FinancialEdge.net

According to the St. Petersburg Times, The State of Florida pension fund is under fire by the St. Petersburg Times. According to the article and public documents, the fund is invested about 50 percent in passive index strategies and 50 percent in active strategies including hedge funds, venture capital, real estate and special investments.

The passive index portion has done fine.  Because of poor performance and high fees the active strategies did not perform as well.

The State of Florida pension fund gained 22% for the year ending June 30, 2011.  A simple Core-4 portfolio of Vanguard index funds with the same stock/bond allocations performed 25% during the same period.

read more: http://www.tampabay.com/news/politics/article1183442.ece

8/8/11.  Bank of America (BAC) is down 17% today to $6.80.  Morgan Stanley (MS) plunged 14%, to 17.12.  S&P’s 8/5/11 downgrade on the U.S. sovereign credit rating could have a “material adverse” impact on financial markets.  OfficeMax (OMX) plunged 22%, to 5.43.

8/3/11.  Shares of Dendreon fell 62% to $13.66 in after-hours trading Wednesday on the Nasdaq Stock.  wsj.com”>more

8/1/11.  Skilled Healthcare Group Inc (SKH). had plunged 43% in today’s trading to $5.06 as nursing-home companies generally declined.

“It’s tough to make predictions especially about the future.” — Yogi Berra

Passive Investments in an index ETFs such as SPY can provide the investor with superior performance.

Below is a chart comparing the SPY to the Magellan fund and four stocks of major U.S. companies – - Citicorp, Cisco, Hewlett-Packard and Microsoft for the 1, 2, 3, 4, 5, and 10 year periods through June 30, 2011.  Note that the fund and the stocks had underperformed the indexes for all periods with the exception of Hewlett-Packard for the 5 and 10 year periods and Microsoft for the 4 and 5 year periods.

The Magellan fund was chose because of their strong performance under Peter Lynch.

The performance were computing from the adjusted ending values obtained from finance.yahoo.com without dividends.

.

Take-Away
* Investments in ETFs can provide you with superior investment results.