important, you have to wonder about timing. Value stocks have delivered market-beating returns for almost seven years -- and suddenly everybody's lauding the virtues of value investing. Did anybody say "performance chasing"?
5. The smart money is in ETFs.
An exchange-traded index fund, or ETF, simply aims to track the performance of an underlying index. Yet folks talk about ETFs as though they are some sort of earth-shattering innovation.
Yes, because ETFs are listed on the stock market, you can trade them throughout the day -- which isn't the case with regular index mutual funds. Yes, ETFs may turn out to be more tax-efficient than regular index funds. Yes, in some cases, they have lower annual expenses.
But if there is an advantage to owning ETFs, it isn't huge. And, oftentimes, any advantage is more than offset by the trading costs you incur when buying and selling these funds. Indeed, for people who are regularly adding to or drawing down a portfolio, no-load index mutual funds are a far smarter investment.
6. Stocks earn 10% a year.
Over the past 80 years, large-company U.S. stocks have clocked 10.4% a year, calculates Morningstar's Ibbotson Associates. Stock investors realize they won't get this return every year. But many expect to collect 10% a year over the long run.
I wouldn't be so sure. Two of the key components of that 10.4% return were hefty dividends and rising price-earnings multiples. Dividends contributed 4.2 percentage points a year to the market's historical return, but today stocks yield less than 2%.
Meanwhile, over the past 80 years, stocks have climbed from 10 to 17 times earnings, boosting returns by some 0.7 percentage point a year. The market's earnings multiple can't climb from 10 to 17 again -- unless, of course, we get a huge crash first. The bottom line: Even in the long run, 10% a year isn't guaranteed, especially given today's lofty valuations.
7. Rental real estate is the safe way to go.
Burned by the 2000-2002 stock-market collapse, many investors started pouring their spare cash into rental properties, figuring it was a less risky way to make money.
Becoming a landlord can indeed be a good way to build wealth. But don't kid yourself: It isn't low risk. You may not be able to look up your rental property's value every day, the way you can look up the price of a stock. But that doesn't mean your property isn't fluctuating in value.
Moreover, if you're a landlord, you have a big chunk of your money riding on a single piece of real estate and any price decline could be devastating if there's leverage involved. Say you bought a rental property with 20% down. All it takes is a 20% price decline to wipe out your home equity.
