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Not really, indexing beats hedge fund managers over something like a 12 year stretch.
by beacon294 2y ago
Not really, indexing beats hedge fund managers over something like a 12 year stretch.
- herval 2y agohedge funds are not the same thing as picking individual stocks. Not even close. Index funds are an averaging mechanism to reduce risk, not to maximize return (you can easily beat the average by allocating on the p75 instead for instance)
- beacon294 2y agoThe problem isn't allocating, it's reallocating correctly. That problem space is much more complex for an entrenched account.
- herval 2y agoFair, etfs do help with that
- jhghikvhu 2y agoI'd be interested in something a little (but not a lot) higher risk reward than index, so I'd appreciate if you expand on this. What is the p75?
- herval 2y agoBalancing your portfolio to include the top 25 or so best performing companies of the index Therefore ETFs that track that - eg $XLG is the s&p top 50. Unsurprisingly, consistently beats the s&p500. Same for $QQQ - in this case the skew is for more tech stocks (which were the best asset class in a decade)