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That's my reasoning.
by cheerlessbog 7y ago
That's my reasoning.
- anonymousDan 7y agoBut how to know when that equilibrium is reached? Even retrospectively how might someone spot temporary glitches where things have gone too far from looking at market prices?
- Scoundreller 7y agoWe really don’t. But what we do know is that passive index investors save 0.5%-2% per year of returns by being passive, and that makes up for a lot.
- gubbrora 7y agoYou can save that same amount by buying stock yourself (subject to availability in your account, I guess some retirement accounts offer only funds)
- Scoundreller 7y agoCould, but it’s a record keeping nightmare. And buy/sell commissions/friction. I’ll keep paying $1/3k p.a. to VTI in management fees.
- marcosdumay 7y agoIf you think the market is crazy because of mindless investing, you go and put your money on the clear winners. That's how equilibrium is reached. We don't get to know if you are a genius or an idiot, not even after the fact.
- cheerlessbog 7y agoActively managed funds' management fees will begin to rise?