Passive is Becoming MASSIVE

Do you prefer active or passive?

In the world of investing, this continues to be a HUGE debate.

Yesterday, Morningstar released its semi-annual analysis of actively managed funds (those that have higher internal expenses and attempt to beat a corresponding index or benchmark) compared to passively-managed peers (those that have low internal expenses and seek simply to mirror a corresponding index or benchmark), and the results were compelling: Only 23% of actively-managed funds exceeded the average of their passive “opponents” over a ten year period ending June, 2019. Does this confirm Jack Bogle’s quote?

In other words, every dollar you save by not paying the higher fee an active money manager charges is an additional dollar in your pocket.

Like much in life, we feel this active vs. passive decision should not be a binary one for our clients, and instead believe there are many shades of gray to this question. Expenses (along with income taxes) are a “necessary evil” when investing to build and protect net worth, and we aggressively seek to manage and minimize these for our clients.

However, expenses are only one of a myriad of considerations when analyzing what type of investments are most economically beneficial to a disciplined, informed, and purposeful portfolio. While we maintain a fairly strong bias (supported by an abundance of empirical evidence) towards recommending our clients own lower cost passive investments, we also believe there may be pockets in a portfolio where the costs of active management are justified.

Confused yet? It is a lot to wrap one’s head around. Call or email us to discuss your circumstances further, and/or click HERE to learn more about the investment philosophy and strategy at Towerpoint Wealth.

Towerpoint Wealth – Eating Well!

The TPW team is always diligently working to ensure the peace of mind and comprehensive financial well-being of each of our clients, and we also recognize how important it is for our family to have fun together. And more often than not, having fun means having food!

The team was recently treated to some light, crispy, and DELICIOUS homemade lumpia, made by our Client Service Specialist, Raquel Jackson and her mother, Susan York. Rumor has it that Raquel’s two-year-old daughter, Daijah, also helped with the lumpia-making.

And earlier this week, the crew enjoyed a sugary snack – one of the most divine creations ever to come out of the confectionery field, an original Boston Cream Pie, shipped directly from the historic Omni Parker House in Boston!

In addition to the good eating that was happening at Towerpoint Wealth’s headquarters, a number of trending and notable events occurred over the past two weeks:

• National Security adviser John Bolton ousted by President Trump
• NFL’s Antonio Brown saga continues, as the star wide receiver is accused of sexually assaulting a woman who had been his personal trainer
• Team USA loses to France in the 2019 FIBA Basketball World Cup quarterfinals, snapping a 58 international game winning streak
• After four months of treatment for pancreatic cancer, Alex Trebek is back hosting Jeopardy
• Oil tycoon, philanthropist, and renewable energy advocate T. Boone Pickens, dead at 91
• U.S. marks the 18th anniversary of the 9/11 terrorist attacks
• The third Democratic presidential debate was held at Texas Southern University in Houston, TX
• Auto workers strike against GM in contract dispute

Lastly, please take three or four minutes to review the curated content found below, highlighted by:

• Please RSVP and join us at The Vintage Monkey for our upcoming Wealth + Health – The Ultimate Wellness Prescription event, featuring Dr. Bill Lloyd, MD, FACS
• Our newly-published August, 2019 Monthly Market Lookback, Against the Wind
• An excellent commentary discussing upcoming changes to the Social Security system in 2020

As always, we encourage you to reach out to us (info@towerpointwealth.com) with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place. We are here for you, and look forward to connecting with, helping, and being a direct, fully independent, and objective expert financial resource for you.

– Joseph, Jonathan, and the entire Towerpoint Wealth team