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Resuming, as I understand it: Good stock pickers > Index Funds (blind money) > Bad stock pickers By investing on index funds you are betting in the average of
by galfarragem 10y ago
Resuming, as I understand it:
Good stock pickers > Index Funds (blind money) > Bad stock pickers
By investing on index funds you are betting in the average of the average (a fund is already an average of undervaluated and overvaluated stocks).
However, by investing on managed funds your probability of having profits over index funds is low: even if stock pickers that beat the market (by definition) amount to 50%, extra fees make most of them still less profitable to investors than passive funds.
[edited]
- VMG 10y ago> Why not invest on a good stock picker? You can only tell them after the fact
- galfarragem 10y agoSure, but I still prefer to bet on Buffett than on a managed fund that is consistently beated by the market. [edited]
- spcelzrd 10y agoBuffett would take the other side of that bet. http://longbets.org/362/ http://longbets.org/362/
- GFischer 10y agoPretty close to finishing. Is Buffett still winning?
- icebraining 10y agoHe made a recap last year, was winning by quite a bit: https://www.yahoo.com/news/buffett-most-mportant-investment-lesson-211351601.html?ref=gs https://www.yahoo.com/news/buffett-most-mportant-investment-...
- GFischer 10y agoThank you :) . Makes the people investing in Vanguard happier then.