Active vs. Passive Portfolio Management: Here Are The Facts

Active vs. Passive Portfolio Management: Here Are The Facts

[tdaveniii]

Is the sample size for mid and small cap funds sufficient? A 15 year period would seemingly exclude a lot of folks. [With that said, my porfolio, such as it is, is all in passive funds]

[akin]

8% of Large cap fund managers are far and few in-between too. They most likely have many wealthy investors in the front of the line bidding for their services.

For the middle class person, it is simply better to use an Index Mutual fund from Fidelity, Charles Schwab, or Vanguard for your retirement investing. ETFs with high dividends for taxable accounts due to their tax efficiency.

[tkjd]

Are fees associated with actively managed funds baked into those statistics? I think the primary reason why actively managed funds hardly ever beat the market over the long term is because the fees eat away at the gains. Those fund managers better read the tea leaves correctly to overcome such a big handicap.

[serjiang]

If everyone goes by empirical data and acts in the most rational way possible, there won’t be a casino or lottery industry. Just like gambler and lottery buyers, you will always have active traders, some will actually make money, most won’t. Index investors just sit back and grow their wealth slowly but steadily.

[jordanwillingham]

The problem comes whenever there is limited to NO active strategy in place of the passive managements of funds. The task of recognizing a regime change becomes 'impossible to know', and that 'no one saw it coming' comments from lazy passive management.

[mecheckraise]

Truth is most can't beat the market as a whole. They have no real training to do so. It is just stupid that companies pay them.

I am NOT claiming to be a genius but I have returned on average 54% per year for the last 3.5 years in my retirement account. I trade TECL which is a spectacular triple technology ETF long only. When I get stuck I just wait it out because I know it will hit new highs. I do buy and sell the ETF and have done very well in choppy markets. I made 46 points buying and selling as the volatile ETF moves with market headlines and the stock was essentially even over the period. I caught some of the stupid 300 point down days buying into it with it recovering within a couple days. The three day rule changing to two day rule has helped trading in a cash account. Now the zero commissions have almost eliminated the trading costs. This ETF is also a great buy and hold ETF.

I do think SPY, SPXL, and TECL all trade at a different levels of risk but at 8%, 14%, 32% the last year but that the technology has performed much better and will in the future. Another less risky strategy to love the market up or down is to buy SPY to make the market 8% but when the market tanks look at it as a great thing selling then buying SPXL or TECL. This way you make a boring market rate of return of 8% but make more on the ride back up to new highs. This strategy can increase returns to maybe 12% instead of the 8%. You win either way and always "beat the market" which others do not seem to be able to do.

[ronwhiteleo]

You forgot one segment: MICRO-CAP... I hear micro-cap funds are probably the only section worth using an active manager.. ????

[incrediblesimilarity]

@0:30 plus. "There are three kinds of lies, lies damn lies and statistics. <<-Benjamin Disraeli->>