Rick Ferri, CFA

This is simple investing: I started working with a retired DIY client 4-years ago. He had $21 million. I recommended VTI, VXUS, a municipal bond fund, and TIPS. Today, he has $34 million. Honestly, why make it complicated?

@alphaarchitect Alternative ending: “Therefore, it is best to leave the stock-picking to Warren Buffett, and for the rest of us, who suffer from behavioral biases, we should buy a total market index fund and fuhgeddaboudit.”

@larryswedroe @MFintwit We are talking about publicly traded stocks and what a passive index fund of publicly traded stocks would look like. It would look like $VTI and $ITOT. You say, “Well, that’s only 99.9% passive indexing, the other 0.1% is active.” Fine, I’ll give you the 0.1%.

@larryswedroe Of course, total market index funds have to buy and sell stocks! Of course, the managers must invest new money, reinvest dividends, and a million other day-to-day chores. That's HOW they achieve the investment objective. The goal is a market return. Period. End of discussion.

It's NOT broken. The difference is very clear. If your intent is to track the total market, you're investing passively. If your intent is to do anything else, you're investing actively. "A truly passive portfolio would be one that tracks a total market index. Even a portfolio that holds a large-cap growth index fund to capture exposure to U.S. equities would be an active portfolio relative to the U.S. total market.” https://t.co/JTpyFHrLHb

There’s belief among advisers that adding asset classes with low correlation increases return without adding risk. That portfolio benefit is extremely difficult to forecast and can be costly to implement. It’s best not expect a benefit. Great if it happens, but don’t count on it!

The Rolling Stones on investing: "You can't always get what you want But if you try sometime, you'll find You get what you need." We want to outperform, but it's very hard. So, when investing in stocks, at least earn a market return. We do that with total market index funds. https://t.co/HEgj1auf6i

@MaciejWasek @jf10977 @Muhatcapital @larryswedroe @safimona3 @diyreturns I’ve never considered EMH as a reason to buy a total stock market index fund. The reason I recommend TMF is performance. Few active managers beat it (those that do not by much, not for long) and consistently picking winners ex-ante is almost impossible.

The value of an adviser's advice lies in wealth planning, taxes, insurance, etc., and in recommending simple portfolios of a few good total market index funds and perhaps individual Treasury bonds/TIPS, then promoting discipline to follow that simple investment philosophy. The FEE for these services should be based on the TIME to do the first part and the portfolio construction, and if a client wants ongoing management, a low AUM fee (0.25% or <) or an annual flat fee.

Larry, I've followed you for 25 years, read most of your books, and am well aware of the forever-changing "Larry Portfolio". I've also been an adviser for four decades and am well aware of the value of advisers, and it isn't from trying to guess the perfect portfolio mix. Advisers should be recommending simples portfolio with a few good total market index funds and perhaps some individual Treasury bonds, not complex hocus-pocus portfolios designed to provide advisers with evergreen fees and job security.