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Of course they have, that's the expected statistical outcome of thousands of funds. The problem is that 1) You were lucky in picking those, not prescient. 2)
by henrikschroder 12y ago
Of course they have, that's the expected statistical outcome of thousands of funds. The problem is that
1) You were lucky in picking those, not prescient.
2) Their winning streak is a result of luck, not competence.
Funds are a perfect example of survivorship bias in a zero-sum game. For someone to win at beating the index, someone else must lose, and losers are routinely eliminated. So when an investor presents funds for your choosing, you only get to see the lucky ones, a biased sample. Of course it looks like a great idea to invest in them!
- walshemj 12y agoYou do know that those funds have decades and some IT's cases century's of history behind them. The funds I mentioned have very good track records for 3 or 4 decades or more its just that they don't pay advisors fees or pander to tracking the "index" why do you think a number of very rich families have used active funds? If its good enough for Lord Rothschild its good enough for me.
- henrikschroder 12y agohttp://en.wikipedia.org/wiki/Survivorship_bias http://en.wikipedia.org/wiki/Survivorship_bias