And price swings aren't your only worry. What if your tenants stiff you on the rent? What about maintenance and repairs? What about the aggravation involved in buying and selling the property, as well as the hassle of reporting everything to the taxman?
Owning a handful of no-load mutual funds strikes me as a whole less stressful.
投资没有万灵魔法
你相信魔法吗？
有许多投资者相信。我不断听到有人说，某某投资策略万无一失；某某投资信条无往不胜。但在现实世界里，唯一可以确定的似乎只有一点：这些人是在想入非非。
以下是我从投资者坚信不疑的魔法里挑出的一个例子：
1. 买American Funds准没错
说实话，我对American Funds印象非常深刻，这是洛杉矶Capital Research & Management管理的系列基金。这些基金看上去管理的很不错，它们收费合理、退出比例低，而且采用了一种很巧妙的管理方式：将基金资产分配给多位理财经理管理。
不过，围绕American Funds的这些热闹让我很谨慎。在我二十年关注基金市场的经历里，我曾听到大量共同基金被奉为能确保回报跑赢大盘的高手。但无一例外地是，这些名声赫赫的基金最后全都难以为继。
其中的一个原因是：追求基金业绩的投资者将大量资金扔向这些基金，使它们变得机构臃肿、动作迟缓。最后，即使基金的经理人的确很有才能，要保持以前的辉煌业绩几乎是不可能的事。
American Funds的一位发言人说，他们的股票类基金的收益情况仍与市场平均水平不可同日而语。听起来，这家基金公司在寻找投资思路方面没有任何问题。不过他又提醒说，他们的理念是进行长期投资，股东不应指望他们每年都能超过大盘。
2. 住宅装修是不错的投资
你应该从没想过买一套新衣服、穿上几年，然后还想着以高于你当初购买时的价格卖掉它。可是，许多人在投入数千美元改造厨房或更换壁板的时候还真是这么想的。
要想了解真实情况，来看看家装杂志Remodeling的年度调查结果吧。2005年的调查估计，如果你对房屋进行装修，一年后将房子卖掉，你装修花的钱从买主那里只能拿回不到87%。
3. 坚持投资五星级基金
任何曾买过股票基金的人都能证实，过去的投资表现完全不能说明将来的业绩能怎样。这一点应该让你立刻对晨星公司的基金评级系统产生怀疑。该系统根据基金过去的业绩对它们进行评级，最高为五星级。
当然，该系统对比了同一类别各只基金的不同表现，还考虑了风险及基金销售佣金等因素，这都是很有意义的做法。不过，就向晨星公司在自己的网站上所说的，“星级评等在识别值得进一步研究的基金方面是一个有效的工具，但评级不应被视为指导你买进或卖出基金的参考因素”。但不幸的是，许多投资者似乎并未理解这一点。
4. 价值型股票长期而言定能获利
我并不完全否定这种观念。一直以来，买进那些用市盈率或股价/帐面值比率等指标来衡量相对便宜的股票或许都能获得相当不错的收益水平。但历史并非一成不变。由于市场上有大量信息可供参考，投资者可以买到许多价值型股票，推高了它们的价格，因而可能让它们的很大一部分乃至全部估价优势不复存在。
更重要的是，你必须考虑时机问题。价值型股票回报率超出大盘已有7年之久，这时，突然间每个人都在为价值投资的好处鼓掌喝彩。可有人提醒大家要追求“估价表现”？
5. 买ETF是明智之选
ETF（在交易所交易的指数基金）是指跟踪某一基本指数的表现进行投资。现在，大家谈起ETF的时候好像它是个很有点惊天动地的大发明。
ETF的确有其特别之处。由于它在股市上市，因此可以进行全天交易，这一点一般的指数类共同基金是做不到的。而且，对投资者而言，ETF在税收方面比普通指数基金更有利。而且，有些时候ETF的年费更低。
但持有ETF即使有某些（收益上的）优势也不是很大。而且，这些优势常常还抵不上买卖ETF的成本。对那些经常调整投资组合的投资者而言，无佣金指数类共同基金要划算得多。
6. 投资股票每年能赚到10%收益
据晨星公司(Morningstar)旗下Ibbotson Associates的统计，过去80年来，美国大公司股票平均每年的回报率是10.4%。股票投资者知道他们不是每年都能得到这么高的收益，但许多人认为，长期而言，10%还是可以期待的。
不过，我觉得没这么大把握。这个10.4%里面包含两个关键要素：很高的派息和不断上升的市盈率。股市的历史回报率中有4.2个百分点来自派息，但今年的股息收益率还不到2%。
与此同时，过去80年来，市盈率从10倍升到了17倍，股票收益每年因此上升大约0.7%。而这种从10到17的上升不会再出现了，除非股市先大跌一次。长期而言，10%的收益率是没什么把握的，考虑到目前已经很高的市盈率就更是如此了。
7. 房地产出租能稳赚
许多对2000-2002年的股市崩盘仍心有余悸的投资者开始将闲置资金投向用于出租的房地产。他们认为这种投资没那么大风险。
成为一名“地主”的确是个不错的积累财富的途径。但别糊弄自己，它可不是什么低风险的美差。你可能无法每天像查看股价一样查看房子的最新价值。但这并不意味着房地产价值就没有波动。
而且，如果投资房产然后出租，你就会有一大笔钱被拴在单一的一套房产上，如果这笔投资涉及债务，那么房价一旦下跌，对你将会是毁灭性的打击。
假设你用20%的首付购买了一套房产。房价只消下跌20%，你的房屋净值顷刻间就会灰飞烟灭，一文不剩。
而且，房价波动还不是你要担心的唯一一个问题。如果租户拖欠租金你怎么办？需要维护和修理怎么处理？买、卖房子的过程就会让你大伤脑筋，此外，你还要不厌其烦地向税务官报告你在出租房产上进出的每一分钱。
所以在我看来，买几只无佣金的共同基金好像是最省心的选择。
Jonathan Clements
