aldford Wrote: ------------------------------------------------------- > So all we need to do is talk to our manager’s > marriage counselors and find out if divorce is > impending. If the answer is yes, we know they’re > not at the top of their game anymore and it’s time > to bail. I completely agree. It’s very difficult to concentrate with lawyers in you a$$.
I don’t know if this makes sense but I’ve thought that active management is really effective in circumstances where you have volatility in GDP. The GDP of North America has smoothed out considerably over the last 50 years no? Willy
> > ``We’ve determined that active managers add no > value over long periods of time,’’ Michael > Travaglini, director of the Massachusetts Pension > Reserve, said in an interview. > ARe they talking about pure long only active managers or active management in general?
joemontana Wrote: ------------------------------------------------------- > > > > ARe they talking about pure long only active > managers or active management in general? I think the decision focused on stock pickers (long only).
Let us get the facts right- Over twenty-year periods, in the US, there is not a single fund which has beaten the S&P 500 index fund in risk–adjusted performance evaluation. So if you are investing for retirement, it makes economic sense to allocate a significantly larger(or even 100%) of your equity allocation to index funds. However there is a drawback to investing in cap weighted index funds because these are basically momentum funds, overvalued stocks dominate the weightings, the tech sector pr during the boom had 32% weighting in the SP500, well above the historical levels of 15%. In essense you are overweighting over valued stocks and underweighting deep value plays. Research says that more than 95% of the wealth creation over the long-term is driven by asset allocation, hence paying attention to asset allocation makes more sense than spending time in cherry picking fund managers. Research also says that a simple 25% allocation each to stocks, bonds, commoidities and real estate will help you to accumulate wealth effectively with lower volatility.
Thank you Mr Bogle