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Aren't fund managers on average slightly less successful than the index? Throwing darts at a board or using a capuchin monkey to decide (random allocation) is
by daniel-s 6y ago
Aren't fund managers on average slightly less successful than the index? Throwing darts at a board or using a capuchin monkey to decide (random allocation) is a better strategy than investing in a managed fund.
Not a joke, an actual observable/measurable fact. [1]
[1] https://www.cnbc.com/2019/03/15/active-fund-managers-trail-the-sp-500-for-the-ninth-year-in-a-row-in-triumph-for-indexing.html https://www.cnbc.com/2019/03/15/active-fund-managers-trail-t...
- NoOneNew 6y agoJust to clarify a bit. This is about long, passive holds compared to active trading. On average, you're better off staying long by diversifying on 500 large, successful companies, compared to picking choosing random companies on short term flips. Investing in the S&P is about as strategic and complicated as betting who is going to win in a fight: Connor McGreggor or a semi-truck carrying 50,000 pounds of lumber going 70mph. The S&P is and index of the largest 500 companies out there. Either they are doing well/better or the entire economy is going straight to shit... because, in essence, they are the economy. This article technically argues against throwing darts on a board because active managers act as the dart throwers.
- wcoenen 6y agoI agree, but such observations weren't part of the linked study so it has no business making claims about it. They simply compared a few deterministic strategies with a random strategy.