Studies show that the stock and bond markets are "informationally efficient”, that is, an investor cannot consistently achieve risk-adjusted returns in excess of average market returns.

In fact, in a May 2010 report, Merrill Lynch noted only 17.5% of managers beat their benchmarks in the preceding 12 months, with average underperformance of 3.8%  

Last year, about 83% of mutual fund managers failed to beat the passive index they were measured against.

Large Cap Growth mutual funds charge an average of 1.3% per year, in addition to a 3-5% up front or back end sales charge. Passive indexes and ETFs charge below 0.5% on average, with no sales charge.

With these pointless fees, you're losing money every day. Who wouldn't just invest in the index?

Bell Advisors places clients in broadly diversified, efficient index funds. In the process, we save on lower management fees to the funds and we charge substantially less than other financial advisors.

Bell Advisors gives you market returns with half the fees.

Methodology

For portfolio construction, Bell Advisors uses index funds and exchange-trade funds (ETFs) with broad market diversification and low expenses. Our computer models rely on robust Markowitz techniques.

Essentially, the optimized portfolios are a composite of index funds across asset classes with the highest expected return for a given level of portfolio volatility.

In out-of-sample tests for portfolio efficiency, these portfolios score highly in CAPM statistical evaluations and Efficient Frontier reward/risk plots. 

Index funds are mutual funds that track market segments by investing in all of the components of the index. Tracking is achieved by holding all of the securities in the index, in the same proportions as the index. Other methods include statistical sampling of the market and holding representative securities. Most index funds rely on computer models with little to no human input in buy and sell decisions.

The advantage of index investing (also known as passive investing) is that this approach has significantly lower expenses than actively managed funds run by portfolio managers who pick individual stocks and bonds. Historically, most active managers have tended to trail the returns of index funds, once costs are factored in.