Maybe I misunderstand the turnover numbers.  I thought it meant that a given stock was being sold and another bought.  That's being simplistic.  After reading your message I'm thinking it may be related to trading volume.

John Bogel pointed out that some daytraders were using ETFs.  There is some of this but I think he over emphasized it.  I have only index ETFs (24 to be precise at the moment) that there is little change initiated by the index that is usually only changed once a year.  Actively traded ETFs are another matter and depend upon the "gun slinger" manager of the portfolio. I do suspect some hedges are using ETFs such as someone wanting to long or short the S&P 500 and thus using SPY.  I do not know how Yahoo or MS counts but I suspect a lot of volaume may be coming from AP's adding or removing shares. 

Like Lowell I do not see turnover to be important like it is with a mutual fund, but do like to see sufficient voluem to help assure the market price and NAV remain fairly close.

Dan

Nancy,

I guess I'm missing something.  I'm buying a stock!  No matter what you call it or how you get there you're buying a company's stock.  The more people involved, the more slices of the pie there are.  The less control you have over your decisions.  Increased diversification may not translate into increased returns.

Bob

Increased diversification may not translate into increased returns.

However, there is a greater probability of increasing the Information Ratio.

I just posted a data table showing the latest updates for 19 portfolios.  Seventeen of the 19 are out-performing the VTSMX, and the two that are not are not as well diversified.

Lowell,

What is the time frame of the portfolios?  If it is like a college that has a 50 or 100 year time frame, then letting the market run, is a good idea. 

I'm not sure what a information ratio is, how it is computed or what its value is.

What is the time frame of the portfolios?  If it is like a college that has a 50 or 100 year time frame, then letting the market run, is a good idea. 

I'm not sure what a information ratio is, how it is computed or what its value is.

Statistics show that 50% of investors will perform below the mean.  However our brains are hard wired to believe we are above average and thus we think will be part of the group that beats the market.  I recently saw a study that 11% of daytraders had positive returns.  This means of course that 89% underperformed. However the lure of believing I am part of the 11% that can beat the market continues to lure investors (I suppose we should call them traders). I recently heard the CEO of TDAmeritrade indicate how well his business was doing in terms of trades and he mentioned that about half of the TDAmeritrade clients are daytraders. This surprised me although I have noted many of the tools they provide are designated to incur more frequent trading. It seems the higher unemployment rate has turned many of these people into daytraders trying to augment their income.

I think in reality most, especially those who are underperforming their benchmark do not really know how well they are performing versus their benchmark and in many cases do not have an appropriate benchmark to compare to their portfolio. 

My message is if you are one who is beating the market than continue to do what you are doing. But be sure you are accurately measuring your performance versus an appropriate benchmark.  If not you need to examine your approach.  With a market that tends to rise over the longer term just matching the market less fees with a well diversified portfolio of index ETFs is not too shabby.  I admit I still think I can select US stocks that will beat the market in most asset classes but I find this is not true when one must invest in international and emerging markets to capture the faster growth outside the US.

Dan