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It’s all fine to say that active funds can’t outperform index funds... but if it’s a bubble and it crashes, then people in active funds will be having a field d
by nabdab 7y ago
It’s all fine to say that active funds can’t outperform index funds... but if it’s a bubble and it crashes, then people in active funds will be having a field day while the people who bet it all on index funds will be left behind like the people who leveraged their 3 homes to buy 5 more during the “real estate always and consistently goes up” days of pre 2008.
The problem with bubbles is that everyone’s a winner and every indicator is confirming the everlasting increase.. on the way up.
- edmundsauto 7y agoThis would assume that active funds exit at the right point in the crash. What if they wait to the bottom to sell? What if they sell during a temporary dip, then the market rallies (pseudo-bubble that never happens?)
- markbnj 7y ago> It’s all fine to say that active funds can’t outperform index funds... but if it’s a bubble and it crashes, then people in active funds will be having a field day The CNBC article I linked claims that actively managed funds have been beaten by the S&P 500 for _nine straight years_. How long do the investors in actively managed funds have to wait for their big celebration?