The latest S&P Index Versus Active report was released today. Every six months, S&P releases this report to compare the performance of actively managed funds to their benchmarks. Each time it comes out, the conclusion is the same. Most actively managed funds underperform their benchmarks over long time periods.
This is no longer a surprise. People have been selling their high priced actively managed funds for years and replacing them with index funds. That’s a good start. Now how do we get the word out to everyone who is picking stocks themselves?
We just concluded that professional money managers who invest as their full-time job cannot consistently outperform an index. What makes you think you can do it in your spare time? Maybe you had some luck buying Moderna early last year or you’ve ridden Tesla to big gains. If that’s you, stop while you’re ahead. The odds are not in your favor.
About the Author: John O’Connor
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