PDF | Index Funds Advisors, Inc. (www.ifa.com) is a fee-only Independent Financial Advisor, registered with the United States Securities and Exchange Commission. IFA incorporated on March 5, 1999. Under U.S. law, investment advisors owe their clients an ongoing fiduciary dutyto provide full and complete disclosure of all fees, conflicts of interest, and to exercise discretion in selecting investments with only their clients’ best interests in mind.Index Funds Advisors (IFA) is a fee-only independent financial advisor that provides wealth management by utilizing risk-appropriate, returns-optimized, globally diversified and tax-managed portfolios of index funds. IFA founder, Mark Hebner and the team at IFA have done extensive research as shown on this web site and the highly ranked book titled Index Funds. This research leads our clients to the optimal money management strategy, net of our advisory feesand taxes. IFA completely avoids the futile, speculative, and unnecessary cost-generating activities of stock, time, manager, and stylepicking. Instead, our investment strategy employs a disciplined, quantitative approach, emphasizing broad diversification and consistent exposure to the structural trends of publicly traded markets around the world, with an overweighting of small and value priced companies. In short, we invest in capitalism.The IFA advice is based on the highly respected research indexes designed by Eugene Fama and Kenneth French and documented in their empirical and peer-reviewed publications. The two professors rank high on total downloads per paper among 34.5 million downloads on the Social Sciences Research Network. Our current and independent advice incorporates 83 years of IFA Indexes and iPortfolio risk and return data, third generation index fund designs and 28 years of refined passive trading techniques employed by Dimensional Fund Advisors (DFA.) IFA does not accept payments from DFA or from any other recommended investments. IFA has a fiduciary duty to our clients and is exclusively paid by those clients for ongoing advice on the optimal wealth management of their assets. We can assist clients in establishing and evaluating relationships with estate planning attorneys, independent insurance advisors, and accountants.
IFA plays several roles in the process of providing investment advice. They may be summarized with these seven roles:
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| IFA adds value through matching people with portfolios by carefully qualifying and quantifying 5 dimensions of an investor’s Risk Capacityand matching it to 5 dimensions of a portfolio’s Risk Exposure. This process produces investor-specific optimal returns by applying the IFA proprietary concept of 10dRisk™. IFA obtains academically identified capital market rates of returns for its clients from about 17,000 public companies in the U.S. and about 40 other countries around the world. IFA then designs highly tax-managed and low cost trading strategies, maintains ongoing proper risk exposures through rebalancing, manages cash inflows and outflows, and provides online monthly and inception to date detailed measurements of client performance relative to the IFA Indexes and other traditional benchmarks. This ongoing reporting on performance, gains, income and tax reporting is exclusively available at IFA and adds significant value since measurement is essential to improvement. This process positions our clients for an investment experience that optimizes the trade off between risk and return, based on 81 years of historical index data.The IFA Investment Principles: 1. Capitalism works on average and over time. This statement might be explained by Hebner’s estimate that more than 100,000 public companies over 80 years have earned an average annual profit about 10%/year. If companies or stockholders of those companies desired capital, they traded their stock certificates for cash from investors. Through this trade, stockholders gave up the stock’s future return of about 10% per year (currently 9.26%). That return has been driven up over the last 80 years and 10 months by the average profits of thosesimulated and actual S&P 500 companies. This is known as the “cost of capital” and the cost of capital is paid to the investors. 2. Risk and return have a positive correlation. 3. Free markets match prices to current levels of uncertainty, so that buyers can earn a risk-appropriate return. 4. The greater the risk, the longer the time required to obtain the expected return. Investors should capture the average return of all stocks and the average return of a sufficient number of months. 5. Passively invest, diversify to the maximum, maintain a small and value tilt and keep turnover, costs and taxes to a minimum. 6. Risk exposure must be initially matched to the investor’s risk capacity, then monitored and maintained through rebalancing. 7. Avoid capital gains and dividends and realize losses in taxable accounts. IFA manages individual and institutional accounts, including IRA, 401k, 403b, profit sharing, pensions, endowments and all other investment accounts. We also facilitate IRA rollovers from 401ks and 403bs. IFA provides investment advice to individuals, trusts, corporations, non-profits, and public and private institutions. For institutional accounts, please see our social responsible investment advice for Catholics. |
