This is spot on, most of these funds with their high management fees fail to beat the market more than 50% of the time. That's worse than a coin flip. One of my favorite activities in investing is to compare whatever fund is being offered against S&P 500 or (if it's a tech leaning opportunity) the NASDAQ. Funding fees are the great subtractor on top of that.
Talking about resilience, the US market has averaged 11.5% annual growth since inception.
I haven't checked out Bogle but I will (once I'm done with school, adding it to the growing list!).
Rob, the coin flip comparison is exactly right. And survivorship bias makes it even worse. When a fund underperforms badly enough, the company closes it or merges it into a better one and the bad record disappears. Only the winners survive long enough to show up in the data. The industry's track record looks better than it actually is because the losers aren't in the count. Bogle's books will reinforce everything you already know.
This is spot on, most of these funds with their high management fees fail to beat the market more than 50% of the time. That's worse than a coin flip. One of my favorite activities in investing is to compare whatever fund is being offered against S&P 500 or (if it's a tech leaning opportunity) the NASDAQ. Funding fees are the great subtractor on top of that.
Talking about resilience, the US market has averaged 11.5% annual growth since inception.
I haven't checked out Bogle but I will (once I'm done with school, adding it to the growing list!).
Rob, the coin flip comparison is exactly right. And survivorship bias makes it even worse. When a fund underperforms badly enough, the company closes it or merges it into a better one and the bad record disappears. Only the winners survive long enough to show up in the data. The industry's track record looks better than it actually is because the losers aren't in the count. Bogle's books will reinforce everything you already know.
Great insights!
Thank you Desmond, appreciate the feedback.